ADHS Slow to Enact Changes to Address Misallocation of Medical Marijuana Funds

William Davis

According to a report issued by state auditors last month, the Arizona Department of Health Services (ADHS) has not yet implemented the necessary adjustments to the way it administers the state's medical marijuana fund that auditors advised three years ago.

In an update to its 2019 audit of ADHS's administration of the medical marijuana fund, the Arizona auditor general concluded that ADHS had been hesitant to make reforms that would address the improper use of monies for the department's employees.

While ADHS has largely complied with the recommendations made in 2019 (such as dealing with the prompt revocation of medical marijuana certifications for patients who broke the 2010 Arizona Medical Marijuana Act (AMMA); conducting inspections of medical marijuana facilities; and handling complaints and noncompliance issues), the department has yet to thoroughly audit its fee structure and deal with funding allocations for particular uses specified in cannabis legislation.

The same report states, “Specifically, we found that the Department paid some employee salaries from the Fund even though they worked on non-Program responsibilities during at least 1 of the pay periods we reviewed. Although the extent and impact of payroll expenditures being incorrectly allocated to the Fund is not known, incorrectly allocating expenditures further decreases available monies in the Fund for Program operations and other statutorily required or permitted uses, such as for statutorily authorized clinical trials and proficiency testing, which the Department has not yet allocated nor spent Fund monies on in fiscal year 2022.”

The report also talks about the lack of adjustment in the fee structure since the implementation of AMMA in 2011. “The Department also reported that it does not yet have enough information to determine whether Program fees should be modified due to recent changes that impact the Fund’s balance, such as the legalization of recreational marijuana and statutory requirements that have required the Department to transfer monies from the Fund for various purposes.”

Voters approved the AMMA in 2010, making medicinal marijuana usage legal in Arizona. Money in the medicinal marijuana fund is safeguarded since it was a voter initiative and can only be used for activities covered under the AMMA. According to the legislation, the money is mostly obtained through medical certification and dispensary license fees, as well as from fines and contributions.

Revenues for the Fiscal Year 2022 are anticipated to be at $12.4 million, but estimates for the Fiscal Year 2023 drop to $10 million. According to ADHS records, from 299,054 in January 2021 to 191,682 in May 2022, there were fewer patients who qualified for the medicinal marijuana program.

To help patients save money, ADHS adopted a rule in the middle of 2020 extending the validity of medical marijuana cards to two years. This change also had an impact on the fund's balance.

A 2021 legislation allocating $25 million over five years to marijuana research on the effectiveness of cannabis to treat pain and a variety of other conditions might place a significant burden on the fund.

According to Mike Robinette, executive director of the Arizona National Organization for the Reform of Marijuana Laws (AZNORML), when it is unclear how much money is in the fund, it might have an impact on the organization's legislative agenda.

He told the Arizona Mirror, “What happens when there is a lack of transparency is that it affects our ability to set our legislative agenda. One of the big things we tried to do this year was reduce card fees, but not knowing (how much is in) the fund makes it impossible.”

In six months, the auditor general's office will undertake another follow-up on the department's development.

Medical Marijuana in Arizona

Proposition 203, which received a majority of the vote on November 2, 2010, became Arizona's official medical marijuana proposal. On March 28, 2011, the ADHS completed the documentation for its patient register and dispensary. Patients and their carers were also able to apply for the MMP on April 14 and get protection from arrest under Schedule I rules.

A registered patient in Arizona may designate their caregiver to carry or possess marijuana on their behalf and may have up to 2.5 ounces of it in their possession. Additionally, according to Arizona marijuana legislation, a patient may grow up to 12 cannabis plants in their home if they live 25 miles (or more) from a dispensary.

Proposition 207 was approved by voters in Arizona with a 60 percent majority, ten years after medicinal marijuana usage became legal. On January 22, 2021, Arizona became one of the first states to implement its voter initiative. As a result, along with New Jersey, New York, and New Mexico, it became one of the representative states of nationwide normalization.

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William Davis is a CBD and MMJ enthusiast working with Quick Med Cards. He has been covering cannabis-related stories for many years and has been involved in educating readers about the potential benefits this tabooed plant can have.

Sheridan, WY
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