BY KATYA SCHWENK Quietly, ‘Big Pot’ is poised to swoop in on Arizona’s license lottery. Craig LaRotonda F Shell Game or more than a decade, Mary Piña and her family were haunted by the repercussions of a few grams of marijuana that Phoenix police found during a traffic stop. In 2010, after being pulled over for a minor traffic violation, Piña’s 18-year-old son was stuck with a felony charge for drug possession. For years, the convic- tion followed him. It was a red flag on his background checks. It kept him from a stable job. Earlier this fall, though, things changed again, this time for the better, when the drug charge became the equiva- lent of a lottery ticket. It qualified him and his family in Maryvale to enter into a lottery for a dispensary license through Arizona’s new “social equity ownership” program. Voters had enacted the idea to offer a form of reparations to communities that had been disproportionately and excessively harmed by harsh pot enforcement laws. Suddenly, that decade-old charge was no longer a point of shame. It was valuable. Piña found herself and her fam- ily being courted day and night by an investor who wanted to partner with them to apply for a license. That prospect of redemption was brief. Now, Piña says, she is disillusioned with the program. “I feel cheated,” she said. “And lied to.” Last fall, across Arizona, cannabis companies and in- vestors with deep pockets assembled pools of applicants like Piña from low-income communities and communities of color. They were to front bids in the lottery for social equity licenses, the last of 169 dispensary licenses that the state will award. This spring, 26 of those names will be plucked from the hat and given a dispensary license. Many pot industry analyists place the value of that asset conservatively at around $8 million, but some industry in- vestors estimate it could be worth as much as $15 million, according to legal documents obtained by Phoenix New Times. Phoenix New Times also obtained and analyzed data about the 1,506 applications submitted to the Arizona Department of Health Services. The data show that major industry players backed most of these applications, vying for a slice of the profits from a program ostensibly meant to benefit disadvantaged entrepreneurs. At least 58 percent of the applications submitted to the state have ties to industry money or major investors, New Times found. Hundreds of applications were backed by es- tablished multi-state operators that already have dispen- sary licenses in Arizona, such as Mohave Cannabis Co. Others are tied to more shadowy corporate entities. Two shell companies with business addresses listed in Cheyenne, Wyoming, backed more than 200 applications. And another limited liability company in New Mexico, whose true owner was not apparent from public corporate documents, backed another 78 applications. One was Piña’s son. Critics of the social equity program’s rollout say that the Rodriguez, a long-time critic of the social equity lottery and a principal at cannabis company Acre 41. Rodriguez and Acre 41 sued the state over the program, but the case was ultimately dismissed. Not everyone finds fault with the infant program. “It’s a win-win for all parties if we are fortunate enough to get selected in the lottery,” wrote Curtis Devine in an email. He owns Mohave Cannabis Co., which worked with more than 180 social equity applicants. “If the social equity applicant wants to sell, I’m happy to buy,” Devine said. “If they want to stay in the game, I’m happy to help them create a prosperous business.” In a statement to New Times, Steve Elliott, a spokesper- son with the Department of Health Services, wrote that “everything ADHS has done to establish an adult-use mar- ijuana social equity program is in accordance with require- ments in the voter-approved law.” Elliott added the state agency was reviewing the applica- tions carefully to ensure they did not violate the state’s rules. “Contracts obtained by New Times illuminate some of the details offered to applicants. Critics say they reveal key loopholes in the state’s rules that allowed investors >> p 14 13 applicant pool is vindication — proof that they were right to warn that the state of Arizona was not doing enough to keep Big Pot from tipping the social equity scales ito its advantage. “We predicted everything that took place,” said Celeste phoenixnewtimes.com | CONTENTS | FEEDBACK | OPINION | NEWS | FEATURE | NIGHT+DAY | CULTURE | FILM | CAFE | MUSIC | PHOENIX NEW TIMES FEB 24TH– MARCH 2ND, 2022
