Phoenix New Times:  “So why grow pot indoors, particularly legal pot? Why not stick it in a field and rely on the strong Arizona sun? Arizona’s medical marijuana law and local ordinances stress the importance of security and discretion, making indoor growing an easy sell to regulators worried about public perception. But there’s another option: the greenhouse, a cross between indoor and outdoor growing that relies in large part on the sun. The energy savings associated with growing cannabis in greenhouses are undeniable,”

This article discusses the major provisions contained in Arizona’s Proposition 205 also known as the “Regulation and Taxation of Marijuana Act.”   Proposition 205 will be on Arizona’s November 8, 2016, ballot.  If the Arizona voters approve Proposition 205 Arizona law will be be changed as follows:

• Arizona Department of Marijuana Licenses and Control (the “Department”) will be created to oversee the legalization of marijuana in Arizona.  The Department will adopt and enforce rules that govern marijuana retailers sale of marijuana.

• A Marijuana Commission will be created to oversee the Department.  It will have seven members appointed by the Governor of Arizona.  Not more than four members can be from the same party.  Commissions are appointed for a term of three years.

• Marijuana establishments will be created.  A marijuana establishment is an entity that is a marijuana cultivator, marijuana distributor, marijuana testing facility, marijuana product manufacturer or marijuana retailer.

• Marijuana cultivator is an entity that is licensed by the new Department that may produce, process, transport and package marijuana, to have marijuana tested by a marijuana testing facility and to sell marijuana to other marijuana establishments, but not to consumers.

• Marijuana distributor is an entity that is licensed by the Department that may store marijuana and marijuana products at a location that is not licensed for the production, manufacture or retail sale of marijuana and marijuana products and to transport marijuana and marijuana products from a marijuana establishment to another marijuana establishment, but not to a consumer.

• Marijuana establishment is any entity that is a marijuana cultivator, marijuana distributor, marijuana testing facility, marijuana product manufacturer or marijuana retailer.

• Marijuana product manufacturer is an entity that is licensed by the Department to purchase, manufacture, process, transport and package marijuana and marijuana products and to sell marijuana and marijuana products to other marijuana establishments, but not to consumers.

• Marijuana retailer is an entity that is licensed by the Department to purchase marijuana and marijuana products from marijuana establishments, to transport marijuana and marijuana products to or from marijuana establishments and to package and sell marijuana and marijuana products to marijuana establishments and to consumers.

• Reorganized marijuana business is an entity that is established to operate a marijuana establishment by the unanimous consent of all of the principal officers of a nonprofit medical marijuana dispensary that is registered and in good standing pursuant to Chapter 28.1 of this Title.  This is a dispensary licensed before the adoption of Proposition 205 that votes to open a marijuana establishment.

• The Department shall begin accepting and processing applications for up to one of each type of marijuana establishment from each reorganized marijuana business on or before September 1, 2017.  The Department shall accept an application for up to one of each type of marijuana establishment for each dispensary registration certificate held by such nonprofit medical marijuana dispensary.  The Department shall begin accepting and processing applications for marijuana establishments from all other applicants on and after December 1, 2017.

• Limit on the Number of Marijuana Retailer Licenses.  On or before December 1, 2017, the Department shall issue licenses to each qualified reorganized marijuana business.  Until September 1, 2021, the department may not issue more marijuana retailer licenses than ten percent of the total number of series 9 liquor licenses issued by the Arizona Department of Liquor Licenses and Control. On and after September 1, 2021, the Department may issue additional marijuana retailer licenses if the Department determines that additional licenses are desirable to minimize the illegal market for marijuana in Arizona to efficiently meet the demand for marijuana or to provide for reasonable access to marijuana retailers in rural areas.

• Beginning September 1, 2017, the Department of Health Services will cease to oversee and be involved with marijuana related matters in Arizona and all of its previous powers will be exercised by the Department.

• The Department can adopt procedures that would allow for the transfer of a license held by a marijuana establishment.

• Marijuana cultivators will be strictly regulated.  There will be three levels of licenses issued to marijuana cultivators.  A reorganized marijuana business will automatically be issued the highest level cultivator’s license if it is eligible and applies for the license.

• The Department may not issue or renew a license for marijuana establishment if a controlling person of the proposed marijuana establishment has been convicted of a felony or convicted of an offense in another state that would be a felony in this state within five years before application.

• The new law would add a lot of new fees, including: (i) $5,000 to apply for a marijuana establishment license, (ii) $20,000 and $6,600 for initial license and renewal license for a marijuana retailer, (iii) $15,000 and $5,000 for initial license and renewal license for a marijuana product manufacturer and marijuana distributor, and (iv) $10,000 and $3,300 for initial license and renewal license for a marijuana testing facility.

• The Department shall establish a tiered schedule of annual licensing fees for marijuana cultivators with fee amounts relative to the size of the licensed cultivation area. The Department may require payment of an annual licensing fee of not more than $30,000 for the initial issuance of a license for a marijuana cultivator or $10,000 for a renewal license for a marijuana cultivator.

• All marijuana establishment licenses expire one year after the date the license was issued.

• Sales of marijuana to consumers begins March 1, 2018.

• Consumers 21 years of age and older may possess and use not more than one ounce of marijuana and six marijuana plants.

• It is the public policy of Arizona that contracts related to the operation of marijuana establishments are enforceable, and a contract entered into by a licensee or its agent may not be deemed unenforceable on the basis that any action or conduct allowed pursuant to the license rs prohibited by federal law.

• Sellers of marijuana must pay Arizona a sales tax of 15% of the sale price.

Arizona Daily Star:  “A bid to let adults buy and use marijuana for recreation has enough signatures to qualify for the ballot. But, in the end, that may not be enough. Matt Roberts, spokesman for the Secretary of State’s Office, said Wednesday that the petitions verified so far show there will be at least the legally required 150,642 valid signatures to give voters the last word. Roberts said he won’t have a final count until Thursday, as his office is waiting for the results of signature review by Coconino County. But he said what officials there ultimately provide won’t make a difference: There are enough signatures from the other 14 counties to put the measure over the top.”

Reuters:  “The U.S. Drug Enforcement Administration on Thursday denied requests to stop classifying marijuana as a dangerous drug with no medical use, leaving users and businesses in limbo after many states have legalized it for medical or recreational purposes.  The DEA though did relax certain restrictions on growing marijuana for research purposes.  For decades, marijuana has been listed as a “Schedule I” drug, placing it on par with heroin. The government has repeatedly rejected appeals for reclassification.”

New York Times:  “As state after state has legalized marijuana in one way or another, big names in corporate America have stayed away entirely. Marijuana, after all, is still illegal, according to the federal government.  But Microsoft is breaking the corporate taboo on pot this week by announcing a partnership to begin offering software that tracks marijuana plants from “seed to sale,” as the pot industry puts it.  The software — a new product in Microsoft’s cloud computing business — is meant to help states that have legalized the medical or recreational use of marijuana keep tabs on sales and commerce, ensuring that they remain in the daylight of legality.

Tucson.com:  “Unable to qualify for the ballot this year, organizers of one of the initiatives to legalize recreational use of marijuana in Arizona are now trying to defeat the remaining measure. Arizonans for Mindful Regulation has quietly shelved its plans to put its proposal on the November ballot. . . . Medar and his allies are forming a political committee to try to persuade voters to reject the other initiative.”

CBS News:  “Fifty-six percent of Americans say the use of marijuana should be legal – a new high, and a slight increase from a year ago. Now just 36 percent think it should not be legal, down seven points from last year.”

The director of the Arizona Department of Health Services posted the following on her blog on April 27, 2016:

“Last week the Arizona Medical Marijuana Program turned five. Voters passed Proposition 203 in the fall of 2010, making Arizona the fourteenth state to legalize medical marijuana. Within 120 days of Proposition 203 passing, we developed the Medical Marijuana Program and issued the first medical marijuana card to a qualifying patient on April 14, 2011. As of today, there are 94,461 qualifying patients, 2,544 dispensary agents, and 834 designated caregivers licensed.

There are 99 licensed medical marijuana dispensaries, with 92 currently open and operating. Approximately 97 percent of Arizonans are now residing within 25 miles of an operating medical marijuana dispensary. There are 75 cultivation sites located outside of the operating dispensaries. Some of those dispensaries and cultivation sites include kitchens approved to prepare edible food products.

Later this summer we plan on accepting new applications for medical marijuana dispensaries . The exact number is not known at this time, but there will likely be about 30 licenses available. The application packet is currently posted on our website and more information will be posted on our website as it becomes available. So if you’re interested in opening up a dispensary in Arizona, stay tuned for updated information!”

Eastern Arizona Courier:  “Arizonans may have the choice to join other states in legalizing marijuana for recreational use. The backers of the Campaign to Regulate Marijuana Like Alcohol announced Tuesday it collected more than 200,000 signatures in support of an initiative to end marijuana prohibition in Arizona. The campaign is required to have 150,642 valid signatures of registered Arizona voters to make the November ballot.”