A corporate Weed company nabbed 4 rare Arizona equity licenses, but now they're now 'placeholders'

A corporate Weed company nabbed 4 rare Arizona equity licenses, but now they're now 'placeholders'

Multi-State Cannabis Company Uses Arizona Social Equity Licenses as "Placeholders".

Four Arizona social equity dispensary licenses are being squandered by a multi-state marijuana company as "placeholders" to meet a state deadline, with operating hours set to limit the number of customers.

Mint Cannabis is headquartered in Guadalupe and has dispensaries in Arizona, Michigan and Missouri. It acquired control of the four licenses and used them to place four dispensaries inside a single location at an El Mirage business complex.

The reason they're all in the same spot, according to Mint's co-owner Raul Molina, was to make the Department of Health Services' opening deadline.

The business plan is the latest affront to cannabis advocates who want to see the state reform its social equity license program. Voters authorized the program when they approved recreational marijuana in 2020.

It gave away 26 dispensary licenses in hopes of correcting years of marijuana enforcement that resulted in disproportionate convictions among non-white residents. But corporate dispensary companies now control 25 of the licenses.

A large "Cannabis Outlet" sign greets visitors on one corner of the strip mall at 15235 N. Dysart Road, where a chiropractic office and medical clinic are also located. Doors to the four dispensaries are inside a single suite within the building. Each door lists a different company name but the same hours of operation, 8:30 a.m. to 5:30 p.m., Monday through Thursday.

Cannabis Outlet is the name on one of the doors, while the other three sport the names of the limited liability corporations that applied for the licenses: "MCD-SE Venture 25," "MCD-SE Venture 26" and "Blue Palo Verde."

The state's health agency, which oversees marijuana regulation, required in its rules that social equity license holders had to open their dispensaries by Oct. 8 or potentially lose the opportunity to open at all. Once operational, dispensaries must stay open at least 30 hours per week.

But on Monday morning at about 9 a.m., all of the interior doors to the four dispensaries were closed. Inside the unfurnished suite, a lone employee sat at a small table to inform visitors the place wasn't actually open and might not be for up to a year.

'Gaming the system'

Molina, the dispensary co-owner, said Monday he was "surprised" to hear that the dispensaries weren't open, emphasizing he didn't blame the woman staffing the suite. He said the four dispensaries should be open according to the posted hours and that he would ensure they would be open by the next day, at the latest. He added that customers should be able to go into and buy products from each of the four separate dispensaries during business hours.

He expects that each dispensary will be relocated sometime this year, probably in four to eight months. In the meantime, the current locations serve as "placeholders" to keep the licenses active, he said.

Mint doesn't promote or advertise the dispensaries. They're not only closed on weekends, but also on Fridays, the day of the week most dispensaries see significantly larger sales volume. Molina acknowledged the posted hours of the dispensaries were created "to fill out the minimal hours that the state requires until we get them to their final resting home."

The dispensary company has done nothing illegal in locating the dispensaries and worked closely with the state health agency in getting them approved to open, Molina said. The company invested in the temporary location to "make sure I had all the time that I needed" while also complying with the agency's rules, and didn't ask the state for a deadline extension, he said.

"We're doing the best we can," he said. "The state knows my intention of where I'm going with these licenses."

El Mirage approved the arrangement.

"The marijuana dispensaries are permitted at that location, which is an urban corridor, and we don't have distance restrictions as long as they comply with county, health and state regulations," city spokeswoman Kari Sliva said.

Other Valley cities, like Phoenix and Glendale, require a mile of separation between dispensaries. When asked if agency staff had any concern about Mint's plan, state Department of Health Services spokeswoman Niala Charles said no one's complained about the businesses.

But cannabis activist Celeste Rodriguez, who's been critical of the way the state's social equity license program was handled, called the situation a "perversion of the voters' intent."

"Gaming the system to shut out real social equity participants not only hurts communities of color but contradicts the will of the voters," she said. "DHS should take action against these sham dispensaries."

Rodriguez once sought to acquire a social equity license, but now helps former applicants who accuse dispensary industry moguls of obtaining their licenses through "predatory" tactics.

She and others sued the state unsuccessfully over the program's rules in 2021. The activists warned wealthy people would buy out the social equity applicants, who were required to have low incomes and a marijuana arrest record for themselves or a family member.

After the state gave away the 26 licenses in its April 2022 lottery, tales emerged of license winners who felt they were cheated out of control or ownership of their dispensaries for a fraction of what the deals were worth.

Efforts by Rodriguez and several applicants resulted in a bill this year by state Sen. Sonny Borrelli and three other Republican lawmakers that directs the state Attorney General's Office to investigate cases of alleged predatory acquisitions. The bill seeks to return control or ownership of improperly obtained licenses to the original applicants.

Original applicants had to own at least 51% of a company applying for a license in the lottery under the state's rules, but could later sell their remaining share. Terms of the deals Mint Cannabis made with the four original applicants aren't public.

Owning up to arrangement

In a previous article in The Arizona Republic about social equity licenses being acquired by corporate dispensary companies, Molina said he understood the program "didn't pan out as well" for some applicants. But he insisted applicants whose licenses are now controlled by Mint were well taken care of financially.

Molina declined to give details about the terms of the agreements between Mint and the original applicants, such as the split in license ownership. He said he understands how the "placeholder" dispensaries might not pass the "warm and fuzzy test."

Yet he touted what he described as Mint's generally excellent reputation in the industry. Once they move, Molina predicted, the four dispensaries will be among the state's top marijuana retail outlets.

"You'd be hard-pressed to find too many people that have something bad to say about us," he said. "And for sure, if somebody does, you know, we try to do the best we can to remedy everything."

The Republic then mentioned the woman staffing the suite was working all alone with no security while technically running four cash-only dispensaries.

Molina said he would immediately assign a guard at the location.

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Region: Arizona

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