Arizona Plans Use for $9.3 Million Raised by Medical-Marijuana Program

Arizona health officials will dip into a pot of money generated by medical-marijuana fees with the goal to improve the state’s controversial new program.

The Arizona Department of Health Services will soon spend more than $1.2 million to weed out physicians who improperly recommend marijuana to patients, help train marijuana-dispensary staff, hire private accountants or auditors to examine dispensary financial statements, and hire private attorneys to assist the department with legal issues arising from the program.

The ADHS will also continue to fund a $200,000 contract with the University of Arizona College of Public Health to, in part, review published research about the effectiveness of marijuana in treating medical conditions.

ADHS Director Will Humble said the new partnerships will help health officials keep the program as “medical” as possible.

“I’m trying to hit this from the financial angle, the medical angle, the certification angle to try to close as many gaps as I can that could result in bad outcomes for patients,” he said. “That means bringing in expertise that we don’t have in-house.”

Voters in 2010 passed a measure to allow people with certain debilitating medical conditions, including chronic pain, cancer and muscle spasms, to use medical marijuana.

They must receive a recommendation from a licensed physician and register with the state, which issues identification cards to qualified patients and caregivers. The state has granted about 31,000 people permission to use medical marijuana.

The state has collected about $9.3 million in fees from cardholders and dispensary applicants since last year, when the program began. Officials have spent about $2.5 million on staff, its contract with the University of Arizona and technology. About $6 million remains in the medical-marijuana fund.

One national medical-marijuana expert said she is unaware of any other state spending medical-marijuana program fees in such a manner. Karen O’Keefe, director of state policies at the Marijuana Policy Project in Washington, D.C., criticized how Arizona is paying for the training and other programs.

She said patients — many of whom are poor — should not have to subsidize state programs to pay for their drugs.

“They’re already in a financial hardship, they’re already suffering from some kind of ailment,” she said.

Within the next few weeks and months, Humble said the ADHS will sign contracts or agreements with:

The Arizona Board of Pharmacy, to fund a position so that staff can more quickly review how many times physicians have accessed the board’s controlled-substances database, which tracks prescription-drug use. State rules require physicians to check the database before recommending pot.

In an effort to prevent doctors from encouraging recreational marijuana use, health officials each quarter review how many times physicians who have written more than 200 recommendations accessed the database. Under this new agreement, Humble hopes officials can review that information in real time and more quickly pass information on to the regulatory boards that license and discipline physicians.

As part of that agreement, health officials will also upgrade technology for the pharmacy database so physicians can obtain access to the site almost immediately instead of applying through the mail.

The ADHS will spend up to $200,000 on this agreement the first year, Humble said, and about $150,000 the second year.

Banner Good Samaritan Poison and Drug Information Center and the University of Arizona College of Pharmacy, to train the medical directors at future marijuana dispensaries and be available round-the-clock to offer advice.

Medical directors must train dispensary agents; develop guidelines to inform patients about the risks, benefits and side effects of medical marijuana; and know how to recognize signs of substance abuse.

“I want there to be a hub resource so the medical directors have some consistency with the way they operate,” Humble said.

Humble hopes the $700,000 partnership will also help ensure patients are properly tracking the amount of marijuana they are ingesting and will ensure they are not combining marijuana with alcohol or narcotics.

A yet-to-be-determined auditing or accounting firm, to ensure future dispensaries are not profiting off medical-marijuana sales.

The dispensaries must be run as non-profits. State rules offer some guidance but provide plenty of wiggle room. Dispensaries must have bylaws that include “provisions for the disposition of revenues” and provide receipts and a business plan showing the facility is operating as a non-profit. There are no limits on compensation for dispensary personnel other than that it be “reasonable.”

Humble said the behavior of some dispensary applicants suggests maintaining true non-profit status “may not be their primary motive.” Outside auditors will comb through financial statements to ensure dispensaries aren’t engaging in a “shell game,” where they are grossly overpaying staff, board members and lessors and kicking back money to dispensary operators.

The state will spend an estimated $100,000 each year on this contract.

Private law firm Sherman and Howard, to represent the state Department of Health Services on legal issues. Legal counsel from the Attorney General’s Office typically represents the ADHS. But as more legal issues arise with the medical-marijuana program, Humble wanted to hire private attorneys to pick up the extra work so staff attorneys can concentrate on traditional public-health issues.

Rates will range between $450 an hour for partners and $140 an hour for legal assistants, according to public records.

AZ Republic
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