Problems Looming as AZ Preps for New MMJ Licensing Round

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The lottery system used to award medical cannabis licenses in Arizona is at least partly to blame for a reported deluge of business lawsuits regarding the industry, but there are other problems the state will have to face as well as it prepares to issue new dispensary licenses this summer.

A lack of access to banking, unchecked expectations and partnering with strangers are also among the reasons lawsuits are plaguing the state’s MMJ landscape, according to the Arizona Daily Star.

It’s an important issue as the state readies this summer for its first round of new license applications since 2012. Licenses will again be awarded by lottery.

One “common scenario,” the report said, was when several people applied together for licenses in districts with an agreement that they would share any license that was won. But sometimes, a partner who won a license would renege and not share the license, spurring lawsuits by the other partners.

The lack of industry access to banking also makes it easier for people to steal, embezzle, and commit tax fraud, Scottsdale lawyer Richard Keyt told the newspaper.

Instead of partnering with strangers, aspiring license applicants are better off getting loans, starting their own grow sites, and renting their own properties, said Vicky Puchy-Saavedra.