After Court Ruling, Uncertainty Looms Over Arizona Medical Marijuana Industry

By Will Stone
Published: Wednesday, September 19, 2018 - 11:41am
Updated: Tuesday, October 23, 2018 - 7:31pm

Arizona may have a booming medical marijuana industry. But a recent court ruling could jeopardize one of the fastest growing products — cannabis oil. The case is expected to reach the state's highest court. And it's revealing how the industry is still struggling to find legitimacy, even as more people than ever use marijuana.

Arizona may have a booming medical marijuana industry. But a recent court ruling could jeopardize one of the fastest growing products — cannabis oil. The case is expected to reach the state's highest court. And it's revealing how the industry is still struggling to find legitimacy, even as more people than ever use marijuana.

Arizona’s medical marijuana patients are on notice. That’s after a court ruled many of them could be breaking the law.

The legal fight centers on whether marijuana extracts — an ingredient in some of the most popular products — are protected by Arizona’s medical marijuana law.

It’s a decision that threatens to upend a multi-million dollar industry and thousands of patients' lives.

Part 1: Concern And Confusion | Part 2: One Man's Arrest | Part 3: Dispensaries, Patients In Limbo

Medical Marijuana Patients In Limbo After Court Ruling

Jessica Crozier was running out of options for her daughter when she turned to medical marijuana.

“At that time, the doctor wanted to discuss brain surgery and we were not up for that,” Crozier remembers.

Her daughter, Emma, has suffered from seizures since she was two years old. At first, Crozier was skeptical. She had even voted against Arizona’s legalization of medical marijuana in 2010.

“We had some friends who said you should think about cannabis for seizures. I had not even heard of that,” Crozier said.

Crozier did her own research. Soon, Emma was one of the first pediatric patients in Arizona’s newly minted medical marijuana program.

She went two years without a seizure, and that wasn’t the only change her mother noticed.

Jessica Crozier and daughter, Emma
Will Stone/KJZZ
Jessica Crozier’s daughter, Emma, takes medical marijuana for her seizure disorder. The 14-year-old from Scottsdale uses cannabis oil, containing CBD, after a seizure, but a recent court ruling found those products are illegal.

“It really helped with her mood, her cognitive functioning,” she said. “We weren’t expecting that.”

Crozier now works in the industry, helping other families navigate the sometimes overwhelming world of medical marijuana. Her daughter, who is 14 years old, is doing well and her seizures only come once every few weeks. After they happen, Crozier puts a few drops of cannabis oil under Emma’s tongue.

It eases her headaches and helps her recover.

“She might not be able to swallow a pill at that point,” Crozier said.

Crozier bought this tincture at a dispensary with a valid medical marijuana card.

But what she’s doing could be illegal in Arizona.

In June, the Arizona Court of Appeals ruled that cannabis extracts don’t count as medical marijuana. It’s a decision that could have enormous consequences for the state’s nearly 180,000 medical marijuana patients.

Crozier wonders what will happen if they disappear.

“How are people supposed to take this medicine if we only have flower in the state? What are they supposed to do with that?”

What Are Extracts?

Cannabis extracts come from the resin stored in tiny, crystalline structures called trichomes, which are most densely clustered on the plant’s flowers. Those store the active ingredients in marijuana, cannabinoids — what gives the plant its pharmaceutical properties.

Using a chemical process like the food industry, the trichomes are extracted from the plant’s flowers to create a concentrated substance that can go into everything from edibles to topical rubs.

“Many people either cannot inhale the dried herb or flower or it’s contraindicated because of a health condition.”
— Dr. Carlos Santo, naturopathic physician

It's estimated about 40 percent of what’s sold in dispensaries contains extracts, although the state doesn’t track this number specifically.

Some extracts contain high concentrations of CBD — the non-psychoactive cannabinoid often used to treat pain or seizures like Emma’s. The Food and Drug Administration recently approved a medicine made from purified CBD for two forms of epilepsy.

Other extracts can deliver strong doses of THC, the psychoactive ingredient that gets people high. The appeals court ruling specifically dealt with that kind of extract, but the logic used by the judges could be applied to any extract.

“Many people either cannot inhale the dried herb or flower or it’s contraindicated because of a health condition,” said Dr. Carlos Santo, a naturopathic physician with a medical marijuana practice in Scottsdale.

He sees patients everyday who need extracts — from a 3-year-old with kidney cancer to a 95-year-old.

It’s ironic, Santo says, that extracts could be excluded. After all, they let patients use marijuana in a much more precise way.

“You need to know how many milligrams of what you are taking, you cannot measure that by smoking a joint,” Santo said.

This is especially true for patients who only want the pain relief that comes from CBD.

He says the court’s decision, if upheld, would be “devastating”

“It’s just the strangest thing,” Santo said. “They are splitting hairs.”

Santo is troubled by the ruling, but he isn’t advising his patients to do anything differently.

Cannabis Clash Coming To The State Supreme Court

The dispute is likely headed to the Arizona Supreme Court.

Robert Mandel
Will Stone/KJZZ
Attorney Robert Mandel is asking the Arizona Supreme Court to overturn a ruling that criminalizes the possession of cannabis extracts, which are sold in medical marijuana dispensaries throughout Arizona.

“Clearly there’s a lot at stake here,” said attorney Robert Mandel who has asked the high court to overturn the case.

“To find that the use, possession and production of these materials have always been criminal will place a lot of patients in a very bad situation,” Mandel said.

The legal fight hinges on whether Arizona’s medical marijuana law covers extracts. Many in the industry have assumed it does, and these products have been regulated and sold in Arizona dispensaries for years.

But the medical marijuana law does not explicitly mention extracts.

Mandel says they clearly fall under the law’s definition of marijuana, which reads “all parts of any plant of the genus cannabis.”

“To think otherwise would be to sort of pretend that you could distinguish between an orange and its juice, which is really rather absurd,” Mandel said.

It’s a distinction, however, that Arizona’s criminal code does make. In fact, state law assigns an even more severe penalty for “resin extracted from any part of the plant” than for marijuana flower. The state’s high court defined this as “hashish” in the early 1970s.

Citing that case, the appeals court found the criminal statute still applies to extracts.

“There is ... no clear and unequivocal language immunizing hashish” in Arizona’s voter approved medical marijuana law, the majority wrote.

It goes on to say “we cannot conclude that Arizona voters intended to do so.”

In other words, the protections for medical marijuana patients fall away and the criminal statute applies to anyone using extracts. That means patients, dispensary owners, manufacturers are all effectively committing a felony.

“It seems implausible that the intent of the electorate was that the only way the medication can be administered to them is by smoking a joint,” Mandel said.

Mandel argues the voter-approved law didn’t ignore the criminal definition of hashish, but carefully redefined marijuana in a much more expansive way.

Many cannabis lawyers and even some lower courts support this interpretation. One of the judges on the appeals court did, too.

In his dissent, he wrote that the definition of medical marijuana “clearly encompasses all forms “of the marijuana plant, including its resin, and is consistent with the spirit and purpose” of Arizona’s Medical Marijuana Act (AMMA).

But for now, the majority opinion takes precedence, leaving patients in an uneasy legal limbo — do they risk arrest by purchasing a product that remains on most store shelves?

So far, that doesn’t seem to be the case in much of Arizona.

Maricopa County’s top prosecutor is not pursuing these cases until the matter is resolved, according to a statement from his office.

The Arizona Attorney General hasn’t offered any public guidance to law enforcement or prosecutors about the matter. It’s unclear if anyone has been arrested and prosecuted based solely on the recent decision.

Attorney Laura Bianchi is taking a similar approach.

Laura Bianchi
Will Stone/KJZZ
Laura Bianchi heads the Cannabis Division at the Scottsdale-based Rose Law Group. She says most dispensaries are still carrying products made from cannabis oil, despite a recent ruling that found they were illegal.

Bianchi, a partner at the Rose Law Group, believes the appeals court got it wrong and the ruling will be overturned.

“It’s certainly something to be cautious of, in my opinion, it unfortunately has a much bigger effect on patients,” said Bianchi who represents dispensaries and others in the industry.

“But I won’t play into the dramatics that I really believe the other side wanted to create,” Bianchi said.

Bianchi sees this as one more effort to fluster the medical marijuana industry. She cites a ruling from Maricopa County Superior Court in 2014 that found extracts were protected.

So far, the Arizona Department of Health Services — the agency that actually runs the medical marijuana program — hasn’t told dispensaries to do anything differently.

“And until that changes, I don’t see any reason to change how we operate,” Bianchi said.

But she says patients still have to decide what risk they’re willing to take.

“It find it extremely unsettling that anyone would try to go after the patients especially in a medical community,” Bianchi said.

This isn’t hypothetical.

It’s actually how the case began when a patient named Rodney Jones was caught with a jar of marijuana oil in Yavapai County, a rural swath of northern Arizona.

His attorney is now Robert Mandel — the one appealing the case.

“He was certainly acting, at least in his view, according to the rules,” Mandel says.

It’s a view that ultimately landed Jones in prison.

Part 1: Concern And Confusion | Part 2: One Man's Arrest | Part 3: Dispensaries, Patients In Limbo

How One Man’s Arrest Could Derail Medical Marijuana In Arizona

Even as Rodney Jones was being sentenced to prison, the judge wasn’t quite sure what to make of his case.

“Again, Mr. Jones, like everyone else I don’t know what the answer is,” Yavapai County Superior Court Judge Tina R. Ainley told the young man who had been arrested on drug charges three years earlier.

Except that narcotic was a small amount of marijuana oil in a jar. And Rodney Jones had a medical marijuana card.

His lawyer would be appealing the decision and that “may end up being set aside,” the judge said. “I don’t know.”

Rodney Jones had picked up the cannabis oil at a state licensed dispensary.

jones court clip
Court document

“He was certainly acting, at least in his view, according to the rules,” said attorney Robert Mandel who is now appealing Jones’ case to the Arizona Supreme Court.

Rodney Jones was sentenced to 2 1/2 years for the narcotic and another year for the drug paraphernalia — the jar. The 26-year-old received credit for time already served and is out of prison. But he had stumbled upon a legal fight that could now upend the state’s medical marijuana industry: Do cannabis extracts — made from the plant’s resin — count as medical marijuana in Arizona?

In places like Yavapai County, some patients have discovered it does not.

Rodney Jones Not The Only Patient To Face Prosecution

“So you had possession of something that you had purchased at a dispensary?” Judge Glenn A. Savona asked a woman appearing in Prescott Justice Court earlier this year.

“With a valid medical marijuana card?”

“Yes,” she replied.

Police had pulled her over a few months earlier and found a vape pen with cannabis oil, according to courts records obtained by KJZZ.

Court document clip
Court document

She was pleading guilty to possession of drug paraphernalia, a misdemeanor.

Eventually the prosecutor interjects.

“The issue is that she had marijuana wax which is a narcotic drug and not covered by the Arizona Medical Marijuana Act,” he told the judge.

The judge asked if the dispensary was also being prosecuted.

“No,” she replied.

“I wouldn’t say that is exactly true. It is something that is ongoing at this time,” the prosecutor said.

He explained the woman had felony charges filed against her, but the Yavapai County Attorney’s Office is giving her the opportunity to plead guilty to a misdemeanor because of her nonexistent criminal history.

Eventually, she takes the plea.

An hour later, another man — also a medical marijuana card holder — is called up on the same charges.

His crime?

“It was a wax container … wax I just bought from the clinic,” the man told the judge. “I was unaware that wax, you know, I don’t know.”

He later took the plea deal, too.

court documents
Court documents

Ripple Effects Of A Ruling

Jared Keenan, a former public defender in Yavapai County, says these are not isolated events.

“They routinely go after qualifying patients who use marijuana extracts,” said Keenan who now works for the American Civil Liberties Union.

“Threatening people with serious felony charges for possessing something they purchased from a state licensed dispensary is really not the way the plea system is supposed to be working,” he said.

Keenan worries medical marijuana card holders facing prosecution for cannabis “wax” — what’s considered “hashish” under Arizona’s criminal code — could become a reality across the state.

In a 2-1 decision, the Arizona Court of Appeals recently upheld the conviction of Rodney Jones and raised the specter of thousands of patients facing a similar fate.

“Patients need to be really, really cautious,” Keenan says. “Theoretically, any patient using any form of marijuana other than the leafy flower that you smoke could be subject to felony charges.”

This crackdown isn’t happening yet in Maricopa County, according to the Maricopa County Attorney’s Office. It’s waiting to hear from the state’s high court “before initiating any prosecutions of these cases.”

Likewise, state health officials haven’t told dispensaries to stop carrying the products.

The Arizona Attorney General hasn’t publicly given law enforcement any new direction, either. But the ruling effectively opens the door to a policy that seemed like an outlier to many in the industry.

County Attorney Says The Law Is On Her Side

Keenan isn’t surprised the case began in this rural county — home to one of Arizona’s staunchest foes of marijuana, Yavapai County Attorney Sheila Polk.

yavapai county court
Will Stone/KJZZ
The Yavapai County Criminal Justice and Detention Center in Prescott, Arizona.

“As a public defender, I used to joke with medical marijuana patients that they should probably just stay out of the county,” he said.

Polk and her advocacy group, Arizonans for Responsible Drug Policy, fought the legalization of recreational marijuana in Arizona two years ago.

She says her office has always prosecuted people for cannabis oil, which goes into many of the popular products sold at dispensaries like edibles and vape pens.

“I don’t know where the source of confusion would come,” Polk said. “We have a court of appeals decision, which is clear. There hasn't been a change here in how we do business.”

Polk’s argument against extracts hinges on the fact that Arizona’s voter-approved medical marijuana law doesn’t explicitly mention them. But the criminal code does, and it even assigns a harsher penalty for cannabis oil than marijuana flower.

Many lawyers in the medical marijuana industry strenuously disagree with this argument. So have some lower courts in other parts of the state. But Polk says this omission clearly indicates voters did not want these extracts when they passed medical marijuana in 2010.

“They weren’t contemplating that manufacturers would be extracting one chemical from that marijuana plant to make this mind-blowing product that is addictive,” she said.

Polk is specifically referring to products with high concentrations of THC, the psychoactive cannabinoid, but not the other compound, CBD, which is used to treat conditions like epilepsy or chronic pain.

She says it’s not clear those products are illegal for medical marijuana patients.

“There’s a deliberate muddying of the waters between CBD and THC in light of the Jones’ decision because that’s where you can get some public sympathy,” Polk said.

She says that recent ruling “only deals with THC” and compares it to the difference between morphine and heroin.

“That’s an example of how from the plant, you can extract something that can have medicinal use, but you can also extract something that is terribly destructive, which is the heroin.”

Polk says it’s her policy not to prosecute CBD cases.

“I am not aware of any prosecution in the state for CBD,” she said.

But the woman who appeared in Prescott Justice Court earlier this year told the judge she had CBD, according to the court record.

Polk told KJZZ she would look into the case.

Biologist Says Court Ignored Science

Plant biologist Hope Jones, who holds a doctorate in molecular and cellular biology and who is unrelated to Rodney Jones, says the concern about the potency of cannabis misses the whole point of medical marijuana.

“The point is to come up with something in a personalized way that works for us. And it might not be a baby aspirin. It might be an Advil,” she said.

Hope Jones is a consultant for cannabis growers in Arizona and runs a company called Emergent Cannabis Sciences.

She says the appeals court did not seem to distinguish between the different kinds of extracts, all of which come from the plant’s resin.

“There is no wording … that differentiates if their finding is specific to THC or CBD,” she said.

The court opinion stated that cannabis oil is “distinguishable from the green leafy substance commonly referred to as marijuana” and “widely recognized as ‘the resin extracted'” from the plant.

But Hope Jones said this characterization misunderstand the anatomy of the plant.

“The resin is a part of the flower. You don’t make resin by just separating something from the flower and processing resin,” she said.

illustration on trichomes
Dale Garrison

That resin contains the plant’s active ingredients, which are sequestered in small crystals, called trichomes. Those structures are most densely clustered in the flower, but are found in much of the plant.

Manufacturers use chemical extraction to produce a concentrated form of cannabinoids. Think of how the food industry makes vanilla or saffron.

Hope Jones said the trichomes are being separated from the plant all the time, even when someone is simply handling marijuana flower.

“The trichomes are breaking and then the resin is getting out of the trichomes and sticking to your hands,” she said.

She says even smoking the flower is technically a form of mechanical extraction. So, by the court’s logic, whenever those trichomes are separated from the plant a narcotic is being made.

“It is impossible to go in and buy a flower that has not had any trichomes break off and be in that container,” she said.

After Hope Jones explained this to a judge in Navajo County, he ruled in favor of a patient who had been caught with cannabis oil. But this science did not come up in the appeals court ruling, which takes precedence.

Part 1: Concern And Confusion | Part 2: One Man's Arrest | Part 3: Dispensaries, Patients In Limbo

Cannabis Case Leaves Dispensaries, Patients In Limbo

Alex Lane jokes he went from attorney to alleged narco-trafficker overnight.

The dubious new distinction isn’t because of the giant jars of marijuana on display at Lane’s dispensary, Cave Creek Cannabis, either.

Instead, the narcotic comes in the form of chocolate covered blueberries, olive oil spray and vape pens on display behind the counter. All of the items contains cannabis extracts made from the resin of the plant.

“The way to get consistent dosing is to use extracted materials,” said Lane.

Lane is a criminal defense attorney and a former prosecutor in Maricopa County who got into the cannabis business.

“These products are in almost everything purchased at a dispensary.”

And they’re now effectively illegal in Arizona — even for medical marijuana patients.

Lane sums up the situation this way.

“It’d be like saying you are allowed to purchase the orange and you are allowed to consume the orange and the juice inside the orange,” he said.

“However, if you take the same orange and you squeeze it into a glass and drink the juice, you have now committed a felony.”

This isn’t hyperbole.

This summer, the Arizona Court of Appeals upheld the conviction of Rodney Jones, a medical marijuana card holder. Jones was sentenced to prison after being arrested in northern Arizona with cannabis oil. In its decision, the court found that Arizona’s medical marijuana law doesn’t allow for extracts, only the flower.

And that has huge implications for many of the state’s 180,000 patients, not to mention dispensary owners like Lane. They are all committing felonies, according to the court’s logic.

“I think it is absolutely unfair that one patient gets singled out and prosecuted, and if you’re going to prosecute him, you got to prosecute me, too,” Lane said.

Lane felt so strongly he took an unorthodox step. He wrote the court a letter citing previous Arizona Supreme Court rulings that he says prove extracts are already legal.

The letter acknowledged he uses and sells the very products.

“Even though it was unusual for anybody to come into a criminal case, I felt it was warranted and appropriate,” Lane said. “If a lawyer is willing to offer a confession to the exact conduct the other guy just went to prison for, I should have been granted standing to intervene.”

Alex Lane
Will Stone/KJZZ
Alex Lane, who runs a medical marijuana dispensary in Cave Creek, says a recent court ruling on cannabis extracts isn’t stopping him from carrying the products.

But his request to join the case was denied.

Now the case is heading to the state’s highest court.

There are signs the Arizona Attorney General Mark Brnovich may be softening his approach on the issue.

On Monday, Brnovich withdrew his office’s opposition to letting the Arizona Supreme Court decide the case.

“The State of Arizona recognizes that law enforcement and others would benefit from statewide clarity on the issues presented,” said a court filing from Brnovich’s office.

It’s a reversal from earlier this month when the Attorney General’s Office asked the court not to hear the case and sided with the appeals court, which found cannabis extracts are not protected by the medical marijuana law.

“We believe this matter deserves a higher court to provide some certainty,” says Ryan Anderson, a spokesperson for Brnovich. “We did not want it decided on a procedural move.”

It’s too early to say how Brnovich will approach the case once it’s in front of the court, but Anderson said the “last thing the attorney general wants to do is stand in the way of legitimate patients getting access to their medicine.”

While Brnovich hasn’t offered any formal direction to law enforcement, Anderson says a “wait and see approach” is probably best until the case gets decided.

Likewise, the Arizona Department of Health Services has not instructed dispensaries to stop carrying cannabis extracts, but a lawyer for the agency did cite the Jones’ ruling when it rejected autism as a qualifying condition for medical marijuana.

At least one prosecutor is happy with the ruling.

Yavapai County Attorney Sheila Polk helped defeat full legalization of marijuana two years ago.

Her office brought the case against Rodney Jones.

“This case affirmed the way cannabis has always been treated in this county by my office, which is that it’s a narcotic drug,” Polk told KJZZ last month.

“We haven’t changed how we do business at all.”

The Arizona Medical Marijuana Act — passed by voters in 2010 — doesn’t explicitly mention cannabis extracts. But the criminal code does distinguish between marijuana flower and cannabis extracts (also called “hashish”).

Because the voter-approved law is silent on the matter, Polk argues medical marijuana card holders are committing felonies if they use the product.

“The rule of law is the appellate courts have the final word. The Jones’ decision is simple and it’s clear,” said Polk.

So is Polk raiding the dispensaries in her county?

It doesn’t appear so.

“I personally have never visited a dispensary in Yavapai County. I don’t know what their inventory is,” she says.

But patients are still at risk.

A prosecutor recently refiled charges in Navajo County against one medical marijuana patient, citing the Jones decision.

The Maricopa County Attorney’s Office says it’s not prosecuting anyone yet.

One reason for that is Jennifer Welton.

She and her husband went to court five years ago so they could give their young son, Zander, cannabis extracts for his seizures.

And they won.

“For it now to become illegal — which really it is illegal right now based on the ruling — I have parents who are scared to give their kid their medicine,” says Welton. “That’s ridiculous to me.”

Welton’s son has since passed away, but she now runs a charity and advocates for others like her.

She says it’s devastating this is still an issue.

“Just because you don’t understand how it works, doesn’t mean it doesn’t work, doesn’t mean that we shouldn’t have access to it,” she says.

“The way to correct this problem, these gaps between the letter and spirit of these marijuana reforms, is to have them addressed first and foremost by legislatures that can anticipate all those problems that might come up."
— Rob Mikos, Vanderbilt University

Rob Mikos, a professor of law at Vanderbilt University, says Arizona is a cautionary tale about the possible fallout of using the ballot instead of state legislatures to craft marijuana reform laws.

Mikos says these measures aren’t always comprehensive.

“You are opening the door to those opponents to revisit the issue and to exploit those gaps,” he said.

Michigan, for example, only clarified in 2016 what was legal in their state years after voters passed their medical marijuana measure.

Mikos says many lawmakers don’t want to get ahead of these disputes:

“The way to correct this problem, these gaps between the letter and spirit of these marijuana reforms, is to have them addressed first and foremost by legislatures that can anticipate all those problems that might come up.”

That did not happen in Arizona.

In fact, a bill aimed at fixing this very problem was introduced earlier this year, but it never got a hearing.

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