Nonprofit entities that want to obtain a dispensary registration certificate (aka license) to sell medical marijuana in Arizona have a lot of tasks to accomplish before they can open for business. At this time, however, the single most important task for all would-be dispensaries is to locate a properly zoned place within the desired CHAA to operate the dispensary and tie it up with a lease or an option to lease.
Arizona’s medical marijuana law and the Arizona Department of Health Services rules provide that the application for a dispensary registration certificate must show the location where the dispensary will operate. In addition, Arizona Department of Health Services Rule R9-17-304 states:
To apply for a dispensary registration certificate, an entity shall submit to the Department the following
6.Documentation from the local jurisdiction where the dispensary’s proposed physical address is located that:
a. There are no local zoning restrictions for the dispensary’s location, or
b. The dispensary’s location is in compliance with any local zoning restrictions;
7. Documentation of:
a. Ownership of the physical address of the proposed dispensary, or
b. Permission from the owner of the physical address of the proposed dispensary for the entity applying for a dispensary registration certificate to operate a dispensary at the physical address;
Translation: The dispensary applicant must obtain and submit with the application for a dispensary registration certificate a written statement from the applicable zoning authority that the proposed dispensary premises is “groovy” and a written statement from the landlord that the applicant can operate a dispensary at the location designated in the application (or proof the applicant owns the land).
Actions Prospective Dispensaries Must Take Yesterday
Here are the actions every would be dispensary must take as soon as possible:
1. Hire a zoning attorney who can tell you which locations in your desired CHAA are properly zoned and meet the requirements of the ADHS rules. This step is very important because it is a total waste of time to search for a location and get it leased and find out the location is not properly zoned or too close to a school. The zoning attorney will also apply for the Rule R9-17-304.D.6 zoning comfort letter from the applicable zoning authority.
2. Visit only properly zoned sites that are not too close to a prohibited structure and identify where you want to operate the dispensary.
3. Sign a lease or an option to lease for your desired location (or enter into a contract to purchase it). Make sure the lease has language in it that requires the landlord to give you a written Rule R9-17-304.D.7 comfort letter not later than April 1, 2012.
Cities are severely limiting the areas where a dispensary can be located. When you add the complexity of understanding the applicable zoning ordinance with the further limiting CHAAs, the result is a very difficult problem simply to determine where dispensaries can be located within a CHAA. In many CHAAs, the number of usable sites is limited, which is causing a modern day equivalent to the Oklahoma land rush of the 1800s.
If you cannot find a location and legally tie it up with a lease or a lease option, it’s game over. If your dispensary has not yet found and tied up a site, you should immediately contact an experienced zoning lawyer to explain the zoning rules for your desired area and show you how the CHAAs interact with the zoning. You want the zoning attorney to give you a map that shows exactly where within a city and a CHAA the zoning is right for a dispensary. Use that map to find a site. Enter into a lease or an option to lease with the landlord. Have your zoning lawyer assist in completing the necessary city paperwork to get your site approved by the city.
Nothing else matters as much now as finding a site that is properly zoned and getting it under lease or an option to lease.
I recommend Maricopa County zoning attorney Michael Curley. Call him at 602-903-3077. You need a zoning lawyer to explain where you can lease your site and what locations are available in your desired CHAA.
See “Must My Dispensary Obtain a Conditional Use Permit from the City before it can File an Application for an Arizona Medical Marijuana Dispensary License?,” “How Does My Dispensary Tie Up Land for its Retail & Cultivation Sites?” and “CHAA on This!“