Payson Ponders Rules For Pot Dispensaries

Ordinance would limit medical marijuana outlet to industrial area as an alternative to having everyone grow

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The Payson Town Council last week took the first step toward allowing a medical marijuana dispensary in town, with the first reading of an ordinance to limit the operations to industrial and certain commercial areas.

And at least one local group that hopes to operate a dispensary in Payson showed up at the meeting.

Bear Sherfey said he and several other investors hope to apply for a license from the state in March and open up a dispensary in an empty warehouse near the airport where he wants to grow marijuana for patients with a prescription from a doctor.

Voters approved the medical marijuana law in November by a roughly 4,400-vote margin. The law provides for at least one dispensary in each county. If there’s no dispensary within 25 miles, people with a medical marijuana card can grow up to 12 plants for their own use. Caregivers can grow marijuana for up to five clients.

The possibility that many people could end up growing their own all over Rim Country if there’s no dispensary in Payson prompted the council to draw up regulations that would welcome a dispensary — but place it away from schools and homes.

“It’s not clear how this is all going to flush out,” said Town Attorney Tim Wright, who attended a four-hour briefing last week given by the state department of health services (DHS).

“But it’s better to have one or two dispensaries than to have everyone growing marijuana in their house.”

Payson Mayor Kenny Evans said “this is a major concern for a lot of us.”

Sherfey said he’s seeking other investors, but has already made a deal to rent a windowless warehouse in the industrial park near the airport, where he can grow and dispense medical marijuana — providing he wins one of the limited number of licenses the state will hand out in April.

The state department of health services hasn’t yet determined how to allocate the licenses. The initiative limited the number of dispensaries to 10 percent of the pharmacies in the state, with at least one in each county. But it’s unclear whether the state would approve more than one dispensary in Gila County, given the population densities. Therefore, dispensaries in Globe and Payson might end up competing for the single license allocated to the county.

Sherfey, a former motorcycle mechanic and customizer from Washington state, said he plans to build a cultivation facility if he can get one of the licenses. The initiative requires the dispensaries to grow at least 70 percent of the pot they sell, with the rest coming from other licensed dispensaries, which must operate as nonprofit businesses. Some backers of the initiative have criticized this rule, saying it will create a shortage — especially in rural areas.

Sherfey said, “so far everyone we’ve been to (at DHS and the town) have been very positive. Having one spot (where it’s grown) would be better then letting the whole town grow 12 plants each.”

Sherfey noted the facility has “no windows, all sheet metal in an industrial area. We’re nowhere near any residences. We can make a lot of money, but we can’t keep it — we have to give it away,” since the dispensaries must operate as nonprofits.

The state has tried to draft regulations that will limit the number of people who can qualify for a medical marijuana card. In California, critics said that loose regulation led to a proliferation of the number of people who could qualify for medical marijuana.

DHS has proposed relatively tough rules that would require a prescription from a doctor who had seen a patient at least four times for a debilitating condition and who assumes primary responsibility for treating that condition. This provision would avoid the experience of other states where some doctors dispensed prescriptions freely, without an ongoing relationship with the patient. DHS estimates that this provision will reduce the number of people who can qualify from 100,000 to about 20,000 statewide.

The draft regulations would require patients to pay $150 for an identification card. In other states, the cost of the medical marijuana ended up being close to the street value of the drug obtained illegally. The law would allow cardholders to buy 2.5 ounces every two weeks.

Many key questions remain unresolved, including whether the state will establish a tax on sales — a lucrative source of state revenue in other states.

“The grapevine has it that the Legislature will take that question up quickly,” said Wright.

The initiative bars driving while under the influence, but the state has no laws to provide a blood test to determine when someone is under the influence.

Officers would therefore have to testify as to the person’s behavior, which would make conviction more difficult than having an agreed test that linked levels of the drug in the blood to impairment. Marijuana remains detectable in the system for days or weeks after a person smokes, but so far no equivalent to a Breathalyzer or blood-alcohol test exists to determine whether someone had taken in enough of the drug to affect their driving.

The dispensaries will also face some additional problems, since marijuana remains illegal under federal law. For instance, federally regulated banks won’t let dispensaries set up accounts. In other states, that has compelled many dispensaries to keep large amounts of cash on hand — making them a target for criminals.

Moreover, the regulation of the growing process remains unclear, since normal federal pesticide and crop standards don’t apply to a substance that remains illegal under federal law. That state might have to draft its own regulations and provide its own inspections on that front — or leave the cultivation operations essentially unregulated. California found samples suggesting (the dispensaries) were using DDT,” said Wright.

“It’s hard to show it’s a safe food product when the federal government says it’s not.”

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