Posted by: Patricia Salkin | January 2, 2017

AZ Appeals Court Rejects Local Government’s Attempt to Ban Medical Marijuana Dispensaries

In 2012, White Mountain Health Center, Inc. sought county zoning approval to establish a medical marijuana dispensary (“MMD”) pursuant to the Arizona Medical Marijuana Act (“AMMA”), of Arizona Revised Statutes (“A.R.S.”) sections 36-2801 to -2819.  Maricopa County refused to issue the necessary zoning documents and White Mountain filed suit. In this consolidated appeal, Appellants sought reversal of the Superior Court’s partial summary judgment for White Mountain and denial of the Appellants’ motions for summary judgment, in which the court held that the Controlled Substances Act (“CSA”), did not preempt the AMMA. The Superior Court also determined that the County’s Second Text Amendment violated the AMMA because it limited MMDs to IND-3 zones, none of which existed in CHAA 49, and because it prohibited any land use in violation of federal law. Lastly, the Superior Court determined that the doctrine of automatic revival did not apply to revive the First Text Amendment; thus, upon striking the Second Text Amendment, there were briefly no zoning restrictions for MMDs in unincorporated Maricopa County until the County adopted the Third Text Amendment.

It was undisputed that the AMMA empowered the Arizona Department of Health Services (“ADHS”) to establish the system to register MMDs throughout the state and track compliance with statutory requirements. Under the AMMA, ADHS was required to approve at least one MMD per county, but no more than one MMD for every ten pharmacies in an area. As an initial matter, the court found that the AMMA’s provisions at issue here did not amount to “significant and unsolvable obstacles to the enforcement” of the CSA. The court therefore rejected White Mountain’s contention that Obstacle Preemption applied. Likewise, the court rejected the County’s assertion that it would be impossible to comply with both the CSA and the AMMA, and that by issuing the necessary zoning documents pursuant to the AMMA, County officials might face criminal prosecution for aiding and abetting MMDs’ violations of the CSA. In reaching this decision, the court found that the CSA did not expressly prohibit a county official from abiding by the AMMA in issuing zoning documents, and the state law required such conduct.

The two provisions of the Second Text Amendment which were at issue in this appeal were that: no acts may take place in any zone which were in violation of federal law; and MMDs were limited to IND-3 zones. The court held that because the Second Text Amendment’s provision barring any conduct in violation of federal law as applied to MMDs was in conflict with the limitation on zoning authority in the AMMA, the Superior Court did not err in striking that portion of the Second Text Amendment solely as it applied to MMDs. The court found this amounted to a local jurisdiction attempting to ban MMDs under the guise of “reasonable zoning” by authorizing MMDs in an area but then adding a poison pill to that use, prohibiting an MMD from conducting business in violation of any law. Accordingly, the court found that any permissive nature of the Second Text Amendment applying to MMDS would also be struck, and that the Superior Court correctly held that the State should process White Mountain’s application because there were no longer any AMMA-compliant zoning regulations. As such, the court affirmed all of the judgments entered for White Mountain, with the exception of the Superior Court’s award of sanctions of $5000 against the County.

White Mountain Health Center v Maricopa County, 2016 WL 7368623 (AZ App. 12/20/2016)


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