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Waltz Healing Center, Inc. v. Arizona Department of Health Services

Court of Appeals of Arizona, First Division

December 4, 2018

WALTZ HEALING CENTER, INC, Plaintiff/Appellant,
v.
ARIZONA DEPARTMENT OF HEALTH SERVICES, Defendant/Appellee.

          Appeal from the Superior Court in Maricopa County No. LC2017-000140-001 The Honorable Patricia A. Starr, Judge

          Barrett & Matura, PC, Scottsdale By Jeffrey Matura, Melissa J. England, Tabitha R. Myers Counsel for Plaintiff/Appellant

          Sherman & Howard, LLC, Phoenix By Gregory W. Falls, Matthew A. Hesketh Counsel for Defendant/Appellee

          Presiding Judge Diane M. Johnsen delivered the opinion of the Court, in which Judge Randall M. Howe and Judge Paul J. McMurdie joined.

          OPINION

          JOHNSEN, JUDGE:

         ¶1 The Arizona Department of Health Services denied an application for a medical marijuana dispensary registration certificate because the applicant failed to comply with a legal requirement to show that the dispensary's proposed location "is in compliance with" local zoning restrictions. The applicant appealed to the superior court, arguing it satisfied the requirement by submitting a four-year-old letter from the City of Tempe. The superior court affirmed the denial of the application, and we affirm the superior court's judgment.

         FACTS AND PROCEDURAL BACKGROUND

         ¶2 The Arizona Medical Marijuana Act limits the number of marijuana dispensaries across the state to not more than one per ten registered pharmacies. Ariz. Rev. Stat. ("A.R.S.") § 36-2804(C) (2018).[1] The Department first accepted dispensary registration applications and issued dispensary certificates in 2012. Waltz Healing Center, Inc. applied for a certificate then but did not receive one. The Department later determined it could issue 31 more certificates and opened another application process in July 2016.

         ¶3Under the law, dispensary certificate applications must contain certain information, including the physical address of the proposed dispensary, and:

[i]f the city, town or county in which the nonprofit medical marijuana dispensary would be located has enacted zoning restrictions, a sworn statement certifying that the registered nonprofit medical marijuana dispensary is in compliance with the restrictions.

A.R.S. § 36-2804(B)(1)(d). By regulation, applicants must comply with the zoning-documentation requirement by providing the following:

Documentation from the local jurisdiction where the dispensary's proposed physical address is located that:
a. There are no local zoning restrictions for the dispensary's location, or
b. The dispensary's location is in compliance with any local zoning restrictions.

Ariz. Admin. Code ("A.A.C.") R9-17-304(C)(6). See Compassionate Care Dispensary, Inc. v. Ariz. Dep't of Health Servs., 244 Ariz. 205, 213, ¶ 21 (App. 2018).

         ¶4 When the Department opened the 2016 application process, Waltz submitted an application for a service area located in Tempe. With its application, Waltz submitted a letter dated May 8, 2012, from a senior planner in the Tempe Community Development Department, Planning Division. The letter, which was on City letterhead, stated in relevant part:

For the purpose of zoning clearance, the City of Tempe . . . has determined the site . . . is in compliance with the Zoning and Development Code . . . for a ...

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