Medical Licenses Stress Arizona Cannabis Market

February 29, 2016

For the first time since May 2012, the state will accept applications for medical-marijuana dispensary licenses this summer.

The announcement by the Department of Health Services comes as Arizona patients spent $215 million on 19 tons of medical pot last year, nearly double the 10 tons purchased in 2014.

Even with record-breaking sales, lawsuits filed by business partners alleging breach of contract, mishandling of funds and other corporate malfeasance hint at cracks in the industry’s foundation.

The lawsuits filed in Pima County and elsewhere in Arizona stem from a variety of root causes, industry insiders say, such as Arizona being one of the few states to use a lottery to award dispensary licenses or speculators bringing together a hodgepodge of ill-suited partners.

But others say lawsuits are bound to happen in a nascent industry, particularly one centered on a quasi-legal substance that is shut out of the normal financial world.

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