A Close Look at the Arizona Draft Social Equity Regulations (Comments Due Today!)

The Arizona Department of Health Services (the “Department”), which is the cannabis regulatory authority in Arizona, released the draft regulations for the Social Equity Opportunity Program (“SEOP”). Click here to view the draft regulations. Comments to the draft regulations are due by Sunday, May 16, 2021 (that’s today!).

Under the SEOP, Arizona will issue another 26 licenses. As set forth in the Arizona Revised Statutes (“A.R.S.”), the SEOP regulations are for:

The creation and implementation of a social equity ownership program to promote the ownership and operation of marijuana establishments…by individuals from communities disproportionately impacted by the enforcement of previous marijuana laws. A.R.S. § 36-2854(A)(9).

Beyond the foregoing, there is not much information regarding the SEOP in the statutes. So, have the draft regulations furthered this stated goal, which was approved by the voters of Arizona? It seems like there may be other ways to promote the intended goal of the SEOP.

Reduction in Licensing Fees

Let’s start with the good news. Under the adult-use program, the initial licensing fee is $25,000. However, the Department has now proposed that the initial SEOP licensing fee would be $5,000. The reduction in fees certainly furthers the goal of “social equity”.

Who May

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