SB 1262: Constitutional Equity Enforcement

We support Senate Bill 1262 by Senator Sonny Borrelli (R), LD30 to enforce Arizona’s marijuana social equity provisions and allow for the restoration of over $200 million of cannabis licenses to the 51% owners who originally qualified and won in April 2022.

The Problem: Ignoring Social Equity Provisions

The Smart and Safe Arizona Act, which governs Arizona’s adult-use marijuana program, came into effect on November 30, 2020. A significant component of this act is the Social Equity Ownership Program, also known as the SEOP, designed to issue 26 licenses to entities whose owners come from communities disproportionately impacted by the enforcement of previous marijuana laws​​.

Proposition 207 which was the vehicle for the Smart & Safe Act was a broader attempt to rectify historical injustices associated with marijuana criminalization while aligning with principles of righting historical wrongs. The issues surrounding SEOP’s implementation highlight a broader concern regarding the accessibility and fairness of the cannabis industry in Arizona.

The program’s challenges, such as the exploitation of social equity applicants by larger companies and the dilution of the program’s intended impact, reflect a need for stricter enforcement and potentially a reevaluation of the program’s structure and rules to ensure it fulfills its constitutional and legislative intent​​.

Today, we live in a reality where the social equity program, rather than leveling the playing field, has enabled well-capitalized entities to dominate the market further, and with the help of Arizona’s state health agency,​​ has pulled the license away from the people who qualified for the program while pushing them into debt.


This isn’t our first rodeo.

We predicted this and were told to wait to see when we fought it before.

That was 2022.

These are the challenges faced by the original 51% owners under unfair agreements.

Predatory Agreements

Unfair agreements deprive original owners of their fair share while promoting a system where lower income people were used as lottery tickets to be disposed. Even though the rules stated that the 51% owner must have control, ADHS ignored it.

Unjust Enrichment

When the Arizona Department of Health Services (ADHS) set rules about ownership but didn’t follow them, they subjected a class of people who were easy targets to have their businesses taken over by predatory groups with more resources.

Tipping the Scale

When the Arizona Department of Health Services has their private legal counsel activated in the Social Equity program, it has been to ensure that the people who did not qualify for the program are able to gain control of the licenses.

Lack of Social Equity

The current system has resulted in 25 out of 26 social equity licenses being controlled by large chains. This ignores the will of the voters, and provisions meant to address social disparity are not being implemented and exploitative frameworks are being nourished.

The Solution: Social Equity Enforcement

SB 1262 enforces the laws passed by the voters of Arizona including the social equity provisions. Read the stories from July 2023 and October 2023 and think about who would be against this bill.


SB 1262 ensures that the State of Arizona acknowledges that predatory agreements can take many forms, including but not limited to, agreements predating the application for social equity licenses that unlawfully obligated the original 51% qualifying social equity owner to surrender their percentage for less than fair market value.


Ensuring compliance of the statutes promoting social equity in the marijuana industry and ensuring that the original 51% owners of Marijuana Establishment licenses issued on April 8, 2022, are protected from predatory agreements, as provided for in the Smart and Safe Act passed into law by the voters of Arizona in 2020, A.R.S. Title 36, Chapter 28.2 (the “SSA”), and the relevant regulations.


SB 1262 would change the law so that the person who met the social equity criteria and had 51% of the business on April 8, 2022 can transfer the license to any business they choose, including their own, if they were preyed on by their “business partner”. SB 1262 defines a “predatory agreement”, and has enforcement mechanisms for rule-breaking, omitting serious criminal records, or failing to obtain a legally required facility agent card before applying.

Arizona is a Social Equity State

The injustice was predicted.

Read about when the Phoenix New Times wrote about what was going to happen in what seems like prophetic predictions today.

SB 1262 is in the National Cannabis Media

MJ Biz Daily & Green Market Report have covered Natasha Yee’s February 24 AZCIR story about SB 1262.


Unfair Social Equity Market Practices


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