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.
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.
Acknowledgement
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.
Compliance
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.
Enforcement
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
