Lawsuit Tied to Home Grows Could Alter Arizona Medical Marijuana Market, But Industry Skeptical

arizona medical cannabis

Arizona’s medical marijuana industry has already dealt with enough turbulence to last a lifetime. But MMJ professionals might have to brace themselves for more uncertainty and change in the near future.

Two residents have filed a lawsuit seeking to overturn the state’s ban on home growing for medical cannabis patients who live within 25 miles of a dispensary, arguing that it violates their rights under a provision in the Arizona Constitution tied to health care. The ban – a highly controversial piece of Arizona’s medical marijuana law – essentially ensures that the lion’s share of the 40,000 registered patients have to buy cannabis from state-licensed MMJ centers rather than cultivate their own or buy it from caregivers.

Dispensaries benefit greatly from this regulation, of course, as they have almost total control of the market.

So a change in the law could have repercussions for those already operating dispensaries as well as the dozens of entrepreneurs preparing to open one soon. If the suit is successful, it’s conceivable that a few thousand patients would opt to cultivate their own cannabis, deeming it cheaper than paying dispensary prices. That would shrink the overall market available to MMJ centers and limit their future potential.

Many dispensary owners have invested a considerable amount of money – in some cases hundreds of thousands of dollars – to obtain licenses and launch, developing business plans based on a certain number of patients. A decrease in the customer pool could force some dispensaries to scale back or, in a worst-case scenario, even close.

On the bright side, however, companies that sell cultivation equipment and provide related services targeting home growers would have a sizable market going forward.

“A lot of this has to do with price,” said attorney Michael Walz, who is representing the two men behind the lawsuit. “Many people who are qualifying patients have severe financial problems. At dispensaries it costs about $400 an ounce for medicinal grade marijuana now. A lot of people can’t afford that.”

The lawsuit estimates that home growers can produce medical-grade cannabis for $50 an ounce after the initial investment, once they know what they’re doing and have the proper equipment, Walz said.

Many patients in Arizona have been growing their own cannabis due to delays in the roll out of the state’s dispensary program, which has been beset by delays and challenges. Dispensaries began opening up late last year, and several dozen are now operational. That’s forced patients within 25 miles of these centers to stop growing their own.

So what are the chances the lawsuit will be successful?

Several industry professionals said it doesn’t appear to have much merit, with one even calling it “laughable.”

“Voters voted for the 25-mile rule, so anybody taking the other side and saying that it’s unfair is basically saying that voters didn’t know what they wanted,” said Moe Asnani, who runs the consulting firm Arizona Dispensary Solutions and operates several dispensaries. “They are taking the approach of those on the far right (who have tried to sink the program). The truth is that when people went to the ballot and picked a side on this issue, they did it with the understanding that this would be regulated through dispensaries.”

Indeed, the whole provision tied to home growing was deemed a necessary inclusion to sway voters in favor of MMJ and get the law passed. The Arizona Medical Marijuana Act passed by the slimmest of margins (just 4,300 votes), and it very well could have failed without the home-grow provision.

Walz, however, said that the Arizona Constitution still overrides any state statue.

“The fact that voters passed it has no bearing whatsoever,” Walz said. “It’s an absurd argument.”

Even if the suit is successful, some dispensary professionals believe the impact will be minimal, saying that most people who try to grow their own fail and that the vast majority of patients will prefer the convenience of MMJ centers.

12 comments on “Lawsuit Tied to Home Grows Could Alter Arizona Medical Marijuana Market, But Industry Skeptical
  1. rt on

    Many dispensary owners have invested hundreds of millions of dollars to obtain licenses and launch, developing business plans based on a certain number of patients.
    thats bullcrap

    Reply
  2. Cathy on

    Read the language of the law. It doesn’t say what the AZDHS says it says. The law only an extra protection for those who live outside of a dispensary. Remember who is for the patients and those who are not..this is not about money it is about health.

    Reply
  3. Doug Banfelder on

    Home grows are problematic from an insurance perspective as well, because no carrier will knowingly provide homeowners coverage if there is a cultivation within.

    2-3 plants for (sanctioned) personal use? Likely ok.

    30 plants in a converted bedroom or garage? Don’t count on the carrier paying claims for fire or water damage caused by the grow. Even totally unrelated claims may be denied.

    One more concern: potential breach of contract issues with one’s mortgage lender or landlord, again because carriers won’t knowingly insure such operations.

    Reply
  4. Tug on

    They could have put language in the statute that “only white male landowners could cultivate”, that doesn’t mean that it would be found constitutional. Maybe the only way to fix this is to pass the SAFER Initiative.

    Reply
  5. Jane Klein on

    Personal gardening is a patient’s right that the industry should not resent. Home gardens help maintain a consistent source of a specific strain and the therapeutic benefits of gardening are well documented. Mostly it will lead to an appreciation for the selection and quality of dispensary products.

    Reply
  6. RayL on

    Doug, I’m for cardholder home grows but they all should definitely have yearly inspections and permits issued. The lawsuit doesn’t explicitly mention I think it costs the plaintiff about $50/ounce where he’s being nickeled and dimed to death with $500 an ounce by dispensaries.

    Reply
  7. Kevin on

    So using your logic Ray, wouldn’t it be reasonable to ask the SAME THING from those who brew BEER or Whiskey or Wine at home? Same difference… I can honestly TELL you that I’ve NEVER seen a Dispensary GIVE Medication away to people who can’t afford it. I’m sure they have some program, but it’s the HOME Grows that allow the poor access to medicine. It’s the Home grows that end up GIVING away a substantial amount of medicine, JUST TO HELP a patient who’s in pain and has NO $$$. There’s NO reason for anymore Govt. regulation and interference in allowing people to be able to grow their own if that’s all they can afford to do. $400/oz is SUBSTANTIAL when you’re on disability (if you’re UN-fortunate enough to be able to DRAW disability) $50/oz is IMHO, a little high once the initial investments outlay. Not too much, but about $10/oz. That’s just off of my experience… Disclaimer: NOT THAT I’VE EVER GROWN anything or WILL EVER grow anything! 😉 I believe that the older the program gets the more the $$$ will DROP. I’ve seen some prices in CO dispensaries that’ll BLOW your mind! With quality being VERY HIGH… (no pun intended) I’m TIRED of being PENALIZED for choosing to use a “Natural Pain Reliever” instead of slobbering on myself with the HIGH doses of Opiates I was on due to an Industrial Accident. By doing that, we’re allowing the Government to pseudo-legalize marijuana while STILL stigmatizing it and keeping the price of it HIGH. The ONLY thing dangerous about Cannabis is the PRICE of it. By allowing them to do this, we’re agreeing that it’s STILL illegal, because they reserve the right to RAID a dispensary anytime they so choose! Therefore basically creating a “GRAY Market”. Even if they’re abiding by State Law! That tactic was the whole Master Plan of the DEA… it was to drive the cost SO high that the normal guy can’t afford it. That was their plan and it’s WORKED wonders up until now. At $400+/oz, we’re paying MORE for our medicine than those who smoke CIGARETTES and THOSE are killing people every minute. Not ONE person has died of Marijuana Use specifically, it’s been shown to KILL Cancer, conforms PERFECTLY to the Endocannabinoid system of the human body and we’re paying $400/oz for it? When the price drops is when we’ll KNOW it’s truly LEGAL! Until then hang tough y’all…

    Reply
  8. AZMedicalBud on

    The corporate, greedy dispensary owners hired attorneys to draft Prop 203, and insisted the (UN Constitutional and illegal under A.R.S statue) 25 Mile Rule be snuck into the verbiage. The ONLY state it is dictated the dispensary owners can monopolize the MMJ market. The $400 medical marijuana I have seen come from AZ dispensaries is “B+” grade at best. Being from Colorado, where real “A” grade can be obtained for $250, because home cultivation is LEGAL.
    The 25 Mile Rule creates the ultimate monopoly (UN Constitutional) and an A.R.S. statue states “no law or government regulation can dictate where a patient must purchase their medication”.
    If allowed, whats next; if Fry’s claims if you live within 25 miles of a Fry’s, you can no longer have citrus trees or grow your own tomatoes ? Or starting January 1st, if you live in Phoenix, you must by all of your prescriptions from WalMart. Ridiculous right ? That is how stupid the greedy dispensary owners think of the patients of Arizona.
    Live it up while your “dream” lives a few more months, greedy dispensary owners. The patients RIGHT to cultivate their own medicine will prevail. The Constitution shall prevails. If you didn’t plan for or see this coming in your “business plan”, you’ve been consuming way too much of your over priced product.

    Reply
  9. Lyle Courtsal on

    It would seem to be pretty important from both a market and a medical perspective to ensure that home and collective grows would be specially protected by law. See also http://www.rxmarijuana.com on more med/psych uses of cannabis; Washington state supreme court has made medical necessity legal for patients at the state level there. . . Business misconceptions are limited by narrow-minded worldviews of moderators; probably not a good idea to censor this one. . . Also remember that food oil is a priority use for cannabis hemp products, not fuel oil. That is covered by other ag markets and also we should have made a clean energy transitions 40 years ago. Oooooppps. . . http://www.hemptrade.ca

    Reply
  10. Robert Johnson on

    God said’ go forth and plant seed? Seems simple enough?(Johnny Apples seed?)but Lets talk about all the quality ‘Dank’ and how it will leave with the experienced growers that are having to move out! of this ‘Greedy’ state with all their Retirement/Tax paying, Retired Growers and of course,all their growers/Breeders ‘Genetics’ and are moving, (ASAP) out of Arizona to ‘less Hostile’ states, We have found the place, and we are Moving to another state, life is to short, we ALL know you can’t ‘Fix’ Stupid, maybe? It’s Time for a(clean out of the Capitol)down, then vote in real people?

    Reply
  11. AZMedicalBud on

    Well said Robert. Unfortunately my brother has already moved back to Colorado, as well as numerous other top quality cultivating geniuses I have had the pleasure to meet and work with over the years.
    I’d like to think there will be some top quality cultivators left here in Arizona, but the “B” quality greedy corporate commercial (crap) being peddled as “medicine” dominates and the patients of Arizona are the victims.
    QUIT SUPPORTING THE DISPENSARIES. IF THEY STOP GETTING YOUR MONEY, THEY WILL BE FORCED TO ACTUALLY PRODUCE “A” GRADE MEDICINE AT A REASONABLE COST.

    Reply

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