CONANT LAW FIRM PLC - League of Arizona Cities and Towns, AZ · 2019-05-28 · Paul A. Conant, 012667 CONANT LAW FIRM, PLC . Northern Trust Bank Tower, Suite 925 . 2398 East Camelback

Paul A Conant 012667 CONANT LAW FIRM PLC Northern Trust Bank Tower Suite 925 2398 East Camelback Road Phoenix Arizona 85016-9002 Telephone 6025089010 Facsimile 6025089015 Email docketconantlawfirmcom

Attorneys for Valley Healing Group Inc

IN THE SUPERIOR COURT OF THE STATE OF ARIZONA IN AND FOR THE COUNTY OF MARICOPA

NOVA DEVELOPMENT SERVICES LLC an Arizona limited liability company ARIZONA WELLNESS COLLECTIVE 3 INC an Arizona non-profit corporation dba Nova Dispensary

PlaintiffsAppellants vs CITY OF MESA BOARD OF ADJUSTMENT a body politic CITY OF MESA a municipal corporation VALLEY HEALING GROUP INC an Arizona corporation real party in interest

DefendantsAppellees

Case No LC2017-000321

VALLEY HEALING GROUPrsquoS RULE 12(b)(1) and (6) MOTION TO

DISMISS FOR FAILURE TO STATE A CLAIM UPON WHICH RELIEF

MAY BE GRANTED

(Assigned to the Honorable Margaret Mahoney)

(Oral Argument Requested)

DefendantAppellee Valley Healing Group Inc (ldquoVHGrdquo) moves for dismissal of the

Complaint under Rules 12(b)(1) and (6) for failure to state a claim upon which relief can be

granted and lack of subject matter jurisdiction and requests an award of its attorneysrsquo fees

and costs

I Introduction

Definitions matter Here the definition which matters the most is what constitutes a

ldquoMedical Marijuana Dispensaryrdquo under the Mesa City Ordinance Because the Complaint

fails to allege facts demonstrating that plaintiffs or either of them was a ldquoMedical Marijuana

Dispensaryrdquo under the specific Mesa City Ordinance definition plaintiffs fail to state a claim

upon which relief can be granted arising from their dispensary separation distance arguments

Eschewing clarity from the outset the Complaint defines both plaintiffs collectively as

ldquoNovardquo Complaint para2 Plaintiff Arizona Wellness Collective 3 Inc is alleged to be a

ldquonon-profit corporationrdquo while plaintiff Nova Development Services LLC is merely alleged

to be ldquoan Arizona limited liability companyrdquo Although only a not for profit may be awarded

a dispensary registration certificate (ldquoDRCrdquo) by the Arizona Department of Health Services

(ldquoDHSrdquo)1 by defining ldquoNovardquo the way it did plaintiffsrsquo conflating allegations haze over just

which entity had which rights at which time Despite this curious pleading fogginess we can

sort out that neither plaintiff has stated a claim as a matter of law by examining the pertinent

language of DHS Rules and the Mesa City Code

As its name indicates a DRC is simply a ldquoregistrationrdquo certificate2 Once ldquoregisteredrdquo

under the Arizona Medical Marijuana Act (ldquoAMMArdquo) DHS Rules ldquo[g]overningrdquo

dispensaries which include ldquooversight requirementsrdquo3 provide what must be done to actually

operate as a legal MMJ dispensary

DHS Rules promulgated pursuant to AMMA provide that a non for profit registered

with DHS by obtaining a DRC may later submit to DHS an application for an ldquoapproval to

operaterdquo (ldquoATOrdquo)4 It is only that later grant of an ATO by DHS to a not for profit DRC

awardee which allows that awardee to actually operate a legal medical marijuana (ldquoMMJrdquo)

dispensary In fact each applicant applying for a DRC must include with the DRC application

a statement that ldquoif the dispensary is issued a dispensary registration certificate the dispensary

1 ARS Section 36-2806(A) 2 ARS Section 36-2804 3 ARS Section 36-2803 4 Ariz Admin Code (ldquoAACrdquo) R9-17-305

will not operate until the dispensary is inspected and obtains an approval to operate from the

Departmentrdquo5 Further DHS Rules expressly provide that ldquoBefore an entity with a dispensary

registration certificate begins operating a dispensary the entity shall apply for and obtain an

approval to operate a dispensary from the Departmentrdquo6 Because DHS has extensive rules

regarding what must be submitted to apply for and receive an ATO simply just getting a DRC

is no guarantee of getting an ATO 7

Aptly recognizing that a DRC awardee which wishes to ldquosomedayrdquo get an ATO cannot

until that day when it has an ATO operate as a legal MMJ dispensary the Mesa City Code

uses language to define ldquoMedical Marijuana Dispensaryrdquo as an entity which is actually

operating as a dispensary See Mesa City Code Section 11-1-6 (see Exhibit 1 hereto Mesa

Ordinance 5025 Section 1 p 2) The Mesa City Codersquos definition carefully uses active

language about what is happening in the present not prospective language about what might

happen in the future to describe what is (and therefore what is not) a dispensary A plain

reading of the definition of ldquoMedical Marijuana Dispensaryrdquo in the Mesa City Code does not

include within its scope a DRC awardee which hopes someday if it gets an ATO approved

by DHS to operate as a legal MMJ dispensary

ldquoNovardquo alleges that Mesa issued it a certificate of occupancy (ldquoCofOrdquo) for 1911 West

Broadway Road on October 20 2016 But absent an ATO issued by ADHS a mere CofO

would not allow ldquoNovardquo to operate a legal MMJ dispensary there In fact as a matter of law

we know that ldquoNovardquo could not have had its ATO from DHS when it got its CofO from Mesa

because a CofO is one of the very documents that a not for profit DRC awardee must submit

to DHS in order to apply for an ATO8

5 AAC R9-17-304(C)(1)(i) 6 AAC R9-17-304(D) 7 AAC R9-17-305 8 AAC R9-17-305(A)(2) referencing ldquocertificate of occupancyrdquo

Fatal to the ldquoNovardquo Complaint entirely absent from it is any allegation stating whether

or when Arizona Wellness Collective 3 Inc (the only plaintiff alleged to be a not for profit)

was awarded an ATO by DHS

As a matter of law the absence of this critical fact renders the ldquoNovardquo Complaint

subject to Rule 12(b)(6) dismissal because until and unless Arizona Wellness Collective 3

Inc was issued an ATO by DHS (if it was) it had no legal authority to operate as

An entity registered certified and authorized by DHS as a ldquoNonprofit medical marijuana dispensaryrdquo that acquires possesses sells distributes dispenses or otherwise provides medical marijuana (cannabis spp) to qualifying patients and designated caregivershellip(Emphasis added)

Mesa City Code Section 11-1-6 (see Exhibit 1 hereto Mesa Ordinance 5025 Section 1 p 2)

Accordingly there are no facts alleged in the Complaint from which the Court could conclude

that ldquoNovardquo was a ldquoMedical Marijuana Dispensaryrdquo under the Mesa City Code The

separation distance requirement set forth in Mesa City Code 11-31-34(A)(2) only applies to a

ldquoMedical Marijuana Dispensaryrdquo stating ldquoThe dispensary shall be located a minimum

distance of 5280-feet from the next nearest registered Medical Marijuana Dispensary

including dispensaries located in neighboring jurisdictionsrdquo (Emphasis added) The plain

language of the separation distance requirement does not apply to an entity which hopes one

day in the future to get an ATO from DHS so that it can operate a legal MMJ dispensary

There are good policy and logical reasons for this If an entity was able to get a CofO

at a particular location but could never get DHS to approve its ATO why should that entity

be able to buffer-out some other entity capable of getting DHS to issue it an ATO

The Complaintrsquos omission of whether and if so when ldquoNovardquo got its ATO is not a

trivial fact If ldquoNovardquo failed to get its ATO and become a ldquoMedical Marijuana Dispensaryrdquo

under the definition used by the Mesa City Code before VHG did then it is ldquoNovardquo whose

use was prohibited by Mesa City Code Section 11-31-34(A)(2) within one radial mile

surrounding the VHG facility Not the other way around If (as we suspect) ldquoNovardquo obtained

its ATO from DHS after VHG did then it is ldquoNovardquo which is buffered-out by the separation

distance requirement Nova may have omitted this key fact to avoid being immediately hoist

on its own petard

Regardless of its reasoning for failing to allege that key fact as a matter of law the

ldquoNovardquo Complaint should be dismissed for failure to plead if and when it received its ATO

This absent fact is foundation to whether ldquoNovardquo has stated a claim or not because without

an ATO ldquoNovardquo could not have been operating per the Mesa City Code as a ldquoMedical

Marijuana Dispensaryrdquo If ldquoNovardquo was not operating as a ldquoMedical Marijuana Dispensaryrdquo

then clearly the separation distance requirement upon which its Complaint relies never

became relevant since the separation distance requirement only applies to the ldquonext nearest

registered Medical Marijuana Dispensaryrdquo It does not apply to a nearby ldquowanna-berdquo

dispensary

Also VHG should be awarded its fees and costs as against Nova pursuant to ARS

Section 12-349 ldquoNovardquo should have known when it sued VHG that the Complaint did not

allege that ldquoNovardquo obtained an ATO (or if it did when) and therefore that it was not alleging

that it ever became ldquoMedical Marijuana Dispensaryrdquo under the Mesa City Code such that the

5280 feet separation distance requirement ever became relevant VHG has been forced to

needlessly incur legal cost and expense to bring this significant factual omission in the ldquoNovardquo

Complaint to the Courtrsquos attention and to explain how the AMMA and DHS Rules work to

together with the pertinent language in the Mesa City Code bar plaintiffs from any relief

VHG would like those funds back in its hands and believes that ldquoNovardquo should pay them

II Argument

A Because ldquoNovardquo Fails to Allege Facts Demonstrating it Ever Obtained an ATO the Complaint Fails to Allege any Entitlement to any ldquoSeparationrdquo Distance Argument Based on its ldquoFacilityrdquo Location

Syllogistic logic dictates dismissal of the Complaint as to the 5280 feet contention

1 The separation distance requirement of 5280 feet only applies to the ldquonext

nearest Medical Marijuana Dispensaryrdquo Mesa City Code Section 11-31-34(A)(2)

2 A not for profit entity is not a ldquoMedical Marijuana Dispensaryrdquo until and unless

it ldquoacquires possesses sells distributes dispenses or otherwise provides medical marijuana

(cannabis spp) to qualifying patients and designated caregiversrdquo Mesa City Code Section

11-1-6

3 ldquoBefore an entity with a dispensary registration certificate begins operating a

dispensary the entity shall apply for and obtain an approval to operate a dispensary from the

Departmentrdquo AAC R9-17-304(D)

Because nowhere does the ldquoNovardquo Complaint allege that it applied for or obtained an

ATO from DHS (and if so when) the Complaint fails to allege facts sufficient to state a claim

Additionally and in the alternative VHG also makes the following arguments

B The Complaint Fails to Allege Facts Demonstrating That ldquoNovardquo Has Raised a Non-Moot Claim for Judicial Determination Concerning New Life Church

The mootness doctrine directs that judicial ldquoopinions not be given concerning issues

which are no longer in existence because of changes in the factual circumstancesrdquo Chambers

v United Farm Workers Org Comm 25 Ariz App 104 106 541 P2d 567 569 (1975)

While normally a factual issue is not appropriate to interject on a motion to dismiss courts

may take judicial notice of facts ldquonot subject to reasonable disputerdquo when they ldquocan be

accurately and readily determined from sources whose accuracy cannot reasonably be

questionedrdquo Ariz R Evid 201(b)(2) The court may disregard allegations in a complaint that

are contradicted by matters properly subject to judicial notice Daniels-Hall v Natl Educ

Assn 629 F3d 992 998 (9th Cir 2010) Here ldquoNovardquo alleges that the Mesa City Code has

not been changed yet (Complaint para 48) but that is incorrect It has been changed See

Exhibit 2 Ordinance No 5388 Accordingly ldquoNovarsquosrdquo challenge ldquoas a taxpayerrdquo about the

separation distance from a church issue is ldquomootrdquo and accordingly the Court may decline to

exercise subject matter jurisdiction by taking judicial notice of the fact of the law change

To the extent that as a backup ldquoNovardquo seeks to rely on its allegation that VHG location

was 271 feet too close to New Life Church when VHGrsquos CofO was approved ldquoNovardquo has

failed to exhaust its administrative remedies to challenge the CofO grant before commencing

this action Therefore the Court also should not exercise subject matter jurisdiction for that

additional reason as well The administrative exhaustion argument is explained more fully

C AMMArsquos Statutory School Separation Distance of 500rsquo ldquoOccupies the Fieldrdquo Over any Competing Municipal Ordinance Asserting a Greater Distance

When the subject of legislation is a matter of statewide concern state law binds all

throughout the state including charter cities Clayton v State 38 Ariz 466 300 P 1010

(1931) Luhrs v City of Phoenix 52 Ariz 428 83 P 2d 283 (1938) Article 13 Section 2 of

the Arizona Constitution provides that cities or towns of at least 3501 residents may ldquoframe

a charter for [their] own government consistent with and subject to the Constitution and the

laws of the staterdquo (Emphasis added) Arizona courts have rejected municipal ordinances that

conflict with state statutes particularly when such ordinances involve the police powers of

the state City of Scottsdale v State of Arizona 237 Ariz 467 paras 18-19 (App 2015)

Zoning regulation is based upon the police power of the state Hart v Bayless Investment and

Trading Company 86 Ariz 379 346 P2d 1101 (1959) City of Scottsdale v Superior Court

103 Ariz 204 439 P 2d 290 (1968) And zoning regulation is a matter of statewide concern

City of Scottsdale v Scottsdale Associated Merchants Inc 120 Ariz 4 583 P 2d 891 (1978)

Indeed in Committee for Neighborhood Preservation v Graham 14 Ariz App 457 484 P2d

226 (1971) the Court of Appeals emphasized that the State had preempted the field of zoning

legislation and cities and counties were bound to follow the state guidelines established by

state law

AMMA was passed by citizen initiative in 2010 which established the following

separation distance between a MMJ dispensary and a school ldquofive hundred feetrdquo ARS

Section 36-3804(B)(1)(b)(ii) Before AMMA possession sale and cultivation of marijuana

was criminalized under Title 13 of the Arizona Revised Statutes By legalizing and regulating

MMJ subject to AMMA AMMA ldquooccupied the fieldrdquo with respect to any specific

requirements it established Regarding MMJ zoning regulations while AMMA permits

ldquoreasonable zoning regulationsrdquo (ARS Section 36-280101) nowhere did AMMA give any

authority to municipalities to contravene its specific 500rsquo separation distance from schools

expressly set forth in ARS Section 36-3804(B)(1)(b)(ii)

Therefore regarding the ldquoschoolrdquo allegations made by ldquoNovardquo whether or not Mesa

did or did not require a school separation distance of greater than 500rsquo does not matter

AMMA specifically set that separation distance at 500rsquo Any ordinance adopted by Mesa

under the aegis of the ldquoreasonable zoning regulationsrdquo language of ARS Section 36-

280101that contravenes the AMMA 500rsquo separation distance provision is incapable of

surviving a legal challenge State law primacy over local regulation is always the rule in

Arizona when zoning matters are involved In Levitz v State 126 Ariz 203 204ndash05 613 P2d

1259 1260ndash61 (1980) the Arizona Supreme Court held that the regulation of advertising

signs is not purely a local matter and that a charter citys advertising sign regulation is not

exempt from State regulation requirements See also Scottsdale Associated Merchs supra

(invalidating a Scottsdale ordinance that conflicted with Arizona law on a sign-regulation

issue) AMMA exercised specific zoning authority using the statersquos police power on a

statewide basis to set a 500rsquo separation distance between schools and MMJ dispensaries Any

contrary local law or rule is invalid as a matter of law

Consequently even if the Mesa zoning ordinance required a separation distance of

greater than 500rsquo from schools it would be unenforceable ldquoNovardquo alleges that VHGrsquos

location is ldquo1090rdquo feet from East Valley Institute of Technology Complaint para 54 Because

1090 feet is greater than 500 feet ldquoNovarsquosrdquo school separation distance allegations are

insufficient for it to state a claim regardless of whether Mesa has or has not adopted a school

separation distance greater than 500rsquo

D Dispensary Size Limitation Issues may be Waived or Remedied Administratively or Otherwise

ldquoNovardquo never alleges that it exhausted its administrative remedies concerning its

current size limitation arguments about VHGrsquos dispensary size It could have but does not

allege that it did protest the issuance of that CofO to the Mesarsquos Development Services

Building Safety Division In this regard movants incorporate by reference and join in all of

the arguments made by the City of Mesa in Section IV of its motion to dismiss concerning

administrative exhaustion Had ldquoNovardquo timely done so any issues (if any) could have been

identified and corrected without need of litigation ldquoNovardquo alleges that VHG received its

CofO on ldquoNovember 8 2016rdquo (Complaint paras 33 51) Accordingly it knew of VHGrsquos

pending application well before filing this suit The absence of any allegation in the Complaint

that Mesarsquos grant of a CofO to VHG was protested and that administrative remedies were

exhausted compels dismissal of the Complaint to the extent that it is based on size limitation

issues

Further on this subject the Complaint only alleges that VHGrsquos construction permit

ldquoapplicationrdquo (Complaint para 62) showed a location of 4250 square feet in size ldquoNovardquo

does not allege that this number was correct or that as built the inside portion of the VHG

location used for dispensary operations (versus for example a separately demised suit of

offices) is that large For that additional reason the Complaint fails to allege facts upon which

a claim for relief could be granted

III Conclusion

Based on the foregoing the Complaint must be dismissed for failure to state a claim

upon which relief can be granted VHG requests an award of its fees and costs on the grounds

and for the reasons set forth herein above

RESPECTFULLY SUBMITTED this 3rd day of October 2017

CONANT LAW FIRM PLC By s Paul A Conant

Paul A Conant Northern Trust Bank Tower Suite 925 2398 East Camelback Road Phoenix Arizona 85016 Counsel for Valley Healing Group Inc

Original filed this 3rd day of October 2017 with The Clerk of the Court MARICOPA COUNTY SUPERIOR COURT COPY of the foregoing delivered this 3rd day of October 2017 to

The Honorable Margaret Mahoney MARICOPA COUNTY SUPERIOR COURT COPY of the foregoing mailed this 3rd day of October 2017 to Franklyn D Jeans Esq Cassandra H Ayres Esq BEUS GILBERT PLLC 701 North 44th Street Phoenix Arizona 85008 Attorneys for plaintiffsappellants Mary Grace McNear Deputy City Attorney City of Mesa PO Box 1466 Mesa AZ 85211 Attorneys for City of Mesa and Mesa Board of Adjustment By sKaren Stecker

Exhibit 1

Ordinance No ~ZS ----------- AN ORDINANCE OF THE COUNCIL OF THE CITY OF

Text written in BOLD MESA MARICOPA COUNTY ARIZONA AMENDING ALL CAPS indicates SECTIONS 11-1-6 11-4-2 11-4-4 11-5-2 11-5-5 11-6-5 11shynew language 7-2 AND 11-13-2 OF THE MESA CITY CODE PERTAINING StFilEetRF911gR fonts TO THE PERMITTED LOCATIONS OF MEDICAL indicate proposed MARIJUANA DISPENSARIES ON AND OFF-SITE language to be FACILITIES FOR THE CULTIVATION OF MEDICAL deleted

L-_____---J MARIJUANA AND INFUSION FACILITIES FOR THE PRODUCTION OF MEDICAL MARIJUANA PRODUCTS DISTRIBUTED THROUGH MEDICAL MARIJUANA DISPENSARIES AND PROVIDING PENALTIES FOR THE VIOLATION THEREOF

WHEREAS on November 2 2010 the voters of the state of Arizona approved Proposition 203 (1-04-2010) the Arizona Medical Marijuana Act (AMMA) codified in the in Arizona Revised Statutes Title 36 ARS sect 36-2801 et seq and

WHEREAS AMMA provides for the medical use possession and cultivation of marijuana and

WHEREAS pursuant to federal law it is illegal to possess use and manufacture or distribute marijuana in any form as well as other controlled substance and

WHEREAS the City of Mesa zoning ordinance currently does not permit the use of marijuana for any purpose and

WHEREAS AMMA allows municipalities to enact reasonable zoning restrictions that limit the use of land for registered dispensaries to specific areas and

WHEREAS City held a hearing of the Planning and Zoning Board on November 17 2010 to discuss issues and receive comments issues and concerns related to the operation of medical marijuana dispensaries and medical marijuana cultivation facilities in the City and made several recommendations contained herein for consideration by the City Council and

WHEREAS the Planning and Zoning Board found there could be secondary adverse impacts from medical marijuana dispensaries cultivation and infusion facilities including but not limited to the increase in crimes such as loitering burglary and robbery in the areas immediately surrounding the dispensaries cultivation sites and infusion facilities and

WHEREAS the Planning and Zoning Board determined that further regulations are needed to protect the public health safety and welfare of the residents and children from the secondary adverse impacts and

WHEREAS the City Council has determined that for the reasons set forth above and for the purpose of protecting the public health safety and welfare of the residents and visitors of Mesa it is in the best interests of the City to amend the City Zoning Ordinance as provided herein

NOW THEREFORE BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF MESA as follows

1 medical marijuanadoc

Section 1 That Section 11-1-6 of the Mesa City Code is hereby amended to include the following terms and definitions as written below inserted in alphabetical order of the term as appropriate with the language for the existing terms and definitions of this Section remaining intact and as presently stated

MEDICAL MARIJUANA MEANS OF ALL PARTS OF THE GENUS CANNABIS WHETHER GROWING OR NOT AND THE SEED OF SUCH PLANTS THAT MAY BE ADMINISTERED TO TREAT OR ALLEVIATE A QUALIFYING PATIENTS DEBILITATING MEDICAL CONDITIONAS APPROVED BY DHS OR SYMPTOMS ASSOCIATED WITH THE PATIENTS DEBILITATING MEDICAL CONDITION

MEDICAL MARIJUANA CULTIVATION (CULTIVATION) MEANS THE PROCESS BY WHICH A MARIJUANA (CANNABIS SPP) PLANT IS GROWN

MEDICAL MARIJUANA CULTIVATION FACILITY (CULTIVATION FACILITY) SHALL MEAN A BUILDING STRUCTURE OR PREMISES USED FOR THE GROWING OR STORAGE OF MEDICAL MARIJUANA AND REGISTERED WITH DHS AS RELATED TO A DISPENSARY

MEDICAL MARIJUANA DESIGNATED CAREGIVER (DESIGNATED CAREGIVER) SHALL MEAN A PERSON WHO MEETS THE DEFINITION OF ARS 36-2801(5) AND HOLDS AND POSSESSES A VALID DESIGNATED CAREGIVER REGISTRY IDENTIFICATION CARD ISSUED BY DHS IDENTIFYING THAT PERSON AS AN INDIVIDUAL PROVIDING CARE AND ASSISTANCE TO A MEDICAL MARIJUANA QUALIFYING PATIENT OR PATIENTS AND HAS AGREED TO ASSIST A MEDICAL MARIJUANA QUALIFING PATIENT OR PATIENTS WITH THAT PATIENTS OR PATIENTSMEDICAL USE OF MARIJUANA

MEDICAL MARIJUANA DISPENSARY (DISPENSARY) AN ENTITY REGISTERED CERTIFIED AND AUTHORIZED BY DHS AS A NONPROFIT MEDICAL MARIJUANA DISPENSARY THAT ACQUIRES POSSESSES SELLS DISTRIBUTES DISPENSES OR OTHERWISE PROVIDES MEDICAL MARIJUANA TO QUALIFYING PATIENTS AND DESIGNATED CAREGIVERS SUCH DISPENSARIES MAY INCLUDE ON-SITE CULTIVATION AND INFUSION FACILITIES

MEDICAL MARIJUANA INFUSION FACILITY (INFUSION FACILITY) A FACILITY THAT INCORPORATES MEDICAL MARIJUANA (CANNABIS SPP) BY THE MEANS OF COOKING BLENDING OR INCORPORATION INTO CONSUMABLEIEDmLE OR TRANSDERMAL GOODS

MEDICAL MARIJUANA QUALIFYING PATIENT (QUALIFYING PATIENT) MEANS A PERSON WHO HAS BEEN ISSUED HOLDS AND POSSESES A VALID REGISTRY IDENTIFICATION CARD ISSUED BY DHS AUTHORIZING THEM TO USE MEDICAL MARIJUNA TO TREAT OR ALLEVIATE A DEBILITATING MEDICAL CONDITION OR SYMPTOM APPROVED BY DHS

Section 2 That Sub-section 11-4-2(A) ofthe Mesa City Code is hereby amended as follows

11-4-2 PERMITTED USES

(A) Permitted Uses in all Single Residence Districts RI-90 Rl-43 Rl-35 RI-15 RI-9 Rl-7 Rl-6

1 One (1) single dwelling unit on any lot or parcel

2 Foster homes and residential facilities for the developmentally disabled

3 Schools and churches Refer to Section 11-13-2(L) of this Ordinance

4 Group homes for the handicapped and adult care homes Refer to Section 11-13-2(Q) of this Ordinance

5 Day care group homes with up to five (5) children Refer to Section 11-13-2(0) of this Ordinance

6 Public utility buildings and facilities when necessary for serving the surrounding territory provided that no public business offices and no repair or storage facilities are maintained therein

7 Publicly owned recreational uses and community buildings

8 Accessory uses and accessory buildings when associated with a dwelling unit or other primary pennitted use

9 Temporary sales offices andor model homes pertaining to the sale of homes being constructed in the immediate subdivision are pennitted in all residential zoning districts subject to a Use Pennit

(a) Approval of such sales offices andor model homes may be granted for a three- (3) year period or until all homes in the subdivision are completed whichever occurs first Extensions to the three- (3) year time limit may be granted if the property owner can demonstrate that the need for the temporary sales offices andor model homes continues to exist

(b)The carport or garage of a model home may be used as a temporary sales office provided temporary off-street parking is available Such carport or garage must be returned to a condition suitable for the parking of automobiles in accordance with Section 11-16-2 of this Ordinance prior to the sale or residential occupancy of such model home

10 MEDICAL MARIJUANA CULTIVATION AS AN ACCESSORY USE AND ONLY IN THE EVENT ONE OF THE RESIDENTS OF THAT SITE IS A QUALIFYING PATIENT ANDOR DESIGNATED CAREGIVER AND HOLDS AND POSSESSES A VALID DHS IDENTIFICATION CARD AUTHORIZING THE RESIDENT(S) TO CULTIVATE MEDICAL MARIJUANA AND THE ACCESSORY USE CULTIVATION FACILITY IS A MINIMUM OF 25 MILES FROM THE NEAREST MEDICAL MARIJUANA DISPENSARY REFER TO SECTION 11-13-2(W) FOR ADDITIONAL REQUIREMENTS

Section 3 That Section 11-4-4 of the Mesa City Code is hereby amended as follows

11-4-4 PROHIBITED USES IN ALL SINGLE RESIDENCE DISTRICTS Rl-90 Rl-43 Rlshy35 Rl-15 Rl-9 Rl-7 Rl-6

(A) All commercial and business uses except those specifically pennitted in Sections 11-4-2 and 11-4shy3 of this Ordinance

(B) All manufacturing warehousing and wholesaling

(C) Multiple residence

(D) Manufactured homes except as permitted in the Rl-6 district and as specified in the Manufactured HomelRecreational Vehicle chapter of this Ordinance

(E) Recreational vehicle parks and manufactured home parks

(F) The keeping or storage of any commercial vehicle having a gross vehicle weight rating (GVWR) exceeding thirteen thousand (13000) pounds or having dual rear wheels exceeding seventeen inches (17) in diameter

(G) MEDICAL MARIJUANA DISPENSARY

(II) MEDICAL MARIJUANA CULTIVATION FACILITY AS A PRIMARY USE

tG1 (I) Uses similar to those listed above in this Section as determined by the Zoning Administrator

Section 4 Sub-Section 11-5-2(A) of the Mesa City Code is hereby amended as follows

(A) Permitted Uses in all Multiple Residence Districts R-2 R-3 and R-4

I Single and multiple residences

2 Boarding houses and group homes for the handicapped with up to five (5) guest rooms or housing up to ten (10) people

3 Foster homes group foster homes and residential facilities for the developmentally disabled

4 Bed and breakfast establishments

7 Publicly owned and operated parks playgrounds and community buildings and other recreational uses

8 Accessory uses and buildings when associated with a dwelling unit or other primary permitted use

9 Day care centers and day care group homes

10 Temporary sales offices andor model homes pertaining to the sale of homes being constructed in the immediate subdivision are permitted in all residential zoning districts subject to a Use Permit

(a) Approval of such sales offices andor model homes may be granted for a three- (3) year period or until all homes in the subdivision are completed whichever occurs first Extensions to the

medical marijuanadoc

three- (3) year time limit may be granted if the property owner can demonstrate that the need for the temporary sales offices andor model homes continues to exist

(b )The carport or garage of a model home may be used as a temporary sales office provided temporary off-street parking is available Such carport or garage must be returned to a condition suitable for the parking of automobiles in accordance with Section 11-16-2 of this Ordinance prior to the sale or residential occupancy of such model home

11 MEDICAL MARIJUANA CULTIVATION AS AN ACCESSORY USE AND ONLY IN THE EVENT ONE OF THE RESIDENTS OF THAT SITE IS A QUALIFYING PATIENT ANDOR DESIGNATED CAREGIVER AND HOLDS AND POSSESSES A VALID DHS IDENTIFICATION CARD AUTHORIZING THE RESIDENT(S) TO CULTIVATE MEDICAL MARIJUANA AND THE ACCESSORY USE CULTIVATION FACILITY IS A MINIMUM OF 25 MILES FROM mE NEAREST MEDICAL MARIJUANA DISPENSARY REFER TO SECTION 11-13-2(W) FOR ADDITIONAL REQUIREMENTS

Section 5 Section 11-5-5 of the Mesa City Code is hereby amended as follows

11-5-5 PROHIBITED USES IN ALL MULTIPLE RESIDENCE DISTRICTS

(A) All commercial and business uses except those specifically permitted in Sections 11-5-2 and II-5shy3 of this Ordinance

(C) The keeping or storage of any commercial vehicle having a gross vehicle weight rating (GVWR) exceeding thirteen thousand (13000) pounds or having dual rear wheels exceeding seventeen inches (17) in diameter

(D) MEDICAL MARIJUANA DISPENSARIES

(E) MEDICAL MARIJUANA CULTIVATION FACILITIES AS A PRIMARY USE

(DF) Uses similar to those listed above in this Section

Section 6 That Sub-section 11-6-5 of the Mesa City Code is hereby amended as follows

11-6-5 PROHIBITED USES IN ALL COMMERCIAL DISTRICTS

(A) All industrial and manufacturing uses

(B) All storage warehousing and wholesaling except as specified in the C-2 and C-3 districts

(C) All residential uses except as specified in Section 11-6-4 of this Ordinance

(D) MEDICAL MARIJUANA DISPENSARY

(E) MEDICAL MARIJUANA CULTIVATION FACILITY AS A PRIMARY USE

(PF) Uses similar to those listed above in this Section as determined by the Zoning Administmtor

Section 5 That Sub-section 11-7-2(B) of the Mesa City Code is hereby amended as follows

(B) Additional Permitted Uses in Manufacturing and Industrial Districts M-I and M-2

I Outdoor storage display and activities accessory to any permitted use

2 All uses permitted in the O-S C-l C-2 and C-3 districts under the least restrictive condition as they apply to such districts provided

(a) No individual retail store shall exceed an area often thousand (10000) square feet

(b) No group commercial development shall exceed an aggregate area of fifty thousand (50000) square feet

3 A dwelling unit in conjunction with a primary use intended for occupancy by the proprietor caretaker or night-watchman of the primary use Refer to Uniform Building Code for occupancy separation regulations

4 Industrial trade schools such as welding or metal fabrication and similar industrial arts

5 Animal hospitals clinics and boarding kennels

6 Crematories

7 Heavy equipment repair sales and rentals

8 Any warehousing manufacturing packaging distributing bottling or processing use provided that such use shall conform to all ofthe following requirements

(a) All outside storage of material or equipment as ancillary to the primary use shall be confined to the rear one-half (12) ofthe lot

(b) All activities pertaining to the actual manufacture or processing of the product involved shall be conducted entirely within the enclosed building

9 Construction yards

10 Automobile truck recreational vehicle motorcycle boat mobile home and trailer sales and rental facilities and appurtenant buildings without the area limitations specified in Section 11-7shy2(B)2 of this Ordinance (above)

11 Commercial recreational entertainment uses such as pool and dance halls nightclubs bars cocktail lounges and similar uses

12 MEDICAL MARIJUANA DISPENSARY SUBJECT TO COMPLIANCE WITH ALL REQUIREMENTS OF SECTION 11-13-2(W)

13 MEDICAL MARIJUANA CULTIVATION FACILITY SUBJECT TO COMPLIANCE WITH ALL REQUIREMENTS OF SECTION 11-13-2(W)

14 MEDICAL MARIJUANA INFUSION FACILITY SUBJECT TO COMPLIANCE WITH ALL REQUIREMENTS OF SECTION 11-13-2(W)

Section 6 That Section 11-l3-2 of the Mesa City Code is hereby amended by the addition of Subshysection (W)

11-13-2 ADDITIONAL PROVISIONS AND EXCEPTIONS

(W) MEDICAL MARIJUANA DISPENSARY CULTIVATION FACILITIES AND INFUSION FACILITIES

1 MEDICAL MARIJUANA DISPENSARIES (DISPENSARIES) ARE PERMITTED ONLY IN THE M-l AND M-2 DISTRICTS PROVIDED EVIDENCE HAS BEEN DEMONSTRATED OF COMPLIANCE WITH ALL OF THE FOLLOWING

A REGISTRATION OF THE LOCATION OF THE DISPENSARY AND THE ASSOCIATED CULTIVATION FACILITY WITH THE PLANNING DIVISION IN ACCORDANCE WITH THE REQUIREMENTS OF ITEM 5 BELOW

B THE DISPENSARY SHALL BE LOCATED A MINIMUM DISTANCE OF 5280shyFEET (I-MILE) FROM THE NEXT NEAREST MEDICAL MARIJUANA DISPENSARY INCLUDING DISPENSARIES LOCATED IN NEIGHBORING JURISDICTIONS AND COUNTY PROPERTIES

C THE DISPENSARY SHALL BE LOCATED A MINIMUM DISTANCE OF 2400shyFEET FROM THE FOLLOWING LAND USES INCLUDING THE LISTED LAND USES WHEN LOCATED IN NEIGHBORING JURISDICTIONS AND COUNTY PROPERTIES

I RESIDENTIAL SUBSTANCE ABUSE FACILITIES

II ALCOHOL REHABILITATION FACILITIES

III CORRECTIONAL TRANSITIONAL HOUSING FACILITIES AND

IV OFF-SITE MEDICAL MARIJUANA CULTIVATION FACILITIES (EXCEPT THE DISPENSARY SPECIFICALLY ASSOCIATED WITH THE OFF-SITE CULTIVATION FACILITy)

D THE DISPENSARY SHALL BE LOCATED A MINIMUM DISTANCE OF 1200shyFEET FROM THE FOLLOWING LAND USES INCLUDING THE LISTED LAND USES WHEN LOCATED IN NEIGHBORING JURISDICTIONS AND COUNTY PROPERTIES

I CHURCHES

II LIBRARIES

III SCHOOLS (LIMITED TO KINDERGARTEN THROUGH 12TH GRADE) AND

III PUBLIC PARKSLOCATED IN M-l AND M-2 ZONING DISTRICTS

E THE DISPENSARY SHALL BE LOCATED A MINIMUM DISTANCE OF 500-FEET FROM THE FOLLOWING LAND USES INCLUDING THE LISTED LAND USES WHEN LOCATED IN NEIGHBORING JURISDICTIONS AND COUNTY PROPERTIES

I PUBLIC PARKS LOCATED IN ALL RESIDENTIAL ALL COMMERCIAL PF AND PEP ZONING DISTRICTS

II PRIVATELY-OWNED DESIGNATED AND MAINTAINED OPEN SPACE RECREATIONAL AREAS AND

II DAY CARE CENTERS AND PRE-SCHOOLS

F THE DISPENSARY SHALL BE NO LARGER THAN 2500 SQUARE FEET OF WIDCH NO MORE THAN 500 SQUARE FEET SHALL BE USED FOR STORAGE

OF PRODUCT

G mE DISPENSARY SHALL BE HOUSED IN A PERMANENT BUILDING

H A MINIMUM OF 25 OF THE GROSS FLOOR AREA (GFA) OF mE DISPENSARY SHALL BE SET ASIDE FOR USE AS AN INTERIOR CUSTOMER WAITING AREA

I mE DISPENSARY SHALL NOT INCLUDE

I A DRIVE THROUGH WINDOW

II OUTDOOR SEATING

IIJ OUTDOOR VENDING MACHINES AND

IV TEMPORARY PORTABLE OR SELF-POWERED MOBILE FACILITIES

J mE DISPENSARY SHALL NOT OFFER DIRECT OR HOME DELIVERY SERVICE

K mE TIME THE DISPENSARY MAY BE OPEN TO THE PUBLIC SHALL BE LIMITED TO THE HOURS BETWEEN 800 AM AND 900 PM OF mE SAME CALENDAR DAY

2 MEDICAL MARIJUANA CULTIVATION FACILITIES (CULTIVATION F ACILITY(IES)) AND MEDICAL MARIJUANA INFUSION FACILITIES (INFUSION FACILITIES) AS DEFINED BY THIS ORDINANCE ARE PERMITTED ONLY IN THE M-l AND M-2 DISTRICTS SUBJECT TO COMPLIANCE WIm ALL OF mE FOLLOWING

A REGISTRATION OF mE LOCATION OF THE CULTIVATION ANDOR INFUSION FACILITY WITH mE PLANNING DIVISION IN CONFORMANCE WIm mE REQUIREMENTS OF ITEM 5 BELOW

B THE LOCATION OF mE CULTIVATION FACILITY SHALL BE A MINIMUM DISTANCE OF 2400 FEET FROM THE NEXT NEAREST MEDICAL MARIJUANA DISPENSARY OR CULTIVATION FACILITY INCLUDING DISPENSARIES LOCATED IN NEIGHBORING JURISDICTIONS AND COUNTY PROPERTIES THIS SEPARATION DISTANCE DOES NOT APPLY TO THE DISTANCE BETWEEN THE CULTIVATION FACILITY AND mE SPECIFIC DISPENSARY SERVED BY THE CULTIVATION FACILITY

C THE LOCATION OF THE CULTIVATION FACILITY SHALL BE A MINIMUM DISTANCE OF 1200 FEET FROM THE FOLLOWING LAND USES INCLUDING THE LISTED LAND USES LOCATED IN NEIGHBORING JURISDICTIONS AND COUNTY PROPERTIES

I CHURCHES

II LIBRARIES

III PUBLIC PARKS OR PRIVATELY-OWNED AND MAINTAINED OPEN SPACE AREAS AND

IV SCHOOLS (LIMITED TO KINDERGARTEN mROUGH 12TH GRADE)

D THE MAXIMUM FLOOR AREA OF A CULTIVATION FACILITY SHALL BE LIMITED TO 25000 SQUARE FEET

E THE MAXIMUM FLOOR AREA OF AN INFUSION FACILITY SHALL BE LIMITED TO 10000 SQUARE FEET

E CULTIVATION FACILITIES SHALL BE HOUSED IN PERMANENT BUILDINGS

3 DESIGNATED CAREGIVER CULTIVATION IS PERMITTED AS AN ACCESSORY USE IN ALL RESIDENCE DISTRICTS SUBJECT TO COMPLIANCE WITH ALL OF THE FOLWWING

A THE CULTIVATION FACILITY SHALL BE LOCATED A MINIMUM DISTANCE OF 25-MILES FROM THE NEXT CLOSEST MEDICAL MARIJUANA DISPENSARY THIS 25-MILE SEPARATION DISTANCE INCLUDES THOSE DISPENSARIES THAT ARE LOCATED IN NEIGHBORING JURISDICTIONS INCLUDING COUNTY PROPERTIES

B THE CULTIVATION ACTIVITY SHALL BE HOUSED IN A PERMANENT BUILDING

C THE CULTIVATION ACTIVITY SHALL BE LIMITED TO A MAXIMUM FLOOR AREA OF 250 SQUARE FEET INCLUDING STORAGE AREAS

D THE LOCATION (INCLUDING THE CORRECT ADDRESS) OF THE CULTIVATION SHALL BE REGISTERED WITH THE PLANNING DIVISION IN ACCORDANCE WITH ITEM 5 BELOW

E THE DESIGNATED CAREGIVER CULTIVATING MEDICAL MARIJUANA SHALL BE IN POSSESSION OF A VALID DHS DESIGNATED CAREGIVER CARD WITH THE AUTHORIZATION TO CULTIVATE MEDICAL MARIJUANA

4 QUALIFIED PATIENT CULTIVATION IS PERMITTED AS AN ACCESSORY USE IN ALL RESIDENCE DISTRICTS SUBJECT TO COMPLIANCE WITH ALL OF THE FOLLOWING

D THE LOCATION (ADDRESS) OF THE CULTIVATION ACTIVITY SHALL BE REGISTERED WITH THE PLANNING DIVISION IN ACCORDANCE WITH ITEM 5BELOW

E AT LEAST ONE RESIDENT OF THE PROPERTY ASSOCIATED WITH THE CULTIVATION ACTIVITY SHALL HOLD AND POSSESS A VALID DHS ISSUED REGISTRY IDENTIFICATION CARD WmCH AUTHORIZES THE QUALIFIYING PATIENT TO CULTIVATE MEDICAL MARIJUANA

5 ALL MEDICAL MARIJUANA DISPENSARIES CULTIVATION FACILITIES AND INFUSION FACILITIES INCLUDING ALL ACCESSORY CULTIVATION FACILmES SHALL REGISTER THE LOCATION OF THE FACILITY (AND ASSOCIATED OFF-SITE FACILITY IF APPLICABLE) WITH THE PLANNING DIVISION SUCH REGISTRATION SHALL BE VALID FOR A PERIOD OF ONE (1) YEAR FROM THE DATE OF REGISTRATION AND MAY BE RENEWED ONLY IN THE EVENT DHS ALSO RENEWS THE DISPENSARY REGISTRATION AND CERTIFICATION IF DHS DENIES FAILS TO RENEW OR REVOKES THE ISSUANCE OF A DISPENSARY REGISTRATION AND

CERTIFICATION THE PLANNING DIVISION REGISTRATION OF THE LOCATION OF THE DISPENSARY AND ASSOCIATED CULTIVATION ANDOR INFUSION FACILITIES SHALL EXPIRE IMMEDIATELY SUCH REGISTRATION WITH THE PLANNING DIVISION SHALL PROVIDE THE FOLLOWING INFORMATION

A NAME MAILING ADDRESS TELEPHONE NUMBER AND E-MAIL ADDRESS OF THE INDIVIDUAL OR NON-PROFIT ORGANIZATION OPERATING THE FACILITY IF A NON-PROFIT ORGANIZATION REGISTERS THE FACILITY LOCATION INFORMATION PERTAINING TO CONTACTING THE INDIVIDUAL RESPONSIBLE FOR MANAGING THE FACILITY SHALL ALSO BE PROVIDED

B A WRITTEN NARRATIVE DESCRIBING HOW THE LOCATION AND IMPROVEMENTS ASSOCIATED WITH THE REGISTERED FACILITY COMPLY WITH THE REQUIREMENTS OF THIS ORDINANCE

C IF APPLICABLE THE SUBMITTAL OF THE NAME(S) AND LOCATION(S) OF THE OFFSITE MEDICAL MARIJUANA CULTIVATION FACILITY ASSOCIATED WITH THE DISPENSARY OPERATION

D APPLICABLE ONL Y TO DISPENSARIES A COpy OF THE OPERATING PROCEDURES ADOPTED IN COMPLIANCE WITH ARS sect36-2804(B)(l)(C) INCLUDING RECORD KEEPING AND SECURITY MEASURES

6 ANY COMBINATION OF MEDICAL MARIJUANA DISPENSARY CULTIVATION FACILITY ANDOR INFUSION FACILITY MAY OCCUR AT A SINGLE LOCATION PROVIDED

A THE COMBINED FACILITY COMPLIES WITH ALL REQUIREMENTS OF THIS SUBSECTION

B THE MAXIMUM FLOOR AREA ASSOCIATED WITH THE COMBINED ACTIVITY SHALL NOT EXCEED IN AGGREGATE THE MAXIMUMS SPECIFIED BY ITEMS IF 2D AND 2E FOR THE SPECIFIC INDIVIDUAL USES BEING COMBINED

C THE FLOOR AREA SPECIFICALLY ASSIGNED TO INDIVIDUAL DISPENSARY CULTIVATION ANDOR INFUSION ACTIVITIES WITHIN THE COMBINED FACILITY DOES NOT EXCEED THE MAXIMUMS SPECIFIED BY ITEMS IF2D AND 2E OF THIS SUBSECTION FOR EACH INDIVIDUAL LAND USE

Section 7 SEVERABILITY

If any section subsection sentence clause phrase or portion of this Ordinance or any part of the material adopted herein by reference is for any reason held to be invalid or unconstitutional by the decision of a Court of competent jurisdiction such decision shall not affect the validity of the remaining portions thereof

Section 8 PENALTY

CIVIL PENALTIES

Upon finding that a person is responsible for a civil violation of this Title the Civil Hearing Officer shall impose a civil sanction of not less than fifty dollars ($5000) nor more than five hundred dollars ($50000) for each violation In determining the appropriate sanction the Civil Hearing Officer may assess against

the responsible party the Citys personnel mailing and other costs incurred in investigating and hearing the case not to exceed a maximum of five hundred dollars ($50000)

EACH DAY SEPARATE VIOLA nON

Each day in which a violation of this Title continues or the failure to perform any act or duty required by this Title or by the Civil Hearing Officer continues shall constitute a separate civil offense

HABITUAL OFFENDER

A A person who commits a violation of this Title after previously having been found responsible for committing three (3) or more civil violations ofthis Title within a twenty-four (24) month period - whether by admission by payment of the fine by default or by judgment after hearing - shall be guilty of a criminal misdemeanor The Mesa City Prosecutor is authorized to file a criminal misdemeanor complaint in the Mesa City Court against habitual offenders For purposes of calculating the twenty-four (24) month period under this Subsection the dates of the commission ofthe offenses are the determining factor

B Upon conviction of a violation of this Subsection the Court may impose a sentence of incarceration not to exceed six (6) months in jail or a fine not to exceed two thousand five hundred dollars ($250000) exclusive of penalty assessments prescribed by law or both such fine and imprisonment The Court shall order a person who has been convicted of a violation of this Section to pay a fine of not less than five hundred dollars ($50000) for each count upon which a conviction has been obtained A judge shall not grant probation to or suspend any part or all of the imposition or execution of a sentence required by this Subsection except on the condition that the person pay the mandatory minimum fines as provided in this paragraph

C Every action or proceeding under this Section shall be commenced and prosecuted in accordance with the laws of the State of Arizona relating to criminal misdemeanors and the Arizona Rules of Criminal Procedure

PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF MESA MARICOPA COUNTY ARIZONA this 7th day of February 2011

APPROVED

MaYor~ ATTEST

Ci ~~ rk

EFFECTNE DATE

Exhibit 2

IN THE SUPERIOR COURT OF THE STATE OF ARIZONA

IN AND FOR THE COUNTY OF MARICOPA