FACT CHECK: Does Proposition 205 block new marijuana dispensaries from doing business?

Posted: 5:25 PM, Sep 30, 2016
Updated: 2016-09-30 22:22:49-04

Arizona is one of five states where voters will decide whether to legalize recreational marijuana this November.

We have reported on the weed effort, noting that individual, anti-weed contributions outnumber pro-weed contributions  almost four to one .

Sept. 15 attack ad  from an anti-marijuana group, Arizonans for Responsible Drug Policy, portrays the potential passage of Proposition 205, which would legalize recreational marijuana, as a monopoly for existing medical marijuana dispensaries.

"Prop. 205 is a 20-page special interest goldmine that elevates the rights of users over the public," the ad’s narration claims. "(It) blocks market entry for new dispensaries."

Prop. 205 "blocks market entry for new dispensaries."

The first medical marijuana dispensary in Arizona opened in December 2012 after voters approved the act in November 2010.

But, we wondered, would new dispensaries hoping to sell legal, recreational pot not be able to do so under this initiative?

The state’s Health Services Department currently regulates medical marijuana.

If Prop. 205 passes, a new state agency, the Arizona Department of Marijuana Licenses and Control, would regulate both recreational and medical marijuana.

Part of this would be done through a  seven-member Marijuana Commission  within the new agency, which would approve and deny licenses.

Ciara Archer, a spokeswoman for Arizonans for Responsible Drug Policy, said existing medical marijuana dispensaries are given preference to become retail marijuana outlets.

"Newcomers to the market cannot even apply for licenses until after Dec. 17, 2017, nearly a full year after medical marijuana business owners can apply and have licenses awarded to them," Archer said.

But that is not the same thing as an outright block on new dispensaries.

Will Humble, a health policy expert at the University of Arizona, said the new agency still has to set several rules if Prop. 205 passes, including how much pot each retail store can produce, as well as a cap on the number of stores permitted.

"While the existing medical marijuana dispensaries would have a distinct advantage to becoming a retail store, it’s not a total blocked entry. The Prop. 205 cap is 147 dispensaries," Humble said.

According to Humble, the agency could also add an undetermined number of new stores to "meet demand" in 2021. 

Barrett Marson, a spokesman with the Campaign to Regulate Marijuana Like Alcohol, a pro-marijuana group, said there is "certainly growth" for new licenses in the initiative.

Moreover, according to the  initiative’s language , the new agency would not set rules on recreational marijuana until September 2017.

Our ruling

The ad claims Prop. 205 "blocks market entry for new dispensaries."

While the ballot language does give an upper hand to existing medical marijuana dispensaries, it does not completely block a new dispensary from entering a legal recreational marijuana market.

We rate the ad’s claim Mostly False.