Jul 222011

By Teri Walker–

With medical marijuana dispensaries on hold until lawmakers can decide if they’re in violation of federal law, pot clubs have been popping up around Arizona, bringing together card-carrying medical marijuana patients to share private supplies of marijuana. Now, these clubs are coming under legal scrutiny.

Late last week, the Arizona Department of Health Services (ADHS) asked the Arizona Attorney General’s Office to review the legality of so-called “cannabis clubs.”

“The information we have regarding these clubs suggests they are distributing marijuana to customers in a way that is inconsistent with the provisions of the Arizona Medical Marijuana Act (AMMA), and the persons involved could be conducting illegal marijuana transactions,” said ADHS Director Will Humble.

In November, Arizona voters approved Proposition 203, legalizing marijuana use for individuals with specific debilitating conditions. Since that time, nearly 5,700 Arizonans have become licensed medical marijuana cardholders.

As part of the new law, one marijuana dispensary would be allowed in each of Arizona’s 126 community health analysis areas, which are areas defined by ADHS to track public health statistics. A licensed medical marijuana patient could possess up to 2.5 ounces of marijuana obtained from a dispensary every 14 days.

If a person doesn’t live within 25 miles of a dispensary, Prop. 203 allows them to cultivate up to 12 plants for their personal use and to share with other cardholders. It is this caveat in the law that pot club organizers are pointing to as justification for their efforts.

Just before ADHS was set to begin issuing permits for dispensaries, U.S. Attorney for the District of Arizona Dennis Burke sent a letter threatening federal action against implementation of Arizona’s new law. He said anyone caught growing, distributing or possessing marijuana in any capacity, other than as part of a federally authorized research program, is in violation of federal law, regardless of state laws that purport to permit such activities. Burke warned pot growers and sellers could be prosecuted under federal drug-trafficking laws.

On May 24, Governor Jan Brewer asked Arizona Attorney General Tom Horne to file a lawsuit in response to Burke’s letter, asking a federal judge to determine the legality of Arizona’s new law.

Since dispensaries are not being allowed to open in the state pending the outcome of the lawsuit, some pot cardholders have decided to take matters into their own hands, contending the cannabis clubs can fill the void.

Typical club set ups include a host who requires an entry fee of varying amounts–say $50 to $75 for each visit. During the visit, members are given a “free sample” of pot. The clubs contend that as long as they’re not charging for the marijuana, they are not in violation of the law.

It is the legality of the manner of this “free” dispensing of pot that ADHS officials question. While the law states that patients and caregivers can share marijuana with other patients “if nothing of value is transferred in return,” those questioning the legality of pot clubs assert the pot samples are items of value transferred to the patient in return for an entry fee each visit; essentially, the entry fee pays for the drug.

At least seven pot clubs are openly advertising their programs around the state, but because the clubs are not regulated through zoning, sales tax or other licensing methods, it’s impossible to know exactly how many are in existence.

The investigation into the legality of the medical marijuana clubs is now in the hands of the Arizona Attorney General’s office. Results from this investigation and the federal judge’s assessment of the legality of Prop. 203 are pending.

In the meantime, Allan Sobol, the marketing agent who developed the business model for cannabis clubs, the 2811 Club, filed a complaint for declaratory judgment with Maricopa County Superior Court Monday, asking the court to review and establish the validity of the 2811 Club with respect to the AMMA.