AZ Judge Dismisses Lawsuit Against Social Equity Dispensary Licenses

An Arizona judge has dismissed a lawsuit challenging the state’s rules for implementing a program to award 26 social equity business licenses that the Arizona Department of Health Services (ADHS) will award under Arizona’s 2020 law legalizing recreational marijuana.

The ruling issued by Maricopa County Superior Court Judge Randall Warner said the rules published by the ADHS satisfy the broad mandates set under the voter-approved law put on the ballot through an initiative campaign.

The potentially lucrative social equity licenses will be issued under the law’s provision to set aside 26 licenses for “people from communities disproportionately impacted by the enforcement of previous marijuana laws.”

The lawsuit filed by the Greater Phoenix Urban League and a corporation said the rules are deficient, lacking provisions such as a prohibition against license transfers and a requirement that licensees’ expenditures and profits remain in their communities.

Warner said the law’s drafters gave the department leeway on how to write the implementation rules. As drafted, those rules “are reasonably designed to meet its objectives,” the judge concluded.

James Cool, a lawyer representing the lawsuit plaintiffs, did not immediately respond to a request for comment, including whether his clients will appeal.