Debate put Ducey on defensive on Uber, Theranos

Gov. Doug Ducey (Photo by Gage Skidmore/Flickr)
Gov. Doug Ducey (Photo by Gage Skidmore/Flickr)

Incumbent Gov. Doug Ducey repeatedly throws around the phrase that Arizona is “open for business” as both a commercial for the state and as proof his policies are what’s driving the state economy.

But this week, in the second of two gubernatorial debates, Ducey found himself on the defensive for policies and laws he signed that ended up with the death of one pedestrian and thousands of Arizonans getting inaccurate blood test results.

And the governor’s claim that his policies have resulted in the Arizona economy doing so much better than surrounding states depends on what data are considered.

Ducey crows that since he took office in January 2015, the state has added about 242,000 private sector jobs. That does outstrip the 192,000 jobs added in the prior 43 months.

But at the height of the recession, the state’s jobless rate topped 11 percent. By the time Ducey took office, it already had fallen back to 6.4 percent. It’s now at 4.6 percent.

The governor uses the line that the last time the Arizona unemployment rate was this low “people were renting their videos from Blockbuster.”

For the record, that was in January 2008. Now just a single Blockbuster store remains in Oregon.

But the state appears to have settled into what could be a new normal, with that jobless rate having barely budged in the past year.

The unemployment figure also is higher than not just the national rate of 3.9 percent. But it also is higher than Utah, Nevada, Colorado — and even California whose regulation and tax policies Ducey repeatedly says is driving businesses to move to Arizona.

New Mexico’s rate matches Arizona.

And Arizona’s unemployment rate still remains a full point higher than its historic low of 3.6 percent in July 2007.

It isn’t just Ducey who is looking at the figures he wants.

During the debate, Democrat David Garcia claimed that at the end of 2017 Arizona’s rate of job growth was lower than surrounding states with the exception of New Mexico.

That’s true — as a snapshot of that period of time.

But there are more recent figures. And the latest report from the U.S. Bureau of Labor Statistics put Arizona’s current year-over-year job growth at 2.9 percent. While less Utah and Nevada have faster job growth, the Arizona numbers are better than California, Colorado and New Mexico.

There are some bright signs on the horizon.

Kiplinger Magazine predicts that job growth in Arizona this year will be the seventh fastest in the nation and that the jobless rate by the end of the year should hit 4.5 percent. And the writers credit “Arizona’s more flexible regulatory environment” as attractive to business.

In this March 20, 2018, photo provided by the National Transportation Safety Board, investigators examine a driverless Uber SUV that fatally struck a woman in Tempe, Ariz. The fatality prompted Uber to suspend all road-testing of such autos in the Phoenix area, Pittsburgh, San Francisco and Toronto. (National Transportation Safety Board via AP)
In this March 20, 2018, photo provided by the National Transportation Safety Board, investigators examine a driverless Uber SUV that fatally struck a woman in Tempe. (National Transportation Safety Board via AP)

U.S. News & World Report is a little less positive, putting Arizona at No. 14 in its list of the best states for growth. And USA Today lists Arizona at No. 24, citing the state’s high poverty rate and “below average educational attainment rates at both the high school and college level.”

That “flexible regulatory environment” has its own flip side.

Earlier this year a woman walking her bicycle across a dark Tempe street, away from an intersection, was struck and killed by an autonomous vehicle that Uber was testing. A video revealed the backup driver was watching a TV show.

Uber’s testing in Arizona was no accident. In fact it was directly related to the governor issuing an executive order in 2015 allowing designers of autonomous vehicles to begin testing them on Arizona roads with minimal state oversight and regulation. More to the point, Uber specifically moved its 16 test vehicles out of California in a high-profile move, complete with a photo-op for Ducey, because that state wanted the cars to be registered as test vehicle and have the company file various reports — things that Arizona did not demand.

Ducey said at the time that proves Arizona is friendlier for business than its neighbor to the west.

“The message today is Arizona’s open for business,” he said. “We’re welcoming this technology. We’re not pushing it out of our state.”

It took three more years for Ducey to actually issue some more specific safety rules, including that the vehicles have to comply with all traffic laws and the operator can be cited — even if the operator turns out to be the corporation that built the vehicle and there’s no one behind the wheel.

And only after the fatal accident did Ducey rescind Uber’s ability to test its cars in Arizona.

On Tuesday, the governor defended opening up the state to testing of autonomous vehicles, saying it needs to be seen through the lens of the larger goal of public safety.

“We lose over 800 Arizonans a year on our highways due to human error from drivers,” he said.

And the death of the pedestrian?

“What happened in that accident was tragic,” Ducey said. “But I want to see the 38,000 people that die in avoidable accidents across the United States, I want to see that problem solved.”

Then there’s Theranos.

In this April 6, 2015, photo, Gov. Doug Ducey hands a pen to Rep. Heather Carter, R- Cave Creek, after he signed legislation to make it easier for Theranos to market its services. Behind Ducey from left are Elizabeth Holmes, founder of Theranos, and Rep. Eric Meyer. (Photo by Howard Fischer/Capitol Media Services)
In this April 6, 2015, photo, Gov. Doug Ducey hands a pen to Rep. Heather Carter, R- Cave Creek, after he signed legislation to make it easier for Theranos to market its services. Behind Ducey from left are Elizabeth Holmes, founder of Theranos, and Rep. Eric Meyer. (Photo by Howard Fischer/Capitol Media Services)

In 2015, state lawmakers approved – and Ducey publicly signed – legislation to expand the kinds of laboratory tests that people can seek without a doctor’s recommendation. But the real point of the measure was to allow Theranos, which lobbied for approval, to market its unique method of doing accurate tests with just a minimal amount of blood.

Turns out the company’s claims were bogus, with Theranos subsequently admitting that more than 10 percent of the test results given to Arizonans by the company were “ultimately voided or corrected.”

Ducey chalked that up to “bad actors,” saying there ultimately was accountability – in the form of a consumer fraud lawsuit brought by Attorney General Mark Brnovich who got $4.6 million in refunds. And the company is now out of business.

But the governor was unapologetic for signing the legislation.

“We still want to be a welcoming place to medical innovations in the state of Arizona while protecting public health and public safety.”

And sometimes Ducey didn’t even bother to wait for legislation.

Shortly after taking office in 2015, Ducey fired the director of the Department of Weights and Measures.

The reason? Shawn Marquez had been enforcing laws regulating taxi cabs against Uber and Lyft. Those laws specifically require anyone transporting people for money to conduct background checks on drivers and have insurance coverage.

More to the point, Marquez told Ducey he intended to run a “sting” operation on the rideshare services as the Super Bowl was coming to Arizona.

Ducey did more than fire Marquez.

He appointed former House Speaker Andy Tobin to run the agency. And then Ducey, who acknowledged that the laws on offering rides for money actually applied to rideshare companies, told Tobin not to enforce those laws while legislators looked for a fix.

It actually took several more months of non-enforcement for lawmakers to actually approve a measure which provided parallel but somewhat different laws to govern the ridesharing services and the people who drive for them.

GOP lawmaker proposes slew of regulations on medical marijuana

This September 11, 2018, file photo shows a marijuana plant at in the coastal mountain range of San Luis Obispo, Calif. Arizona Attorney General Mark Brnovich has suggested the Legislature, instead of the voters, legalize recreational marijuana. (AP Photo/Richard Vogel, File)
(AP Photo/Richard Vogel, File)

Saying he doesn’t trust the industry, a top Senate Republican wants an outright ban on the use of certain chemicals on the marijuana that Arizonans smoke, eat or drink.

Majority Whip Sonny Borrelli said he appreciates that lawmakers last session finally approved a plan he has been pushing to require that there be testing of medical marijuana for pesticides, herbicides and other chemicals before the product can be sold to patients. That testing is supposed to start no later than Nov. 1, 2020.

But the Lake Havasu City lawmaker said there’s a flaw of sorts in the whole plan: how the standards for acceptable levels will be set by a special panel.

“The people that are involved in that board, they’re all in the industry,” he told Capitol Media Services. “So, basically, it’s the fox watching the hen house.”

That’s not exactly true. Half of the 12-member panel are industry representatives, with a seventh being the owner of an Arizona-based cannabis testing laboratory. But there also is a patient, a caregiver for a medical marijuana patient, a laboratory scientist, a health care provider and a representative of the Department of Public Safety.

Still, Borrelli said an outright ban on certain chemicals makes better sense than subjecting medical marijuana patients to a risk.


The legislation will get a fight from the Arizona Dispensaries Association.

“I’m not saying that a zero tolerance is unacceptable for some things,” said Pele Peacock Fischer, lobbyist for the organization. But she said that pretty much everything has at least trace levels of various chemicals. And Fischer said that’s why deciding what is and isn’t acceptable is best left to experts.

SB 1015 would maintain the testing requirement for everything from microbial contamination and heavy metals to pesticides, fungicides and residual solvents. But the new language would specifically ban the use of any pesticide at all except for those that the Federal Insecticide, Fungicide and Rodenticide Act say are so benign as to not require regulation at all.

That list of what is permissible includes things like castor oil, cinnamon oil, garlic, lemongrass oil, rosemary, sesame and white pepper.

Borrelli, in seeking to block other chemicals, has a specific product in mind: Eagle 20. It’s a fungicide. What it also is, the senator said, is prohibited for use on tobacco “because it’s a heavy carcinogen.”

“But there’s nothing to prevent them from using it in marijuana,” he said. And that, Borrelli said, is a problem as far as he’s concerned.

Rep. Sonny Borrelli, R-Lake Havasu City, said he and other veterans serving in the Arizona State Legislature know how challenging it can be to transition from the military to civilian life. (Cronkite News Service Photo by Jessica Boehm)
Sonny Borrelli. (Cronkite News Service Photo by Jessica Boehm)

“Can you imagine somebody who’s a cancer patient?” he said.

Cancer happens to be one of the conditions for which the 2010 voter-approved law allows a doctor to recommend the use of medical marijuana. That recommendation entitles the patient to a card issued by the Department of Health Services allowing them to purchase up to 2 1/2 ounces of the drug every two weeks.

“Now they’re going to be taking something that could possibly be making them sicker,” Borrelli said.

Nor is he confident that the process being set up to create standards is sufficient.

“Suppose that board that we put together this year comes up and says, ‘Well, you’re allowed to use Eagle 20 (in) a certain amount?”’ And Borrelli said he can see that happening, what with pressure from the operations that cultivate the drug.

“That anti-fungal pesticides are necessary because all these growth facilities are indoors,” he said. “So they want to be able to mitigate the mold that’s being put on the marijuana.”

Fischer said her organization supported the legislation approved earlier this year that requires testing. But she said it’s quite something else to simply decide that certain chemicals are strictly forbidden.

She also said that the panel is looking to standards that already exist in other states that have legalized marijuana. The key, she said, is balance.

“That group is looking to put together a testing regime that is extremely safe for patients but also something that works in the industry so the labs can meet the demand, dispensaries can make it,” Fischer said. “When you put any new standards in place it has to be able to be implementable.”

Anyway, she said, it’s necessary for the state to come up with standards for marijuana: There are none in federal law as possession of the drug remains a federal felony.

Fischer also said that there is a safeguard of sorts in the existing law that has the panel recommend standards for acceptable levels of other chemicals in marijuana. She said the Department of Health Services has ultimate review power over any standards recommended by committee members.

Opposition from the industry aside, Borrelli has a bit of a political hurdle to overcome to get approval for the outright ban.

Because the 2010 law was approved by voters, any alteration can be made only with a three-fourths vote of both the House and Senate. That means Borrelli’s bill needs bipartisan support: Republicans hold just 17 of the 30 seats in the Senate and 31 of 60 House seats.

More Changes

Borrelli has some other ideas of changes he said are needed in state regulation of medical marijuana.

SB 1016 and SB 1017, taken together, are designed to ensure the Department of Revenue has access to certain records of medical marijuana dispensaries.

The issue here, he said, is whether these dispensaries are collecting – and, more to the point, remitting – the state sales taxes they are supposed to be charging.

Under normal circumstances, Borrelli said, the tax-collecting agency can go in and look at the books of any business to be sure that what they’re reporting matches what’s actually being sold.

But that 2010 Arizona Medical Marijuana Act has very specific confidentiality provisions. And what that means, he said, is that the Arizona Department of Health Services, which monitors dispensaries and keeps close track of the number of ounces of marijuana each sells cannot share that information with the Department of Revenue.

“It’s about accountability,” Borrelli said.

He said the argument about legal use of marijuana has often been that it should be treated like alcohol.

In the case of bars, the senator said, the Department of Revenue can go in, check the inventory, check the purchase orders and pretty much figure out how much alcohol has been sold “to make sure that nobody’s cheating.”

But he said marijuana dispensaries can tell state tax officials that they have sold 200 pounds of the drug in that month. But if in fact they sold 2,000 pounds, the only people who know that are state health officials, who are statutorily precluded from sharing that information with the Department of Revenue.


Groundwater regulation new conflict in water management


Farmers and Gov. Doug Ducey say they are willing to change their stance against government oversight and regulation to protect the state’s dwindling water supply – and they’re willing to let the largest water users write the rules.

This shift in thinking comes as the Legislature convenes Jan. 13 and lawmakers will likely have to address what to do with a growing demand for water, just one year after they passed the Drought Contingency Plan, which doles out water from the Colorado River. 

Now, the new urgency is managing Arizona’s groundwater. 

In areas in Arizona where groundwater is unregulated, any landowner who can afford it can drill as much and as deep as they wish, take as much water as they want and are not required to report their usage to the state. But their water must be for a “beneficial use,” per statute, which includes agriculture.

But that usage in these areas, which sit outside of areas where groundwater usage is tracked and regulated, known as active management areas, has gone unchecked by the government for decades. Nobody knows exactly how much groundwater is left or how long it will last.

Doug Ducey
Doug Ducey

This growing problem is prompting discussion between water stakeholders in the Legislature and in those areas, who are working to ensure there is enough water to grow responsibly and sustainably for generations.

That, coupled with projected shortfalls in the Colorado River and longer, hotter and drier summers, people living in these areas are worried and are asking the government to step in.

The problem has caught the attention of Gov. Doug Ducey, who has cultivated a legacy as the deregulation governor. Ducey said he’s concerned about reports of a dwindling supply in these areas and is willing to approve regulations water users in these places want.

“I am open minded to regulations that protect and steward our water future,” Ducey said. “I’m concerned about some of the reports that we have received, and we’re working to provide the best possible policy going forward, both from the Arizona Department of Water Resources and the Bureau of Reclamation, and some of the decisions that they make on behalf of the state water management future.”

Ducey said late last year that “positive growth” in areas bring challenges to allocating water responsibly and that the situation is nuanced and Arizona’s water feeds agricultural products that ship around the world.

“Agriculture is a big industry,” Ducey said. “We have not only family farms, but we have people that come in with some corporate farming. If those products are exported to the benefit of Arizona, that’s one thing – water is different.”

His open mindedness takes the form of working closely with the Department of Water Resources and the establishment of the Governor’s Water Augmentation Innovation and Conservation Council following the passage of the Drought Contingency Plan in January 2019.

Through that and through several stakeholder committees organized by the Legislature, Ducey and lawmakers are letting people who use the most water in unregulated counties come up with solutions that work for them. Once those solutions are found, the state is expected to craft laws that will make implementing those processes, which build on long standing water policy, easier.

Enough Water

The state’s 1980 Groundwater Management Act was shepherded by former Gov. Bruce Babbitt and it restricted irrigation on new farmland in urban areas and required builders there to show a 100-year water supply before making new subdivisions, among other efficiency standards. Since its passage, it’s been trumpeted as a historic piece of policy that pushed the state to conserve water where it was growing the most: Phoenix, Prescott, Pinal, Tucson and Santa Cruz management areas.

Areas like La Paz County and Mohave County, which are currently being examined by Legislative committees, weren’t included at the time.

Sarah Porter, director of the Kyl Center for Water Policy at Arizona State University’s Morrison Institute, said that while she thinks there is enough water to go around, the real issue is about where the state is growing. 

She said the state should continue to grow where water supplies allow, like what the Groundwater Management Act intends.

‘Land of the free’

Managing that growth will have to be community-centric, Porter said, as some places might not be able to afford, or might not find feasible, more expensive solutions. Ducey and the Legislature say they are aiming to work with water stakeholders, usually powerful business interests, to hash out the hard work and set precedent for how other areas of the state facing similar problems should move forward.

Ducey said his staff is working with ADWR to find these solutions, which those involved in water stakeholder discussions say will differ by county because none of them use water the same way or take them from the same sources proportionately.

But for now, ADWR’s hands are tied because in order to suggest or implement any new regulation in these areas, it needs to document how much water these megafarms are taking and how much water is left. The department is working to provide a model to committees that study groundwater usage in Mohave and La Paz counties.

Regina Cobb
Regina Cobb

Those committees, which include members of local government, mining, farming, business and agriculture stakeholders, are chaired by Rep. Regina Cobb, R-Kingman, and Sen. Sonny Borrelli, R-Lake Havasu city. The groups, which do not include conservationists, plan to meet sometime during the 2020 legislative session to review ADWR’s data and again after the coming legislative session to suggest legislative fixes.

Cobb has said in the past that because these are the interests who use water the most in these communities, they, collectively, have conservation in mind. She characterized the committees as “kind of like DCP for groundwater in each of the communities.”

The committees will consider what residents and water stakeholders in those counties have already asked for: more regulation, expansions of active management areas, other irrigation non-expansion areas and to tax groundwater or to require everyone to meter usage and charge users accordingly.

Cobb said these counties have no real mechanism to regulate water usage and have become a target for hedge fund groups that effectively mine water.

“[Farmers] want to be the land of the free,” Cobb said. “The problem is now they see that by not having any restrictions at all, we have opened ourselves up to vulnerability – we’re vulnerable to all of the water mining companies coming in. So, when they’re looking at that, [farmers are] saying, ‘I want it open for me, but I don’t want it open for everybody.’”

House Minority Leader Charlene Fernandez, D-Yuma, said when she threw out the idea of metering wells at a community meeting “it wasn’t very popular.”

“People who own land believe the water rights belong to the property underneath,” she said.

Complicating any solution politically is the fact that one of the larger operations is using Arizona groundwater to grow hay to ship to Saudi Arabia to feed cattle there. In the meantime, some area residents report that their existing wells have gone dry, forcing them to drill even deeper.

“We have to stand up to that,” said Fernandez who has been one of the key legislative players in shaping Arizona water legislation. She said there should be some way to distinguish between families that live in the area and corporate farmers, “people who don’t have a vested interest in the area.”

“But who makes that decision?” she asked.

Capitol Media Services contributed to this report. 

House committee approves hairstyling bill

(Deposit Photos/Nemar)
(Deposit Photos/Nemar)

Concluding public safety would not be harmed, a House panel voted Monday to let people style and blow dry hair for money without first getting a license from the state.

HB 2011 would repeal a section of law which now requires at least 1,000 hours of training at a state-licensed school before someone can “dry, style, arrange, dress, curl, hot iron or shampoo and condition hair.” But licensing would remain in cases where there are “reactive chemicals to permanently straighten, curl or alter the structure of the hair.”

The 5-4 vote by the House Committee on Military, Veterans and Regulatory Affairs came over the objections of dozens of individual stylists who insisted that the public needs the kind of oversight that now occurs through the State Board of Cosmetology.

But it also came amid questions from committee members — all of whom are male — about exactly what is considered styling.

Rep. Michelle Ugenti-Rita (R-Scottsdale)
Rep. Michelle Ugenti-Rita (R-Scottsdale)

For example, answering a question from Rep. Noel Campbell, R-Prescott, Rep. Michelle Ugenti-Rita, R-Scottsdale said that includes things like using heated curling irons and flat irons. But she argued these are hardly tools that require special training.

“This is strictly blow-drying hair with tools you can get at Walgreen’s,” she said. That includes not only blow dryers but also curling irons and hairspray.

But Tracy Marrs, who said she owns three franchise salons, said it’s not a simple question of what devices unlicensed stylists could use.

“It’s more of who are we putting this really hot tool in the hands of,” she said, saying the styling irons can get as hot as 450 degrees.

Marrs argued that there is no problem with the licensing requirement, telling lawmakers it should not be repealed for people who are “just money hungry” and want to be able to hire people with less training who can be paid less.

And Kendall Ong, another salon owner, said trained people can recognize and deal with things like lice and infectious disease. He said allowing unlicensed people to handle hair creates “the possibility of a health crisis.”

But Anthony Dynar, who owns his own cosmetology salon, said it makes sense to allow him to have a shop with both licensed cosmetologists and unlicensed stylists. And he mocked the idea that somehow a person without 1,000 hours of formal training will spread disease.

“It does not take a license to know not to serve a client with lice or open sores,” he said.

Ugenti-Rita did not dispute that money is at least part of the issue.

“This will increase competition, drive down costs,” she said.

Committee members lined up for and against the bill along party lines.

Rep. Anthony Kern, R-Glendale, suggested the training requirement for something as simple as styling hair seems excessive. Kern said it requires just 585 hours of training to become a law enforcement officer.

And Rep. Mark Finchem, R-Oro Valley, said a line needs to be drawn as to what is appropriate state regulation and what is not.

“Are we going to regulate the sale of hair dryers?” he asked. “I fail to understand why the state of Arizona should be regulating something that we can each do for ourselves.”

But Rep. Eric Descheenie, D-Tuba City, said total deregulation makes no sense.

“This is a health care issue,” he said, with improperly trained people unable to spot and control scabies, lice and even the highly contagious and hard-to-treat MRSA virus. “Some of these things can take people’s lives.”

The measure now needs approval of the full House.

Politically motivated laws hurt women’s health, violate rights


Despite legislative efforts to the contrary, abortion is a constitutionally guaranteed right – even in Arizona. Yet in our state, opponents of abortion have been doing an end-run around the Constitution by passing politically motivated laws that have made it difficult or even impossible for women to access safe, legal abortion. These TRAP (Targeted Regulation of Abortion Provider) laws not only violate people’s constitutional rights, they put their health at risk.

Their effect has been dramatic: a 40 percent decline in health centers that provide abortion, leaving 80 percent of Arizona counties with no access to such health centers, and women waiting weeks for services. These medically unnecessary laws have essentially stripped abortion access from many women living in Navajo, Hopi, Hualapai and Apache tribal jurisdictions, among others, and rural women in other regions of the state who already face many barriers to accessing essential health care. In fact, there is only one abortion provider in the Northern part of the state, and that health center only provides medication abortion one day per week. Some people must travel up to 700 miles round trip to access services. Think about the burden of traveling hundreds of miles to access a safe and legal medical procedure.

Bryan Howard
Bryan Howard

Everyone should be able to access reproductive health care – including abortion – regardless of their zip code or economic status. That’s why Planned Parenthood of Arizona is in court challenging three aspects of Arizona’s TRAP laws:

  • An advanced practice clinician ban that prohibits qualified advanced practice clinicians, like nurse practitioners and physician assistants, from providing abortions and related care;
  • A mandatory delay and two-trip requirement that imposes needless barriers to health care, including requiring patients to visit clinics in person, twice, with a 24-hour mandatory delay between visits that, in practice, delays women far longer; and
  • A telemedicine ban that prevents access to early abortion services in remote areas.

Allowing qualified medical professionals to prescribe pills for abortion via telemedicine would expand access to women in underserved areas. Medication abortion has been available in the U.S. for many years and is extremely safe – the complication rate is less than one-half of one percent according to the Guttmacher Institute, whether provided in-person or by telemedicine. Telemedicine has been widely embraced in Arizona and across the nation as a high-quality health care option. In fact, the legislature has promoted the use of telemedicine to provide other health care services, including treatments for trauma, burns, cardiology, pulmonology, infectious diseases and neurologic diseases – even strokes. It’s politics that prevents advanced practice clinicians from providing abortion services.

The two-trip requirement is onerous and makes abortion unaffordable and inaccessible for too many Arizonans. Many of the people who seek abortion services are low-income and live at or below 150 percent of the federal poverty level. Low-income women face the most difficulty in paying for travel costs associated with two visits to a health center, rearranging inflexible work schedules at low-wage jobs, scheduling and paying for childcare and paying for abortion care.

The bottom line: There is no medical basis for these restrictions; they are designed to prevent people from accessing safe, legal abortion. It is the height of hypocrisy to pass these abortion restrictions as medical policies when they are in fact political attacks that endanger patients’ health.

Using politically motivated laws driven by uninformed opinions to regulate abortion providers hurts women’s health and decimates women’s rights. As a trusted, nonprofit health care provider, Planned Parenthood will not rest until every Arizonan has access to the full-range of reproductive health care services, including abortion. It’s time to take the politics and politicians out of women’s personal health decisions. Planned Parenthood of Arizona will continue to advocate for everyone’s health and rights, no matter what.


Bryan Howard is president and CEO of Planned Parenthood of Arizona.

State, marijuana industry push for better kitchen regulation

Deposit Photo
Deposit Photo

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.


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.

Cara Christ
Cara Christ

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.”


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.

Kevin White
Steve White

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.”


File photo of Rep. Sonny Borrelli, R-Lake Havasu City (Cronkite News Service Photo by Jessica Boehm)
File photo of Rep. Sonny Borrelli, R-Lake Havasu City (Cronkite News Service Photo by Jessica Boehm)

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.

Tobacco industry up to its old tricks again


I read with great interest the article in the May 1 edition of the Arizona Republic on current efforts by the tobacco industry in the Arizona Legislature to block effective clean air measures of city and local governments. The Arizona Hospital and Healthcare Association has a long and proud history of battling the tobacco industry on a variety of public health measures that affect all Arizonans. We are well schooled in the industry’s tactics and their long history of advancing the use of tobacco while masquerading as public health advocates.

As far back as 1994, AzHHA was the first in the country to sponsor a ballot initiative to increase the tax on tobacco and earmark the money for expanding access to health care.  As recently as 2006, we, along with the cancer, heart and lung organizations, sponsored the Smoke Free Arizona Act – landmark legislation that has dramatically reduced the prevalence of tobacco use in our state.

From the perspective of the tobacco industry, there is no bigger prize than the enactment of state-level measures that preempt efforts by cities and towns to enact their own tough clean air ordinances. This kind of state legislation represents the holy grail of tobacco industry objectives across the country, because tough local smoking ordinances are the most effective tool in reducing tobacco use over time.

What makes this effort by the tobacco industry more sinister is that they will give almost any ground to achieve this objective. They might agree to modest regulation of tobacco; they will agree to increase the minimum age for buying cigarettes; they will agree to most anything to achieve their primary goal:  PREEMPTION.

Fortunately, the Republic article accurately states that we have Arizona legislators who are wise to the tobacco industry’s game.  Sen. Heather Carter, R-Cave Creek, among others, correctly notes that SB1147 “is a Big Tobacco bill.” I’d take it a step further and tell you that, for the tobacco industry, SB1147 is a dream come true.

Over time, various polls have shown that the public is usually far ahead of the political establishment in seeing through the tobacco industry’s smokescreen of advancing their own interests while seeming to promote a “public health” measure. It’s gratifying to see that we now have legislators of both parties who can see these tobacco industry efforts for what they are:  an attempt to secure their future at the expense of public health.

Carter is to be applauded for taking a courageous stand against this latest ploy by the tobacco industry.  She deserves our support and our heartfelt thanks.

John Rivers is past president of the Arizona Hospital and Healthcare Association from 1986 to 2011.