Arizona Court of Appeals Division One holds the federal Controlled Substance Act does not preempt state officials from processing and approving zoning for medical marijuana dispensaries and further holds that Arizona’s Medical Marijuana Act does not allow zoning ordinances to completely ban such dispensaries.

Maricopa County refused to issue zoning documents to a company that was trying to open a medical marijuana dispensary under the Arizona Medical Marijuana Act (“AMMA”).  The county attorney argued that the AMMA was preempted by the federal Controlled Substances Act (“CSA”) and that county officials risked federal prosecution by issuing such zoning documents.  The State of Arizona intervened and also argued preemption.  The trial court granted partial summary judgment finding no preemption and ordered the County to issue zoning documentation.  The court later granted summary judgment by striking a zoning amendment that completely banned dispensaries.  Several resulting appeals were combined and the Court of Appeals affirmed the partial summary judgment finding no preemption and the summary judgment striking the zoning amendment.

First, the CSA does not preempt the portions of the AMMA at issue, which address the processing of zoning documents and approval of zoning for dispensaries.  Federal preemption of state laws can be express or it can be implied through field preemption, obstacle preemption, or impossibility preemption.  The parties agreed and the CSA provides that there is no express preemption or implied field preemption.  The Arizona Supreme Court previously determined that the AMMA was not preempted under obstacle preemption in a case addressing criminal probation terms prohibiting medical marijuana use.  Reed-Kaliher v. Hoggatt, 237 Ariz. 119 (2015).  Similarly, the zoning process does not create an obstacle to federal enforcement of the CSA.  The Court of Appeals declined to recognize a distinction between authorization and decriminalization and found that regardless of how they are designated the AMMA’s zoning provisions do not support a claim of obstacle preemption. 

The Court of Appeals also found that there is no impossibility of preemption due to the risk of prosecution under federal law.  The Ninth Circuit has already concluded that officials who enforce state medical marijuana statutes are entitled to immunity.  United States v. Rosenthal, 454 F.3d 943 (9th Cir. 2006).  Despite statements of federal prosecutors regarding prosecution, Congress has prohibited funding to any Justice Department effort to prevent Arizona’s medical marijuana laws.

Second, the trial court properly struck an amendment to the applicable zoning ordinance.  The amendment purported to allow dispensaries in limited areas but also included a poison pill that prohibited any acts in violation of federal law.  This effectively banned all dispensaries.  The AMMA only allows “reasonable zoning regulation that limit [dispensaries] to specified areas.”  The AMMA does not allow zoning ordinances such as this one that completely ban dispensaries