Before the Tucson City Council met in September to consider allowing a new recreational marijuana dispensary within city limits, its members received a cautionary message.

The prospective dispensary would operate under one of Arizona’s 26 so-called social equity licenses, designed to uplift individuals harmed by the War on Drugs as part of a voter-approved initiative to legalize marijuana. But its owner would be Mohave Cannabis Co., “a firm nearly universally recognized to be the most exploitative of social equity applicants,” according to the warning.

The email came from Julie Gunnigle, legal director for marijuana reform organization Arizona NORML. She argued that if the council approved the request from Mohave—which had obtained five social equity licenses using tactics Gunnigle and others deemed exploitative—it would be a “powerful blow to the special exceptions process,” an extra layer of city review meant to safeguard the community from “bad actors.” 

Zsa Zsa Simone Brown, a cannabis entrepreneur with advocacy group Acre 41, sounded the same alarm during the council meeting.

“At a minimum, Mohave Cannabis should answer the questions raised by the recent lawsuits that they’re involved in that alleged exploitation and fraud of vulnerable licensees in the social equity process and program,” she told city leaders. 

The council voted 4-2 to approve the dispensary anyway, with some members claiming their hands were tied.

“Today’s decision is a land use decision, solely, and it’s not our role to investigate the permit holder or to redress wrongs that were made at the state level,” said Councilmember Kevin Dahl, who represents the area where the dispensary plans to open. “While I agree that the state’s permitting process is flawed, that is not in the purview of this body.” 

Dahl noted the dispensary would take over a vacant and neglected building, and mentioned that the applicant had “generously agreed” to donate $10,000 to environmental nonprofit Trees for Tucson.

Still, the donation pales in comparison to the profits Mohave could see once the dispensary opens. And, as Gunnigle pointed out, the individual the firm initially partnered with to obtain the license—and later “discarded”—won’t reap the long term benefits of the lucrative license.

Complex zoning laws are just one of countless barriers faced by the state’s social equity licensees as they race against an 18-month deadline to open dispensaries. As with other obstacles baked into the program, well-heeled corporate dispensaries are better equipped to navigate them than private individuals. 

Dispensaries opened under social equity licenses are considered marijuana establishments, meaning they allow just recreational, and not medical, marijuana sales. This created a patchwork of zoning laws because many cities decided recreational cannabis could only be sold inside a medical marijuana dispensary after voters passed Prop. 207, effectively banning standalone recreational dispensaries in those jurisdictions.

Mayor Regina Romero was one of two officials to vote against Mohave’s request, saying she wanted to see “a better investment, better opportunity for the area,” which already deals with open drug use. Councilmember Lane Santa Cruz was the other, though they declined to comment through a spokesperson. 

The rest of the council members present voted in favor of the request, despite at least one member calling advocates’ concerns about the request “totally founded.” 

“They’ve worked the system over, and I’ll say that on the record,” Councilmember Paul Cunningham said of Mohave and other corporate dispensaries that had overtaken the social equity program. “It’s absolutely ridiculous that they’re able to do this. But the bottom line is, I’ve gotta take up for my town.”

Mohave Cannabis declined to comment for this story.

This reporting was made possible thanks to generous support from the Fund for Investigative Journalism.


Corporate marijuana dispensaries flex financial muscle, overtake Arizona’s social equity program

Arizona’s social equity program created a path to entrepreneurship for individuals harmed by previous marijuana laws when the state legalized adult-use cannabis in 2021. But nearly two years since 26 social equity applicants were drawn from a lottery, existing corporate dispensaries have wielded their power to get a stake in at least half of the lucrative licenses, owning 11 of them outright.


Creative Commons License

Natasha Yee is a Fund for Investigative Journalism Fellow for AZCIR as part of a six month investigative reporting fellowship.