Why Is MMJ Expensive in Arizona? The Truth Behind AZ Dispensary Fees

Why Is MMJ Expensive in Arizona? The Truth Behind AZ Dispensary Fees


While the presence of medical marijuana dispensaries in Arizona represents a significant change from “zero tolerance” prohibition policies of the past, it is not without some areas that looked better on paper than in practice. And as a recent court case illustrated, correcting these areas may not be quite as straightforward as one would think.

The Complaint

Late last year, a lawsuit was brought against the Arizona Department of Health Services by two patients who were complaining that the fees set by DHS were too high, and that the department was sitting on money in excess of what was “required to administer the program,” as defined in the Arizona Medical Marijuana Act.

Over the last fiscal year, the program took in close to $20 million in fees from both patients and dispensary licencees, yet spent less than $8 million on actual costs to administer the program.

The lawyer for the patients argued that it was against the intention of the voters for surplus monies to be retained, while the Attorney General’s office stated that the setting of fees for government programs was properly a decision to be made by DHS and not the courts.

The Ruling

Maricopa County Superior Court Judge Jo Lynn Gentry ruled in May of this year in favor of the state. In her ruling, she acknowledges that the state is taking in more money than what is required to administer the program. However, Judge Gentry also pointed out that there is nothing in the act as it is currently written to prohibit such behavior.

The lawyer for the patients has indicated that he intends to appeal the ruling.

The Remedy

Since the judge based her ruling on how the act is currently written, it is entirely proper from a legal and procedural standpoint. It is unlikely that the patients’ appeal will be successful with such a ruling already in place.

Given that the decision is based on the act’s current contents, the most effective way to compel DHS to adjust fees (either up or down) would be to amend the act in a way that lays out specific mechanisms for making fee adjustments and granting exemptions for hardship circumstances.

It also should address audits and regular reviews of costs and fees to ensure that those in need are being served without extraneous burden and that the program is being administered in an even-handed fashion consistent with the economic realities of the moment.