Pot next to a preschool? Your tax dollars are defending the state

Posted: Updated:
One of the 31 recently licensed locations in jeopardy is right next door to a preschool in Ahwatukee. (Source: 3TV) One of the 31 recently licensed locations in jeopardy is right next door to a preschool in Ahwatukee. (Source: 3TV)
Tony Chiarello applied to open a dispensary just east of the Deer Valley Airport. (Source: 3TV) Tony Chiarello applied to open a dispensary just east of the Deer Valley Airport. (Source: 3TV)
Chiarello said he’s willing to put more money on the line for the principle and for a fair shot to try and get the state to follow its own rules. (Source: 3TV) Chiarello said he’s willing to put more money on the line for the principle and for a fair shot to try and get the state to follow its own rules. (Source: 3TV)
PHOENIX (3TV/CBS 5) -

How did a shop right next door to a preschool get the green light to sell weed?

Medical marijuana industry insiders say something stinks with the latest batch of dispensary licenses issued by the Arizona Department of Health Services and taxpayers are now on the hook to defend the process in court.

The state is being sued, accused of dropping the ball on enforcing its own rules in the medical marijuana dispensary allocation.

A medical marijuana patient, believer and businessman Tony Chiarello applied to open a dispensary just east of the Deer Valley Airport.

"I just feel robbed!" Chiarello said.

He said he followed all the rules.

“It was just not a fair, level playing field,” he said.

[RELATED: Did DHS employee turned MMJ consultant have unfair advantage?]

His location easily met city and state distance requirements. It was well more than 500 feet from any homes or schools, 1,320 feet from any churches and a mile away from any other existing marijuana business.

What he didn't know when he applied is that the state was processing every incoming application, even the ones that didn't meet the minimum zoning requirements.

“They cheated a lot of people, and I don't think it was right,” Chiarello said.

That open application process not only made the state a lot of money, which was $5,000 a pop for 750 applications adds up to $3,750,000, Chiarello said it muddied the eligibility for the whole selection process.

And he's not the only one suing.

The state Department of Health Services is named in a dozen medical marijuana lawsuits right now. Three are challenging DHS’ allocation of the October dispensary licenses

[RELATED: Problems with Arizona's licensing process for medical marijuana dispensaries?]

Phoenix attorney Jimmy Cool of Honor Law Group filed an injunction on behalf of three clients,

“DHS has an obligation to enforce its own rules, and because they don't, it creates an unconstitutional and unfair system,” Cool said.

He is asking a judge to basically freeze the latest dispensary licenses and force DHS to start over from scratch with the allocation process.

“We've created a system where we award a license that's a rare and multi-million-dollar commodity to people based on a location that they know, and the state should know will never function,” he said.

One of the 31 recently licensed locations in jeopardy is right next door to a preschool in Ahwatukee.

DHS officials say that's OK because while state law mandates medical marijuana dispensaries have to be at least 500 feet from any school, they consider it nothing more than a day care for babies and toddlers.

[RELATED: Medical marijuana: Dispensary applicants ignore zoning ordinances]

The owners and managers at Grace Garden Christian Preschool said they wish the state had bothered to come survey them before signing-off on the property’s eligibility.

“That's pretty sad. We work with children six weeks old to 12 years of age,” said Catherine Thomson, the preschool director.

She said their curriculum is spelled out on their website, along with the fact they also serve school-aged kids.

The state says it doesn't count because those school-aged kids are only on campus in off hours like afterschool and summer months.

Tomson said that shouldn’t matter, and it’s just wrong.

“I'm pretty sure the parents will be quite upset,” Tomson said.

Even if the state fights and wins in court based on the technicality of the terminology and definition of school versus preschool, the shop next door still can't sell marijuana unless the City of Phoenix gives it the green light.

[RELATED: Hundreds apply for new Arizona pot dispensary licenses]

And Phoenix rules clearly state medical marijuana dispensaries must be at least 1,320 feet away from any school or preschool.

“I’m just like flabbergasted,” Tomson said.

Here's another way DHS appears to have ignored its own rules.

While the dispensary licenses were awarded to locations deemed to be the closest to the biggest patient clusters, the state says the recipients don't even have to open at that address.

“If we allow the winner to be a business that would never be able to operate at that location, we defeat the purpose of the entire system, and we harm patients,” Cool said.

Colby Bower with DHS is sympathetic but unapologetic.

"We're here to implement the law and execute it as best we can and so sometimes, that gets us in lawsuits," Bower said.

He said the state pretty much expects to be sued because DHS is beholden to the black and white of the voter initiative and law and the courts will have to define any gray areas of questionable interpretation.  

That means taxpayers will foot the bill for the legal fight either way.

“We created a system that would serve patients then did absolutely nothing to ensure that it would,” Cool said.

Chiarello is even more upset that he was sent a warning letter in the application process, given 10 days to comply or risk his paperwork being tossed out.

He needed notarized documentation from his business partner certifying that the property they applied with for the dispensary license was already properly zoned for medical marijuana.

“What’s the point? It didn’t matter. We were following the rules, and it really didn't matter,” Chiarello said.

Bower said DHS accepted any application as long as it was accompanied by a letter from the city zoning department itemizing the exemptions the applicant would need in order to come into compliance, no matter how seemingly unlikely.

“It's a big deal. I spent a lot, a lot of money trying to follow the rules,” said Chiarello.

Chiarello said he’s refusing to cash the state's refund check.

He figures he's already out more than $50,000 researching, surveying and locking in a location and city use permit to sell medical marijuana.

And here's the rub: winning in court won't automatically mean the license goes to whoever challenged the state.

Chiarello said he’s willing to put more money on the line for the principle and for a fair shot to try and get the state to follow its own rules.

“It just doesn't seem right, and I want to sit in front of a judge,” Chiarello said.

The judge will hear the state's motion to dismiss the case on Feb. 23.

The preschool is hosting a parent and community meeting at 6:30 p.m. on Friday, Feb.10, at Grace Christian, 10841 S. 48th St. in Phoenix. 

Copyright 2017 KPHO/KTVK (KPHO Broadcasting Corporation). All rights reserved.


  • Social Connect

  • Contact

    AZ Family

Nicole CritesNicole Crites anchors "Good Evening Arizona" weeknights 4 p.m.-6:30 p.m. on 3TV with Brandon Lee.

Click to learn more about Nicole.

Nicole Crites

The two- time Emmy award winner has been telling stories about Valley newsmakers and trends for more than a decade. Before joining 3TV's "Good Evening Arizona" team, she was the morning news anchor at KPHO-TV in Phoenix.

Nicole loves meeting new people every day and finding ways to bring context to news unfolding in our community and our world.

A wife and mother of two little ones, Nicole is always exploring Arizona to uncover exciting adventures to share. She grew up in a big family, one of six kids in Tucson.

She graduated from the University of Arizona. Work and early internships took her from Manhattan to Spokane, WA, back to Arizona, where she and her high school sweetheart settled to start a family.

Nicole loves to read and keep busy with community service and crafts, like quilting baby blankets, something her mom taught her in elementary school.  

Nicole's passion for storytelling and helping others is why she got into journalism.

She won an Emmy for her field anchoring of the deadly Tucson shooting and assassination attempt of then-Congresswoman Gabrielle Giffords and another for her KPHO "Keeping the Promise" series on military struggles and success profiles.

She is an active board member for the nonprofit, Military Assistance Mission, supporting our Arizona military, their families and wounded warriors.

She believes everyone has a story and says the most interesting people she has interviewed weren't the actors or politicians who've been guests on the show over the years, but the "ordinary" people you'd never guess have overcome extreme odds and are doing extraordinary things every day

If you have a story you’d like to share with Nicole, click here to email her.

Hide bio