>> Coming up in the next hour on Arizona PBS, on Arizona horizon, budget talks such as they are at the state legislature and a report from Nogales, where thousands wait for title 42 and that's all ahead on Arizona PBS.

Good evening and welcome to Arizona horizon.

A federal transportation mask mandate for planes, trains and buses has been extended.

The seven-day moving average for Covid cases has been rises since march and Anthony Fauci says those are the caseses we know about.

>> Those are people each of us know who have been infected and have done a home test and don't feel ill, maybe mildly symptomatic and don't report it to anyone.

So I really do think that there's some agree of undercounting and I don't know to what extend that it's occurring.

>> That said, Fauci does not consider this latest increase a crisis.

>> There's people right now in the overwhelming majority of the locations in the country that are in green zones that are back to normal life and not wearing masks indoor and schools are back.

So there is a degree of normality and you wouldn't call it's a crisis, but you don't want to forget about it because we know what varients can do.

We got fooled with Delta and Omicron and we have to realize we're dealing with a moving target for us.

>> Police in New York arrested a man of ten people on a rush-hour subway train in Brooklyn.

He alerted police of his location and charged with crimes related to attacks on transit systems and if convicted, facing life in prison and set off smoke grenades and opened fire hitting at least ten people and none of the injuries are life-threatening and no motive and James had rants on his personal life.

>> Big surf water park has been sold according to the Arizona republic and reports the first inland surfing facility was recently purchased by a real estate company.

They lost luster and never reopened expect public reports the 36-acre property sold for $49 million and no word on what the new owners intend to what they intend to do with the surfing spot.

Paul Boyer the hold-out on senate ideas and needed for the senate to pass a budget and wants that spending plan to increase education funding in ways that puts him at odds with fellow republicans didn't we spoke with the senator earlier today.

Thank you for joining us today and we appreciate your time and I have to say, it sounds like the senate and house and adjourned until Monday and why the break until now?

>> That's a great question.

Your guess is as good as mine.

>> Let's talk about the budget here because usually about this time, we're talking a lot about it and not hearing much of anything and how close, from your perspective, how close are we to seeing a budget proposal and something to be voted on?

>> Well, from my perspective, I still think we're weeks away.

I've heard rumors they'll try to pass a skinny budget and call it's a day.

That's what everyone around here is talking about, but I just don't see that happening.

Not only because I don't know -- you could get enough votes for a skinny budget, but we have to address the elephant in the room.

We repeal and replace?

>> Current spending continues as you hammer out other details and does that make any sense or is that a problem?

The elephant still exists, does it not?

>> It's still a problem.

We live in a desert and have been in a drought for the last ten years and we won't do a thing on water?

And I just don't see that.

Two bills that have to pass and that's continuing the Arizona border regions and department of corrections.

I don't see how it realistically we pass the skinny budget, call a special for a flat tax reform and call it's a day.

>> The adjournment and the skinny budget is talked about and is this a way, do you think, of trying to get people holding out on certain issues on, I don't know, you, to come around and see president Fann's side and to get in line?

>> They want to fundraise because they can't raise money from tax right now and they want to knock on doors and they're so distracted with policy that it's frustrating they can't get out in an election year right now.

>> As far as a republic budget on the senate side, have you committed to a republican and what have you committed to and having problems with?

>> I don't have any first budget meeting with.

As far as I know, there's nothing to commit to.

I have a budget meeting tomorrow didn't I haven't seen a single budget.

>> Would you commit to the flat income tax and is that something you would approve?

>> It includes 850 million for funding and the crop one, two, three and if we can get all four pieces, I'm in.

>> We see reports that not every republican is in on increasing spending on education and especially to prop 208, and 800, $900 billion and $800 million and what are you hearing from the republican colleagues and some don't want to increase education spending to that level.

>> Yeah, and so it would be offset by the democratic colleagues and they would love new dollars.

It's better than 280.

The new spending would be flexible and they could use it on poverty and whatever they like.

>> With that said, are you willing to work with Democrats on a budget?

>> Absolutely, 100%.

>> Your republican colleagues feel the same way?

>> I hope so?

>> But do they?

>> It's been a struggle and some are interested.

I think it's something we could all get behind.

>> It sounds like the voucher program, call it what you will, it sounds like the Democrats don't want to hear anything about this and if that's the case, how important is expanding that voucher system?

I saw a report that senator Toma says if you expand this system, he wants high income families are included and how do explore the circle?

>> Great question.

For me, my sole first is high poverty kids and I'm hoping Mr. Toma comes around and we'll see.

>> There grand bargain, has it lost a little bit of it steam?

>> Because there's not a lot going on and it's on me to meet with members one-on-one and to explain why it's a good idea.

Outside of the legislature, I get to meet a single person, yeah, that's a terrible idea.

Oh, my gosh, that's brilliant and, again, I wish I could take credit.

I got the idea, minus the EIA from the Arizona republican and it is a good idea, that something I think would benefit the entire state.

>> If it's excised or not quite to your liking, could you go with the tax?

>> Given the ability to get to a better school or education, that, to me, is a nonstarter.

We have to get these kids and no criticism of the current school that they're at, but for some kids, it might be the best school on the planet and not working for them and just given that option, I just think we have to have that.

>> And yet, you're willing to work with Democrats and they say every dollar into this system is a dollar to public school, especially struggling public schools with high poverty kids and how do you respond?

>> I've added $100 million for special education.

>> But you're still talking to ESA's and vouchers and they say every penny goes here doesn't go there.

>> I mean, look at the fiscal note, the fiscal note says there's a positive gain to the state journal fund if any high poverty ESA plan passes.

Not to mention, coupling that with an additional one hundred million dollars and that makes up more than enough for any school.

>> Bottom line here, we have five -- the surplus is outrageous, like five billion, something crazy and is that one of the reasons you're adjourned to Monday?

>> Always a problem when more money and everyone wants priorities in.

I think there's a lot of animosity at this point just generally here at the legislature and I think it's going to take -- maybe it's just good Friday and a happy Easter for us to all come back and realize to do what's best for the state.

>> Are you feeling that animosity, especially from leadership?

>> A little bit.

>> So I guess we wait until Monday after the holiday weekend to see what happens and senator, we appreciate your time and thank you for talking with us and best of luck, sir.

>> Thanks, Ted.

>> Up next on Arizona horizon, Marsh has been legal in state for over a year now and looking at where the industry is today.

>> Prop 207 known as the smart and safe act was the sec attempt to get a marijuana law on the books allowing anyone 21 years of age or older to possess, cultivate or use cannabis and sales in the first year topped a billion dollars with the same if not more expected this year and the producer takes a look.

>> We see probably two thousand people on a Friday and it's just turning.

>> Reporter: At the dispensary, business is booming.

A 12,000 square foot Paladim including a storefront and a growing facility and lab and the state's only cannabis kitchen searching up pizza and wings.

>> Rice krispie treats.

>> Reporter: And all adding up to a different green.

>> Right about $1.4 billion of top-line taxable sales were reported.

>> Reporter: Samuel Richard is the executive director of the Arizona dispensary's association.

His team advocates for and educates dispensary owners about best practices and the new law.

According to the Arizona department of revenue, of that 1.5 billion, 528 million came from recreational cannabis sales and the remains from medical cannabis approved by voters a decade ago.

If you didn't purchase cannabis, you're benefiting, says Richard.

>> In excess of one billion dollars through the program and that funds community colleges, public health and safety across the state like rural infrastructure and behavioral health support for all sorts of folks and then, it shores up the cities and county's responsibilities to the pension program.

>> Reporter: Rome says his three dispensaries saw 70% of the $62 million in sales from recreational cannabis.

>> The average consumer is coming in three times a month, 3.2 times a month.

>> Reporter: He credits the pandemic for some of that windfall.

>> Sales increased by 40% and we were deemed an essential part of the community.

>> Reporter: In recent months, that pandemic bump waned but sales are still strong.

Recreational cannabis is not without opponents.

From concerns about where dispensaries, by law, they must be 500 feet away, we would see a dispensary on every corner.

Because there are a limited amount of licenses, it's unlikely and it would attract young children and part of the job is to prevent that.

>> We also work with a variety of packaging companies to ensure that all regulated packaging is child resistent.

>> Reporter: While California tops the nation for sales, it has a huge illicit drug problem because of the way it's taxed.

>> As the products go from the start of the supply chain to sale, it's taxed along the way and so the effective tax rate at the purchase in California, can be upwards of 50 to 60%.

>> Reporter: Compared to Arizona, where that same cannabis is taxed at 16%.

>> So then you have your benefits on the bottom.

>> Reporter: Despite the negative aspects, Melina and his team are ready to expand both here and in other states and Richard is optimistic, too, that as the industry goes, so, too, will Arizona's acceptance of cannabis.

>> I think that's the goal, that cannabis consumption should be seen as friends at happy hour or just enjoying a leisurely day at the park with friends.

>> This is social equity licenses and they were handed out last week were designed to benefit people in communities harmed by the criminal laws and concerned that large marijuana companies are using predatory tactics for loopholes in the awarding of the licenses.

Welcome to Arizona horizon and thank you for joining us.

Interesting story in new times and social equity licenses and let's start with the defining terms and what are those licenses?

>> Social equity licenses are a class of cannabis dispensary, which in Arizona, it gives you the ability to operate cannabis dispensary, medical or recreational.

But the social equity program is back to 2020, when the state of Arizona legalized this.

As a part of the program, there were 26 to people who were disproportionately harmed by the harsh laws on cannabis, the war on drugs.

And by law, 26 cannabis dispensary licenses in Arizona are defined as social equity licenses and there are a number in the state and that makes them highly valuable potentially.

>> How valuable?

>> So, you know, there's no hards -- >> In practice, you see a lot of applicants partnering with major investors in order to, you know, go through the arduous process and whether investors are working with people who are harmed in this way.

>> It sounds like they're using these people as a front and they have to be 51% owners and they may not receive any of the profits at all.

>> Yeah, that is a front what critics use to describe this from the arrangements and applicants entered into with investments.

One contract that we looked at in the story, where technically, this license would be 51% owned under the contract and because of the loopholes and legal languages that attorneys throughout the contract use, this person would not have any practical control over the company.

They would not be owed any of the profits and they would go to a third-company management profit and take a buy-out.

>> These big companies, major players and where are they from?

>> Family names in Arizona's cannabis industries and the biggest cannabis companies in the state and some of the most applications.

So we're thinking Mohove committed 300, and there were 15000 total and that's a huge share.

You have mint dispensary that submitted dozens of applications and that's another cannabis company in Arizona that operates in other states, as well.

And also copper state familiars.

So basically the biggest.

>> The biggest companies and are there shell companies, as well, hiding other folks?

>> We don't know who -- there are some investors who submitted hundreds of applications or at least in one case, 200 applications.

This investor or a group of investors, we don't know who they are, based on corporate documents and they won in the lottery, five licenses, submitted two to the pool and registered as two in Wyoming and we don't know.

>> In Wyoming?

>> Yes.

In a town known for, you know, being a good place to register your shell company.

>> Interesting.

>> So, this sounds a little squirrly here.

Is any of this against the law?

Is any of this against any kind of regulation?

>> Right.

So I mean, this is what the companies will say, they're complying by Arizona's program and the Arizona department of health services, which is the one operating this program has told me they evolved for the social equity program and it was fairly vague with making these rules that they did do a review of the applications, but it just simply was not against the rules for these investors to, you know, submit in some cases hundreds of applications into the lottery.

>> And to use some of these people as fronts, if you will, and your story, one of the businesses says they're willing to sell and I'm willing to buy and it sounds like these would be on the up and up.

The people you talk to, do they understand what they're getting into, that this is a complicated issue?

>> This is a real concern that critics of the program have raised.

The woman I spoke with for that story, her son, she and her son went through this application process and found themselves under immense pressure from the investor they worked with.

The timeline was so short and the deadline was weeks or months from when they started talking to them, they were pressured in giving this information and didn't have a team of attorneys to review the contract and they did have a team paying to make these contracts and so, I think, that people worry there's a balance there, even if they're entering into the agreement.

>> Especially if you're 51% owner and thank you very much.

Last question, what kind of response have you had?

Are people surprised by it?

Is there a call to change something and let's not let this continue?

>> Yeah.

I think critics have been making these claims about the program saying that this is how -- back when the rules were released last year, there were a lot of people who said, this is what will happen.

Companies will line up and they'll, you know, work with these people and benefit most from this program and so, I think my story, people weren't so surprised.

Evidence that this was really happening and something people were warning would happening and when the licenses were awarded last week.

>> What did we see?

>> The number of licenses, around two-thirds of the licenses went to either cannabis companying operating, who already have the dispensaries in Arizona or to unknown investors.

So we don't know exactly how many are independent.

It could be -- my estimate is eight who are independent.

>> Wow, that's it.

This is really good stuff and great job.

Phoenix new times and regarding marijuana and good to have you here and thanks for having us.

>> Thank you for having me >> And that is it for now.

And thank you for joining us and you is a great evening.

The next half hour on Arizona PBS, meet the golden Eagles, collegiate champs in flight competitions.