Activists sue over social equity marijuana licenses, alleging the licenses are going to big cannabis companies

Lawsuit alleges that big marijuana companies are acquiring Arizona's social equity pot licenses

Currently, over 1,500 people have applied for a social equity license, but activists say they have tied over 500 applications to large dispensaries. FOX 10's Matt Galka reports.

PHOENIX - A possible high stakes court hearing took place on Jan. 28 over the marijuana social equity license program in Arizona.

A lawsuit was filed to make sure those lucrative licenses get into the hands of the people disproportionately effected by marijuana laws, and keep them out of the hands of big cannabis corporations.

Currently, More than 1,500 people applied for a social equity license, which is part of the voter-approved Proposition 207, and 26 such licenses are set to be awarded by the state soon.

The intent for social equity licenses is to give people disproportionally effected by marijuana laws a chance to get into a lucrative business that previously upended their lives.

When activists dug into the applications, however, they tied more than 500 applications to large dispensaries - the exact opposite of what they wanted.

"With the social equity licenses, they have it to where you can win the license, and sell it the next minute afterwards," said Celeste Rodriguez.

Rodriguez and Acre 41 sued over the program, alleging that established cannabis companies have infiltrated the program in an effort to gobble up more licenses. Rodriguez claims the companies have either bankrolled the $4,000 application fees for clients and made sweetheart deals to get the licenses afterwards, or they are just planning on buying the licenses from the winners.

"Those are phantom applications they're putting in. Why are they getting credit for being an application that is 'within the regulations' of what a true social equity applicant is?" said Rodriguez.

The Arizona Department of Health Services took months to write the rules for applicants, and wants the case thrown out.

"Plaintiff’s requested relief would harm, not help, the hundreds and thousands of people they purport to speak on behalf of who are the social equity applicants," said Roopali Desai, an attorney for AZDHS.

Currently, there is a bill at the Arizona State Legislature that would prevent a social equity license holder from selling the license within 10 years, and if they do sell it, the license would have to go to another qualifying individual, not corporation.