The legal action seeks to preserve business opportunities for Arizona entrepreneurs against encroachment by large national companies.
The lawsuit, on behalf of the Greater Phoenix Urban League and Acre 41 Enterprises, a group of Black female entrepreneurs, alleges that the State of Arizona has failed to implement the social equity provisions of Proposition 207, the 2020 voter-approved initiative that legalized recreational marijuana possession and use.
Prop. 207 directed the State to issue 26 “social equity” marijuana dispensary licenses and to implement a program to ensure that the licenses were owned and operated by individuals from communities disproportionately impacted by the enforcement of previous marijuana laws.
The voters’ intent could be undermined by efforts, as described in a November 17 Phoenix New Times article, by large cannabis companies and venture capital firms working to find qualifying individuals – from largely poor, Black and Latino communities – to “front” the investors’ applications for the 26 licenses that were to be set aside on social equity grounds. If these companies are successful, within months after the State allocates the licenses, all 26 social equity dispensaries could be owned and operated by multi-state marijuana corporations instead of individuals from communities most harmed by the “War on Drugs.”
“What the voters were trying to do was enrich communities that were impacted by the drug war,” Frazer Ryan attorney Jimmy Cool told the New Times. “From our clients’ perspective, all [the program] does is enrich 26 people.
” The lawsuit seeks to enjoin the State from accepting applications and awarding licenses until the problems with the State’s proposed rules can be resolved. Nevertheless, the Arizona Republic reported on December 1 that the Arizona Department of Health Services is moving forward (see “Arizona Accepting Applications for 26 Lucrative Marijuana Licenses for ‘Social Equity‘”).
In the News:
- “Big Pot Stands to Win Big from Arizona’s Social Equity Lottery,” Phoenix New Times, February 23, 2022
- “Activists Sue Over Social Equity Marijuana Licenses, Alleging the Licenses Are Going to Big Cannabis Companies,” Fox 10 News, January 28, 2022
The Phoenix Business Journal, ABC 15 News, and Marijuana Biz Daily have also reported on the lawsuit.
See also: Lawsuit and related documents | Press release
