As a renewed effort to legalize marijuana for recreational use in Arizona ramps up, substantial issues identified by state auditors still hover over the existing Medical Marijuana Program and solutions aren’t quite as clear as some might suggest.

Under the Arizona Medical Marijuana Act approved by voters in 2010, the state Department of Health Services is responsible for operating the state’s program. Industry insiders have given the department credit for its work on an industry that is still new, but a state audit released on June 19 was less than flattering.

Among the findings, auditors noted that state inspectors haven’t been inspecting “infusion kitchens” producing marijuana edibles for ongoing food safety compliance. Those kitchens are licensed as food establishments, which can be subject to unannounced inspections. But they’re typically housed within dispensaries, which are licensed separately, and state law does not allow DHS to inspect marijuana facilities without providing advance notice.

But whether the state’s failure to perform kitchen inspections is due to dubious business practices, bureaucratic malaise or something else entirely is not clear.

SERENDIPITOUS

DHS Director Cara Christ told the Arizona Capitol Times state inspectors tasked with enforcing the rules of AMMA have been unable to witness an operating kitchen to date.

Explaining why exactly seems to be as difficult as actually performing the inspections.

According to the audit, DHS “does not inspect infusion kitchens for ongoing food safety compliance because facilities typically close” when inspectors arrive for scheduled visits.

Christ said dispensaries have claimed the kitchens are simply not open.

And Arizona Dispensaries Association Executive Director Tim Sultan said, “It’s just serendipitous that they happen to be showing up and the lab’s not operational.”

The latter didn’t sound entirely implausible to Stacy Pearson, a campaign consultant working on a 2020 ballot measure to legalize marijuana for recreational use. The effort to usher in recreational marijuana at the ballot is expected to launch by the end of July.

Pearson said the infusion kitchens aren’t typically daily operations. They churn out pre-packaged marijuana edibles, like brownies and gummies, that have a shelf-life like any other mass-produced goodie. That means they don’t need to run all the time.

Still, she said figuring out a way to get dispensary inspectors into facilities when they’re operating shouldn’t be an issue  – it’s simply a matter of knowing the production schedule.

“The industry itself wants that to happen. That most certainly should be happening,” she said.

Steve White, the president of Harvest Health and Recreation and one of the movers behind the 2020 ballot initiative, agreed DHS should be able to inspect kitchens and contends they are. He said he knows a handful of operators whose kitchens have been inspected.

“They can come see ours if they want to,” White said, noting his kitchen would operate for just two days a month.

And White suspects that inspectors’ ability to do their job will become clearer. That’s because the state audit came at an unintentionally good time, Pearson said.

The campaign behind the 2020 initiative hopes to have the language circulating by the end of July, but it’s not yet complete. Pearson said that means they have time to “do better, to get better language.”

“We’re hoping to clarify some of that vague language from AMMA and give DHS all of the tools it needs and all of the authority it needs to solve any of the problems that came up in the audit,” she said.

That includes the authority DHS needs to inspect infusion kitchens

“There’s no reason that a kitchen that produces THC-infused products should be regulated any differently than a kitchen that produces sugar-infused products,” she said. “Whatever we need to do to clarify DHS’s authority on that, we’re open to doing that.”

SIMPLE SOLUTION

The audit made the solution sound simple. Auditors recommended DHS conduct unannounced food safety inspections of infusion kitchens similar to ones done for other licensed food establishments.

The current opinion of the state Attorney General’s Office has been that DHS cannot follow that recommendation without violating the law for dispensary inspections.

DHS would need explicit statutory authority to perform unannounced inspections, approval it could get from the Legislature with a three-fourths vote. The AMMA is shielded from legislative amendments under the Voter Protection Act.

White said that’s a broad proposal, but generally speaking, the industry is supportive of oversight.

“Of course, in theory, we would be supportive of that,” he said when asked specifically about unannounced kitchen visits.

And Sultan said his members would not stand in the way of such legislation, but would rather commit to complying with the rules whatever the government decides those might be.

Democratic lawmakers are on board, too.

House Minority Leader Charlene Fernandez, D-Yuma, said her caucus would happily help get the three-fourths vote necessary to close the loophole, noting that they supported new marijuana testing requirements, and don’t want to put medical marijuana patients’ health at risk as the audit suggested.

Christ actually pointed to the new testing rules as a potential solution in and of itself in an interview with Capitol Media Services.

Christ pointed out that a new law eventually will give her department the authority to inspect everything that’s being sold out of state-licensed dispensaries. And that includes not just the unprocessed leaves and flowers but anything made from those items, including those coming out of kitchens.

“I don’t know that it’s going to help us with the inspection piece, because it just doesn’t touch that,’’ she said. “But what it will do is allow for analysis of the product before it’s used.’’ And that, she said, is more than exists now.

White contested that point, too.

“Harvest Health and Recreation has spent millions of dollars on testing since the inception of the company. Most responsible operators do not sell untested products,” he said. “The issue is one of regulatory oversight rather than results-based analysis.”

REASONABLE NOTICE

For those keeping score: Democrats have said they’d support a bill to close the kitchen inspection loophole, while industry insiders have said they wouldn’t resist such legislation, and those working on a campaign to legalize marijuana for recreational use believe inspectors’ authority could be clarified in new language possibly bound for the 2020 ballot.

But that’s not enough to convince everyone there might be a path forward.

Sen. Sonny Borrelli, R-Lake Havasu City, remains among the skeptics.

Borrelli noted he already had a bill to close the inspection loophole.

Senate Bill 1222 would have removed language in the Medical Marijuana Act stating that the department must give “reasonable notice” before inspecting a dispensary. Instead, the bill would have required dispensaries be open to inspection during business hours. That bill would have applied to dispensaries themselves, not just the kitchens.

“The problem is that reasonable notice,” Borrelli said. “DHS can go into everything from a Burger King to an abortion clinic unannounced – but not a dispensary.”

And he was both outraged and dubious of Democrats’ and industry folks’ pledge to support a fix in the wake of the state audit, noting that when his proposal came up in the Senate, not one of them supported it.

“Democrats killed the bill,” he said. “The Medical Marijuana Act was written by the industry to protect the industry. … The industry was the one that blocked any kind of reform.”

That “maybe they won’t be obstructing any kind of medical marijuana reform” moving forward is good, he said, because he’ll be running his bill on unannounced dispensary inspections again.

And he scoffed at the idea that he might try instead to pass a watered down version focusing on kitchen inspections, for which there appears to be support.

He’s not actually convinced those who stood against his bills before won’t fight back, even if they’re now saying otherwise.

“They said they’re willing to learn and listen and work with somebody? Um, it took us three years to finally get some type of reform through,” Borrelli said, referring to the new marijuana testing requirements. “So, you know what? I’ll believe it when I see it.”

Howard Fischer of Capitol Media Services contributed to this report.