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DHS Regulations

Richard Keyt’s Suggested Changes to the DHS Rules

What follows is the text of the suggested changes to the Arizona Department of Health Services’ December 17, 2010, rules that I posted in the comment area on the DHS website today.  Tomorrow, January 7, 2011, is the last day to submit online comments.

1.  Eliminate the requirement for a medical director.  This greatly increases operational costs that will be passed on to the patients.  It’s not in Prop 203 and is unreasonable.  Is there any other retail business in Arizona that must have a medical director?  Do you know if a doctor’s malpractice insurance would cover services to the dispensary?  The doctor may not be covered by malpractice insurance because the insurance company may say that being a medical director for a marijuana dispensary involves an industry that violates federal law and/or does not involve the practice of medicine.

2.  If you retain the medical director, allow licensed pharmacists to be a medical director.

3.  Do not require dispensaries to get a certificate of occupancy.  Many cities (Mesa for example) do not provide a CO,.  It was only a few years ago the Phoenix started issuing them.

4.  Do not require Arizona residency.  It’s not in Prop 203 and is unreasonable.  I don’t believe there is any other type of business in Arizona that must be owned by an Arizona resident.

5.  Give dispensaries guidance on what criteria you will use to select licensees.

6.  Create a preliminary approval so dispensaries can determine they will be able to get a license before spending a large amount of money without any assurance they will actually get a license.  Dispensaries could then build tenant improvements, purchase equipment and hire personnel knowing that they have a good chance of getting the license.  Applicants that are rejected and that do not get preliminary approval, will be spared wasting their money.

7.  Ease up on the requirements for a patient to get a recommendation from a doctor.  As one local doctor wrote recently, doctors can see a patient once and prescribe any number of drugs that are potentially much more harmful than marijuana.

8.  Eliminate or greatly reduce the requirement that a dispensary grow at least 70% of the marijuana it sells.  This growing requirements causes dispensaries to fund and operate a retail business and a farm, both of which are time-consuming and expensive.  Let dispensaries that want to grow more than they sell do so.  It would reduce the capital required by other dispensaries.

By |2011-01-18T19:15:42-07:00January 6th, 2011|DHS Rules, Stories & Articles|Comments Off on Richard Keyt’s Suggested Changes to the DHS Rules
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Arizona Medical Marijuana: Public Comments to be Weighed when Redrafting Rules

Arizona Republic:  “More than 1,000 people have commented on the proposed medical-marijuana rules so far, responding most heavily to a handful of areas that include the definition of doctor-patient relationships and medical directors and limitations on where dispensaries get marijuana. . . .Department officials identified the top 10 suggestions as of Wednesday, including:”

By |2011-01-18T19:22:51-07:00January 6th, 2011|DHS Rules, Stories & Articles|Comments Off on Arizona Medical Marijuana: Public Comments to be Weighed when Redrafting Rules
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Would be Referring Doctor Not happy with First Draft of Rules

Arizona Medical Marijuana:  “The Green Leaf recently asked Dr. Ed Suter, a board certified physician and medical marijuana activist, to share his thoughts on the first draft of medical marijuana regulations released on Dec. 17 by the Arizona Department of Health Services.  Here’s his reaction:”

By |2017-02-11T17:26:04-07:00January 3rd, 2011|DHS Rules, Stories & Articles|Comments Off on Would be Referring Doctor Not happy with First Draft of Rules
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Can I Get a License to Grow Medical Marijuana in Arizona, but Sell Only to Dispensaries?

Question:  Can I create a business in Arizona that only grows marijuana and sells it to licensed medical marijuana dispensaries?

Answer as of 1/31/11:  Yes.  The January 31,2011, second draft of the rules eliminated the requirement that all dispensaries grow any portion of the marijuana.  A condition to growing, however, is that the grower must have a license to operate a dispensary.  It is not possible to get a license to grow without operating a dispensary.

Answer Before 1/31/11:  Not unless the Arizona Department of Health Services changes its proposed rules.  Proposition 203 and the December 17, 2010, first draft of the proposed rules allow only licensed dispensaries to grow and sell medical marijuana.  The  proposed rules contains this provision:

“R9-17-307. Administration.  C. A dispensary:

1.  Shall cultivate at least 70% of the medical marijuana the dispensary provides to qualifying patients or designated caregivers;

2.  Shall only provide medical marijuana cultivated or acquired by the dispensary to another dispensary in Arizona, a qualifying patient, or a designated caregiver authorized by A.R.S. Title 36, Chapter 28.1 and this Chapter to acquire medical marijuana;

3.  May only acquire medical marijuana from another dispensary in Arizona, a qualifying patient, or a designated caregiver;

4.  May acquire up to 30% of the medical marijuana the dispensary provides to qualifying patients and designated caregivers from another dispensary in Arizona, a qualifying patient, or a designated caregiver; and

5.  Shall not provide more than 30% of the medical marijuana cultivated by the dispensary to other dispensaries.”

By |2011-02-01T07:02:29-07:00December 28th, 2010|DHS Rules, Questions People Ask|Comments Off on Can I Get a License to Grow Medical Marijuana in Arizona, but Sell Only to Dispensaries?
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Call for Public Comment to the Proposed Medical Marijuana Rules

Arizona Department of Health Services Asks Public to Comment on the Proposed Medical Marijuana Rules

One of the top priorities during the implementation of the Arizona Medical Marijuana Act in the coming months is to ensure good rules are developed (called Administrative Code) so medical marijuana can be regulated effectively. Rules that are clear, objective, well-researched, and that balance competing interests are absolutely critical in order to effectively implement a responsible medical marijuana program.

The goal is to develop rules that will ensure qualified patients have access to marijuana for their medical condition while preventing (to the extent possible) recreational marijuana users from accessing marijuana through the Act’s provisions. In addition, the rules should ensure that marijuana dispensaries act responsibly and have adequate security and inventory controls.

In order to achieve these goals we need your help. Input is needed from all Arizona residents so the most responsible set of regulations are in place to balance competing interests. Please consider reviewing the informal draft rules, either individually or with other members of your community, and submit your feedback using the electronic comment form. For additional information and tips on how to provide input, review Director Humble’s Call for Public Comment.

By |2015-04-06T18:49:23-07:00December 21st, 2010|Dept Health Services, DHS Rules|Comments Off on Call for Public Comment to the Proposed Medical Marijuana Rules
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Proposed Rules on Medical Marijuana Tougher Than Voter-Approved Law; Estimate of Potential Patients Lowered

Phoenix New Times:  “Before the release of draft rules on Proposition 203, Will Humble, the director of the state Department of Health Services, estimated 100,000 people a year might qualify for medical marijuana.  Now, under the proposed regulations, only 10,000 to 20,000 people a year would qualify, he said in a news conference today. . . . The voters approved Proposition 203, and now the state wants to smother the new law with over-bearing rules.”

By |2010-12-20T19:56:17-07:00December 17th, 2010|DHS Rules, Stories & Articles|Comments Off on Proposed Rules on Medical Marijuana Tougher Than Voter-Approved Law; Estimate of Potential Patients Lowered
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Department of Health Services Issues Proposed Medical Marijuana Rules

Proposed Arizona Medical Marijuana Rules / Regulations Issued by the Arizona Department of Health Services on December 17, 2010

Arizona Governor Jan Brewer signed a proclamation on December 14, 2010, that caused Arizona Proposition 203 to become law as of the following day.  The Arizona Department of Health Services now has 120 days ending on April 14, 2010, to prepare regulations that govern Arizona’s brand new medical marijuana patients and the dispensing and growing industry.  Today, December 17, 2010, DHS issued the first draft of its proposed Title 9, Health Services Chapter 17.Department of Health Services – Medical Marijuana Program.  Here are some of the interesting revelations I found in my quick skim through the proposed regulations:

  • “Entity” means a person as defined in A.R.S. § 1-215., which states:

“Person” includes a corporation, company, partnership, firm, association or society, as well as a natural person. When the word “person” is used to designate the party whose property may be the subject of a criminal or public offense, the term includes the United States, this state, or any territory, state or country, or any political subdivision of this state that may lawfully own any property, or a public or private corporation, or partnership or association. When the word “person” is used to designate the violator or offender of any law, it includes corporation, partnership or any association of persons.”

  • Each dispensary must have a “Medical director” who is a doctor of medicine who holds a valid and existing license to practice medicine pursuant to A.R.S. Title 32, Chapter 13 or its successor or a doctor of osteopathic medicine who holds a valid and existing license to practice osteopathic medicine pursuant to A.R.S. Title 32, Chapter 17 or its successor and who has been designated by a dispensary to provide medical oversight at the dispensary.
  • Dispensary registration fee = $5,000
  • Dispensary renewal fee = $1,000
  • Fee to change the location of a dispensary = $2,500
  • Fee to change the location of a cultivation site = $2,500
  • Fee to get or renew a qualifying patient card = $150
  • Fee to get or renew a designated caregiver card = $200
  • Fee to get or renew a dispensary agent card = $200
  • A registration packet for a dispensary is not complete until the applicant provides the Department with written notice that the dispensary is ready for an inspection by the Department.
  • Officers and board members of a dispensary must give DHS a copy of their Arizona driver’s license
  • Number of working days applicable to applications for a dispensary:  overall time frame = 90; time for applicant to complete application = 90; admin completeness 30; substantive review time = 60

Regulations Applicable to Arizona Medical Marijuana Dispensaries

  • Dispensaries can be individuals, corporations (for profit and nonprofit), limited liability companies, partnerships, joint ventures and any other business organization
  • “Each principal officer or board member of a dispensary is an Arizona resident and has been an Arizona resident for the two years immediately preceding the date the dispensary submits a dispensary certificate application.”  I am very surprised by this requirement.  Proposition 203 does not contain any language that restricts who can own a dispensary or that requires owners be residents of Arizona or any other state or country.
  • The application must state whether a principal officer or board member:

1.  Is a physician currently making qualifying patient recommendations

2.  Has not provided a surety bond or filed any tax return with a taxing agency – This does not make any sense.

3.  Has unpaid taxes, interest, or penalties due to a governmental agency.

4.  Has an unpaid judgment due to a governmental agency.

5.  Is in default on a government-issued student loan.

6.  Failed to pay court-ordered child support.

7.  Is a law enforcement officer.

8.  Is employed by or a contractor of the Department

  • The application must state the name and license number of the dispensary’s medical director
  • The application must state if the dispensary and, if applicable, the dispensary’s cultivation site are ready for an inspection by the Department
  • The application must state if the dispensary and, if applicable, the dispensary’s cultivation site are not ready for an inspection by the Department, the date the dispensary and, if applicable, the dispensary’s cultivation site will be ready for an inspection by the Department
  • The application must state the name and title of each principal officer and board member
  • The application must contain a copy of the business organization’s articles of incorporation, articles of organization, or partnership or joint venture documents, if applicable.
  • The application must contain an attestation signed and dated by the principal officer or board member that the principal officer or board member is an Arizona resident and has been an Arizona resident for at least two consecutive years immediately preceding the date the dispensary submitted the dispensary certificate application.
  • The application must include a copy of the certificate of occupancy or other documentation issued by the local jurisdiction to the applicant authorizing occupancy of the building as a dispensary and, if applicable, as the dispensary’s cultivation site.
  • The application must include a copy of the dispensary’s by-laws containing provisions for the disposition of revenues and receipts.
  • The application must include a business plan demonstrating the on-going viability of the dispensary as a non-profit organization.
  • The application must state whether a registered pharmacist will be onsite or on-call during regular business hours and if the dispensary will provide information about the importance of physical activity and nutrition onsite.
  • The dispensary must employ or contract with a medical director.
  • A dispensary shall cultivate at least 70% of the medical marijuana the dispensary provides to qualifying patients or designated caregivers.  This is a surprise and probably a problem and increased costs for many dispensaries.
  • A dispensary shall not provide more than 30% of the medical marijuana cultivated by the dispensary to other dispensaries.  Another surprise!
  • A medical director may only serve as a medical director for three dispensaries at any time.
  • The building used by a dispensary or the dispensary’s cultivation site shall have a flushable toilet with running water, soap in a dispenser and toilet tissue.
  • DHS will deny an application for a dispensary if a principal officer or board member:

1.   Is not a resident of Arizona or has not been a resident of Arizona for at least two consecutive years immediately preceding the date the application for the dispensary registration certificate is submitted.

2.  Is a physician currently making qualifying patient recommendations.

3.  Is a law enforcement officer.

4.  Is an employee of or a contractor with the Department.

  • The Department may deny an application for a dispensary registration certificate if a principal officer or board member of the dispensary:

1.  Has not provided a surety bond or filed any tax return with a taxing agency.

2.  Has unpaid taxes, interest, or penalties due to a governmental agency.

3.  Has an unpaid judgment owed to a governmental agency.

4.  Is in default on a government-issued student loan.

5.  Failed to pay court-ordered child support.

6.  Provides false or misleading information to the Department.

By |2017-02-12T07:05:50-07:00December 17th, 2010|Dept Health Services, DHS Rules, Legal Issues|Comments Off on Department of Health Services Issues Proposed Medical Marijuana Rules
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