Arizona suit aims to keep social equity permits away from marijuana MSOs

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A lawsuit filed against the state of Arizona by a cohort of social equity advocates alleges that regulators haven’t done enough to ensure that 26 cannabis business permits will wind up with entrepreneurs who were actually harmed by the war on drugs and that the licenses might instead become controlled by multistate operators.

The suit, filed by the Greater Phoenix Urban League and social equity company Acre 41, claims that the final state regulations adopted by the Arizona health department don’t go far enough to protect the intent of the social equity provisions in state law.

According to a news release issued by the plaintiffs, “as it stands now, the regulations proposed by the state do not prohibit venture capital firms and large, mostly white-owned, multistate marijuana companies from snatching up all social equity licenses from the 26 successful applicants – effectively defeating the purpose of the voter-approved social equity program.”

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The Phoenix New Times reported that many existing marijuana companies are aggressively trying to recruit qualified social equity candidates to partner with in order to obtain some of the 26 available licenses.

The 26 permits will likely prove very valuable considering they will bring the total number of retail licenses to 169 in the limited market.