Breaking News – Lawsuit Filed to Enjoin Arizona’s Social Equity Program Regulations

On November 18, 2021, the Greater Phoenix Urban League and Acre 41 Enterprises, LLC (the “Plaintiffs”), sued the State of Arizona, the Arizona Department of Health Services (the “Department”), Governor Ducey, and the Director of the Department for their purported failure to implement the social equity provisions of Proposition 207 by issuing final regulations that undermine the will of Arizona voters. Under Proposition 207, which was passed by the voters in Arizona in November 2020, it is now legal for license holders to sell marijuana for recreational purposes.

Moreover, as part of the proposition, the following was passed which created Arizona’s SEOP – the Department will pass rules for the creation and implementation of a social equity ownership program to promote the ownership and operation of marijuana establishments and marijuana testing facilities by individuals from communities disproportionately impacted by the enforcement of previous marijuana laws. ARS § 36-2854(A)(9). In October 2021, the Department released the final regulations for the SEOP after issuing several draft regulations. The final regulations became effective on November 17, 2021. Many individuals and companies commented on the proposed regulations.

The Department was scheduled to start receiving applications in December 2021, but now that seems to be

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