Cutline (Photo by XX) Flower Power from p 13 But marijuana industry experts and busi- nesspeople who spoke with New Times — some on the condition of anonymity — said that high-minded language masks how the association wields its power. The ADA may be “the voice” of the state’s cannabis industry but it also makes sure it’s the only one, said Julie Gunnigle, the legal director of the Arizona chapter of the National Organization for the Reform of Marijuana Laws. “There’s very much a culture of fear and silence,” Gunnigle said. “There are so many brands who are terrified because if they speak out against the current market system, they are at risk of losing their contract for their license and they can’t produce.” The ADA did not respond directly to a list of questions from New Times. But in an emailed statement, the organization said it “advocates for the interests of cannabis businesses of all sizes and promotes a safe, consumer-focused mari- juana industry in Arizona. We establish best practices and maintain a consistent legislative and regulatory presence to represent the industry effectively. Our goal is to recruit and retain responsible members who are committed to consumer protection and providing high- quality cannabis in Arizona.” For such a powerful entity, the ADA also is a relatively new one. According to its LinkedIn page, the organization was formed in 2009, a year before Arizona legalized medical marijuana. But it wasn’t until Arizonans voted to legalize recreational weed that the ADA became such a force in state politics. As a result, what was billed as an egali- tarian landscape for legal weed — high- lighted by the issuance of social equity licenses to dispensary owners in commu- nities adversely affected by marijuana criminalization — has instead become increasingly corporate. The ADA is the voice for the biggest and richest dispen- sary companies, successfully steering public policy in its favor. And the little guys often are drowned out. ‘They control all the dollars’ The state Department of Health Services controls weed licensing. But because big brands hold so many licenses, the ADA wields outsized power over how business is conducted in the state. When recreational weed was legal- ized in 2020, about 180 licenses were either sold or distributed by lottery, including the social equity licenses that were supposed to be reserved for people whose lives were damaged by old drug laws. Quickly, though, most of those licensees were bought out by the corpo- rate marijuana behemoths. By 2022, the top 10 dispensaries had consolidated control over half of the market, according to cannabis data tracker Headset. On top of consolidation, and because of it, the dispensaries rule the weed land- scape with an iron fist. Because the dispensaries control licenses, they make decisions on all business and can control who does what. If you want to become a cultivator, you need the approval of a dispensary. And to get approval, you have to shell out some serious cash. “(Cultivators) pay a fee every single month to a dispensary just for the right to operate their business under a license,” said Jon Udell, an attorney who works alongside Gunnigle at NORML. While fees recently have come down slightly, Udell said, the deals some culti- vators struck years ago require monthly payments between $30,000 and $50,000. That means some cultivators must pay dispensaries more than $500,000 a year to simply do business. That’s not the case in many other states with legal weed. “If you want to be a cultivator or a manufacturer in Oregon or Colorado or California, you go out and get a cultiva- tion or manufacturing license. Those don’t exist in Arizona,” Udell said. “We only have one type of license for medical and one for adult use.” As a result, smaller brands must go along to get along. One brand owner told New Times how his product was suddenly taken off dispensary shelves when it became clear that it would have been too difficult for corporate-backed products to compete with it. “They will try to squash or kick out anybody,” the brand owner said. “It’s never going to get better for the patients or the market. They don’t care because they control all the dollars.” Influence at the Capitol Now that the ADA is the nexus of power in the industry, it hasn’t been eager to surrender that position. Unsurprisingly, the ADA has become a force to be reckoned with at the Arizona State Capitol, battling to keep things the way they are or gain more power over adjacent markets. Like many industry powers looking to protect their interests, the ADA makes its presence felt at the Arizona Legislature by doling out money to party leaders and lawmakers. In August 2022, the group’s political action committee, Arizona Dispensaries Association PAC, gave $75,000 to the Republican Legislative Victory Fund and $50,000 to the Arizona Democratic Party. In the weeks before the elections that year, it gave $40,000 to a PAC run by Chad Campbell, who currently is Gov. Katie Hobbs’ chief of staff. ADA’s PAC also donated another $60,000 to the state Democratic Party and $20,000 to the Republican Committee in Legislative District 5, a district that Democrats won handily days later. In total, that’s about a quarter of a million dollars spent by the ADA before the 2022 election. Afterward, the ADA used its PAC to give $35,000 to PACs asso- ciated with Democrats and Hobbs. It also sent donations between $150 to $350 to 20 lawmakers. While the donations have skewed toward Democrats, the association doesn’t appear to give on an ideological basis. Instead, it seems the organization uses its contributions to win influence with as many lawmakers as possible. It would appear that influence peddling has worked. Lobbying against Wilmeth’s interstate commerce bill was the latest political punch thrown by the association since 2022. That year, the Arizona Republic reported on the group’s growing power and efforts to shoot down reforms such as instituting state-run contaminant testing and requiring dispen- saries to report their own testing to the Department of Republican state Rep. Justin Wilmeth attempted to pass a law allowing Arizona weed products to be sold in other states, but it met with opposition from the Arizona Dispensaries Association and went nowhere. (Photo by Gage Skidmore/Flickr/CC BY-SA 2.0) Julie Gunnigle, the legal director of Arizona’s chapter of the National Organization for the Reform of Marijuana Laws, said there’s “a culture of fear and silence” around the Arizona Dispensaries Association. (Photo by Ash Ponders) Flower Power from p 13 >> p16
