“Because statutes mean what they say, we conclude the two phrases do not have the same meaning and the two preschools at issue here are not ‘a public or private school’ under the Act.”

By Jim Small, Arizona Mirror

Medical marijuana dispensaries can operate in close proximity to preschools, the Arizona Court of Appeals ruled Thursday, reasoning that the voter-approved law legalizing medical cannabis differentiated between “schools” and “preschools.”

The ruling upholds a dispensary license that the Arizona Department of Health Services awarded in 2016 for the Phoenix neighborhood of Ahwatukee. The state agency, which regulates marijuana sales in the Grand Canyon State, reasoned that the law sets different rules for how close dispensaries can be to K-12 schools and preschools.

In a split opinion, the appellate court agreed.

“Because statutes mean what they say, we conclude the two phrases do not have the same meaning and the two preschools at issue here are not ‘a public or private school’ under the Act,” Chief Judge David Gass wrote for the two-judge majority.

The ruling stems from a legal challenge brought by 3SL Family LLC, a company that applied for a dispensary registration certificate in Ahwatukee in 2016. 3SL was one of several applicants vying for a single certificate in the area. But when the Department of Health Services awarded the dispensary license to a competitor whose proposed location was adjacent to two preschools, 3SL sued, arguing that the location violated the Arizona Medical Marijuana Act’s (AMMA) 500-foot buffer zone requirement for schools.

The AMMA, which voters approved in 2010, legalized medical marijuana in the state but included provisions to keep dispensaries away from schools. The law prohibits dispensaries from operating within 500 feet of any “public or private school.” However, the law’s language left room for interpretation regarding preschools, which were mentioned separately in the statutes.

The court’s opinion emphasized the distinction between schools and preschools in Arizona law, which it said “has long recognized schools are for school-aged children and not for younger preschool-aged children.”

“Nothing about those terms or their use suggests any ‘uncertainty’ about their relationship or ‘more than one rational interpretation’ of whether a ‘preschool’ fits within the Act’s concept of ‘schools,’” Gass wrote.

However, in a strong dissent, Judge Andrew Jacobs argued that the “plain language” of the Arizona Medical Marijuana Act makes it clear that preschools are schools.

“It would make no sense for the same drafting hand to separate preschoolers, grade schoolers, and high schoolers from marijuana in (one law)—only to allow the placement of dispensaries next to preschoolers in (another law) while separating them only from older schoolchildren.”

This decision could have far-reaching implications for Arizona’s medical marijuana industry. It potentially opens up more locations for dispensaries near preschools and childcare facilities, which could lead to increased competition and accessibility for patients. However, it also raises concerns about the proximity of marijuana businesses to very young children.

Jacobs raised that point, arguing that the restrictions on dispensary locations should be read together to protect all schoolchildren from exposure to marijuana, whether they are in preschool, elementary school or high school.

“Separating schoolchildren from medical marijuana growing, sale, and use is one means the voters chose to protect marijuana growers, sellers, and users from prosecution,” he wrote.

But Gass and Judge Brian Furuya said that interpretation of state law would undermine the ability of ADHS to issue licenses, and thus “adversely affect” the will of voters.

For 3SL Family LLC, the decision isn’t the end of a nearly eight-year legal battle. Jesse Callahan, one of the company’s attorneys, told the Arizona Mirror that an appeal to the Arizona Supreme Court will be forthcoming.

Although Arizona’s medical marijuana market thrived for a decade after voters created it, the passage in 2022 of legal recreational marijuana sales sparked a steep decline in the industry. When recreational sales began in January 2021, there were nearly 300,000 qualifying patients in Arizona’s original cannabis market, but there were fewer than 95,000 medical marijuana cardholders in July 2024.

This story was first published by Arizona Mirror.

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Photo courtesy of Philip Steffan.