Denzel Mason was midway by means of his Friday shift as an assistant
supervisor at Phoenix Reduction Heart, a marijuana dispensary in southwest
Phoenix, when his telephone rang with the information. 

He had spent a lot of the day in April 2022 hustling between the
retail ground and his workplace within the adjoining suite, unable to tune into
the digital lottery drawing livestreamed by the Arizona Division of Well being Providers.

Mason meant to observe the drawing, however obtained referred to as to the gross sales ground to assist a buyer. 

Throughout city, a pc had randomly chosen 26 winners from amongst
1,301 purposes in search of one of many state’s extremely coveted social
fairness licenses—golden tickets that might, no less than in concept, permit
folks from communities excessively affected by previous marijuana legal guidelines to open dispensaries of their very own.

A kind of profitable purposes was Mason’s.

“I referred to as my mother and I used to be like, ‘I simply gained the lottery!’ She’s
like, ‘You gained the lottery?’ And I used to be like, ‘No, sure, however no,’’ he
recalled with a smile. 

It was six months earlier than that day when Mason, a then-25-year-old
Black man residing in South Phoenix, would study concerning the social fairness
program after answering a knock on the door of his good friend’s residence. He
discovered a flyer mendacity on the porch a couple of program referred to as Your Vibrant Horizon, a Copperstate Farms
initiative that invited folks from marginalized communities to companion
on an possession stake in Arizona’s marijuana business by means of the
social fairness program. 

“OWNING A DISPENSARY CAN BE MORE THAN A DREAM,” learn daring textual content on
Your Vibrant Horizon’s web site under a big picture of a smiling Black
man—a person that regarded like him.

The social fairness program was a part of Proposition 207,
handed by voters in 2020 to legalize leisure marijuana. To
take part, candidates needed to meet sure necessities involving
revenue stage, ZIP code and previous marijuana convictions. Prop. 207 additionally
outlined a path to expungement, permitting these with low-level marijuana
prices to seal their information and restore their civil rights. Every
social fairness applicant may submit two purposes.

This system was designed to “promote the possession and operation of
marijuana institutions and marijuana testing amenities by people
from communities disproportionately impacted by the enforcement of
earlier marijuana legal guidelines,” in response to Prop. 207.

However, lower than two years after its inception, 11 of the 26 social
fairness licenses at the moment are owned by Arizona’s company dispensaries, with
some bought at a fraction of their purported worth, an AZCIR overview of company filings, license purposes and outreach to dozens of social fairness candidates discovered. 

One other seven licenses are owned by a mixture of personal traders and
different Arizona dispensaries, with greater than half of these tied to a
string of shell LLCs that additional defend the general public from realizing who or
what entity is definitely benefiting from this system.

Among the many eight authentic lottery winners who nonetheless have an fairness
share of their license, company dispensaries have a stake in no less than
two of the companies. Each of them, together with Mason, at the moment are ensnared
in courtroom proceedings about who can do what and the way.

Essentially the most substantial barrier dealing with social fairness licensees is an
established business that has helped form Arizona’s leisure
marijuana program from its conception. From tens of millions in funding to get
the initiative on the poll to a imprecise define of social fairness in
Prop. 207, the business has wielded its affect all through the
multiyear course of to legalize marijuana. 

Consequently, some Arizona dispensaries have change into even wealthier,
partially by barring competitors, but additionally by securing further
licenses that had been alleged to uplift communities disproportionately
affected by the Warfare on Medicine. 

“The fact is cash buys affect. It additionally affords the chance
to rent skilled people to foyer on (company dispensaries’)
behalf, navigate the method and alter and remove competitors,” mentioned
Frederika McClary Easley, the director of strategic initiatives at The Individuals’s Ecosystem, which advocates for folks of colour, girls, the disabled and different marginalized teams inside the hashish business. 

Social fairness operators typically enter the hashish business years after
medical dispensaries had already constructed a loyal buyer base and
secured optimum areas, she defined. 

“Black and Latinx communities had been disparately impacted by the Warfare on
Medicine—severely impacted—and that’s people and communities. The
goal of social fairness applications needs to be to set intention to
acknowledge that hurt and set intention on repairing hurt,” McClary
Easley mentioned. “That may be for people who want to change into
entrepreneurs on this house and it also needs to embody the communities
which have been impacted for 40-plus years.”

Social fairness applications have popped up all through the nation as
states steadily legalize medical and leisure marijuana. However the
jury remains to be out on their efficacy.

Based on a 2022 report
by the Minority Hashish Enterprise Affiliation, Arizona fares higher in
some areas than others. Its $4,000 software charge, for instance, isn’t
the most affordable within the nation, nevertheless it’s additionally extra accessible than the tens
of 1000’s charged by different states. Arizona just isn’t among the many states
that provide charge waivers to eligible candidates, nonetheless, and it doesn’t
prolong technical help and funding to social fairness licensees, both.

“Of the 15 state social fairness applications, not one has resulted in an
equitable hashish business throughout all 4 pillars of fairness (business,
justice, group, and entry),” the report concludes.

Fairness for capital

For Mason, the flyer on his good friend’s porch represented the
alternative for an escape from a generational cycle of poverty and
hardship. Rising up in hardened neighborhoods of city Chicago, he and
his seven siblings typically bounced from one faculty to the following, as
eviction after eviction compelled his household to maneuver. At one level, state
officers positioned the youngsters in foster care after discovering medicine within the
household residence.

It wasn’t till Mason’s household relocated to South Phoenix that he
would discover some stability. After graduating from Cesar Chavez Excessive
Faculty in 2013, he labored his manner towards touchdown a job as a budtender at
a neighborhood marijuana dispensary in September 2019. 

To be an proprietor of such a enterprise, Mason recalled, could be precisely
the “dream” the Your Vibrant Horizon web site described. Whereas he met the
standards to qualify for the Arizona program, he was uncertain of learn how to
navigate the method on his personal.

Like different candidates who turned eligible as a result of their revenue was
lower than 400% of the federal poverty stage, Mason didn’t have $8,000 to
spend on two purposes for the license lottery. He noticed Your Vibrant
Horizon as a manner ahead, and utilized the following day.

“Lots of people went searching for investor companions,” defined Demitri Downing, the founder and president of Arizona’s Marijuana Business Commerce Affiliation.
“Some went to grandma, some went to dispensaries, some went to
clever traders from dispensaries, some went to their buddies.
‘Give me $4,000, I’m going to use, you personal this proportion.’” 

Marijuana business big Copperstate Farms ran the Your Vibrant
Horizon program, which promised a path to partnership with social fairness
license candidates, together with “monetary support” to assist defray
software prices. The company would assist candidates expunge any
marijuana-related legal information, and it might “…BUILD A BUSINESS
TOGETHER,” in response to this system web site, which featured a picture of a
pair of shaking palms, one Black and the opposite white. 

Utility charges are decrease in states like Arizona that choose social
fairness license holders by means of a lottery system, making the applying
course of extra accessible for decrease revenue people. 

However decrease charges additionally “make it simpler for highly-capitalized candidates
to submit extra purposes, thus growing their probabilities of acquiring
a license over people with out related entry to capital,” the
Minority Hashish Enterprise Affiliation report says.

In alternate for Copperstate’s companies, Mason agreed to surrender 49% possession of his license if his title was drawn. 

As Mason would quickly study, the partnership would value him a lot
extra—together with the power to make essential choices as the bulk
shareholder of his enterprise.

Betting large on profitable licenses

Previous to the lottery, dispensaries scoured neighborhoods like Mason’s
in search of companions. Billboards promising to assist eligible candidates
by means of the method popped up alongside Arizona freeways. Canvassers knocked
door to door in eligible ZIP codes. The identical neighborhoods acquired
flyers within the mail and on their entrance porches. Some dispensaries even
arrange expungement clinics to assist potential candidates clear earlier marijuana prices. 

On the floor, the hashish business’s involvement within the social
fairness program provided these eligible an opportunity to participate in a
burgeoning subject, which established dispensaries would assist them
navigate. The state’s program allowed social fairness candidates to
companion with traders, so long as the qualifying applicant owned at
least 51% of the enterprise. 

Current hashish companies took benefit of the rule by leveraging
their deep pockets:  Dispensaries had a stake in additional than a 3rd of
the 1,301 accomplished license purposes AZDHS acquired.

Copperstate Farms, which runs a 40-acre hashish greenhouse in
Snowflake and operates 5 Sol Flower dispensaries in Arizona,
submitted 106 purposes alongside its social fairness counterparts.
Mason represented two of them.

Mohave Hashish Co., with three Arizona dispensaries and operations in California, submitted 322 purposes. 

The Mint Hashish,
with 5 Arizona areas, 4 Michigan dispensaries, a Missouri
retailer and plans to develop to Illinois, Massachusetts and Nevada,
submitted 59 purposes.

Collectively, the three firms had been tied to 37% of all
purposes, every of which represented a $4,000 wager to share a bigger
slice of the worthwhile Mary Jane pie in Arizona. When the licenses had been
drawn by means of the April 2022 digital lottery, that wager appeared to pay
off. 

Mohave partnered with 5 of the 26 profitable purposes,
Copperstate with three and The Mint with two. Since then, eight of the
authentic social fairness recipients are not related to these
licenses. The 2 that stay, together with Mason, are embroiled in authorized
battles to carry on to what was alleged to be a life-changing
alternative.

Prop. 207 restricted the variety of marijuana dispensaries allowed to
function in Arizona: one dispensary for each 10 pharmacies. This restricted
construction made every license extraordinarily worthwhile. 

In 2021, for example, Illinois hashish firm Verano Holdings
purchased a Phoenix dispensary for $17 million. In December of that very same
yr, Curaleaf, an organization headquartered in New York with a presence in
23 states, acquired a dispensary in Safford, Arizona, for $13 million.

With 26 new social fairness licenses added to an already restricted
market, present dispensaries moved rapidly to safe much more of the
state’s thriving, billion-dollar hashish business.

“Sadly, the social fairness program is working as supposed by permitting
the business to seize further licenses whereas showing to help
social fairness,” mentioned Ok.M. Bell, a workers lawyer with the ACLU of
Arizona, a progressive nonprofit that focuses on systemic injustices. 

The ACLU of Arizona supported Prop. 207,
calling it “step one voters can take to start to restore the
many years of hurt that the Warfare on Medicine insurance policies have inflicted on folks
of colour.” Arizona’s Nationwide Group for the Reform of Marijuana
Legal guidelines (NORML) additionally backed the measure. 

However after voters handed the initiative, each teams introduced issues to AZDHS because it crafted this system. 

The ACLU of Arizona identified that lottery winners may
instantly switch their licenses to those that didn’t qualify for the
program. NORML requested AZDHS for funding for social fairness candidates, as
nicely as a approach to preserve the necessities each broad sufficient to accommodate
true social fairness candidates and slim sufficient that dispensaries would
be deterred from getting into this system. It additionally requested the creation of
a public-facing advisory committee
to evaluate this system’s success or failure. However Julie Gunnigle, the
authorized director at Arizona NORML, mentioned the request went nowhere.

Tom Herrmann, an AZDHS spokesman, insisted the company “made some key
modifications” to program guidelines based mostly on public suggestions collected through
in-person and digital classes. It required candidates to have lived in
Arizona for no less than three of the earlier 5 years, for example, and
raised the revenue cap from twice to 4 instances the federal poverty
restrict. 

Nonetheless, Gunnigle mentioned the social fairness program in the end empowered large dispensaries, one thing voters didn’t intend. 

“You possibly can see that in how lots of the greater gamers ended up
submitting lots of of purposes into that lottery and turning into
enterprise companions with so many individuals,” she mentioned.

Copperstate Farms and The Mint declined to remark for this story.
Mohave Hashish didn’t reply to repeated makes an attempt in search of remark. 

Authorized intervention and a looming deadline

Earlier than the lottery came about, Copperstate required that Mason signal
an working settlement to submit his software. He didn’t suppose to
have an lawyer look over the paperwork.

“They had been going to host some webinar however they had been like, ‘Signal the
doc earlier than the webinar and you may ask any questions. We’ll have
somebody there to reply questions,’” Mason recalled. 

Amongst different stipulations, the working settlement states that
“organizational bills of the Firm, together with with out limitation
the bills incurred regarding taking part within the Social Fairness
Program, shall be funded by Copperstate Farms, LLC and shall be handled
as a mortgage solely to the Firm and never the Members, secured by its
property.”

Mason thought this meant Copperstate would mortgage him the cash to discover a location, construct and open a retailer, he mentioned. 

After he gained the license, Copperstate provided him $2.4 million to
buy his possession share. The provide, in response to Downing, was
notably lower than the $7-9 million valuation the Marijuana Business
Commerce Affiliation claims every social fairness license is value.

Although Copperstate’s different two social fairness companions took the
buyouts, Mason was not thinking about promoting. As a substitute, he wished to
function the enterprise and make a optimistic influence on the encompassing
group.

“I didn’t actually have quite a lot of victories in life, so it is a win
for all the losses I’ve taken. And it is a win that may actually do
one thing, not only for me,” he mentioned.

So in July 2022, Copperstate requested Mason to signal a promissory be aware
and safety settlement to maneuver ahead with the dispensary. The be aware
acknowledged that Your Vibrant Horizon 192, the LLC owned by Mason and Your
Vibrant Horizon, owed Copperstate as much as $3 million.  

Greater than $800,000 would go towards a portion of what the corporate
spent to participate within the social fairness program—prices allegedly cut up
between Copperstate’s three social fairness licensees. Court docket paperwork
obtained by AZCIR
reveal that these expenditures included $566,000 in group outreach,
a $50,000 “workers success charge” and practically $180,000 in charges paid to AZDHS
as a part of the social fairness program. Different prices ranged from postage to
“authorities relations.” The rest was capital Copperstate predicted
it might have to spend to find and function a retailer. 

This time, Mason was hesitant to signal the paperwork with out an lawyer current. 

“I by no means remembered getting invoices or approving any cash that was
being spent,” Mason mentioned. “So it was just a little bit alarming for me,
as a result of it appeared like a big sum of money and I didn’t have a retailer
opened or actually a location or something.”

It was at this level that Mason realized he wanted a lawyer. After a
months-long search of potential corporations, he discovered Christopher Kaup and C
Reginald Davis.

In February, Your Vibrant Horizon filed a lawsuit towards Mason asking
that he be eliminated as supervisor of the corporate “for his refusal to
discharge his duties as a supervisor, which now threatens the corporate’s
survival.” AZDHS imposed an Oct. 8, 2023, deadline for social fairness
licensees to open their dispensaries, and Your Vibrant Horizon argued
that Mason’s refusal to adjust to the working settlement and signal the
promissory be aware threatened their probabilities of assembly it.

The courtroom dominated in Your Vibrant Horizon’s favor in Could.

Mason has since been eliminated because the supervisor of the enterprise, no less than
till the dispensary is open. Although he’s nonetheless the bulk proprietor of
the dispensary, which Copperstate is working to open in Pima County, his
voting rights have been briefly suspended, that means his approval is
not wanted for enterprise choices. 

Mason and his attorneys are evaluating their choices.

“This program was designed for me to have the ability to have a voice. And
taking away my voting proper, it simply doesn’t seem to be the chance
that I believed it might be,” Mason mentioned through the courtroom’s evidentiary
listening to. “I don’t actually perceive the purpose of my involvement if I
don’t have a voting proper. And I’ve no say in the way in which the dispensary
is operated or the way it seems to be. I simply have probably not been concerned in any
of that: budgeting, nothing.”