Police say they have arrested the operator of two "compassion clubs" in Tempe and seized more than 120 marijuana plants.
The arrest came after a series of search warrants were served at Top Shelf Hydro College, formerly known as the AZ Go Green Co-op.
James Earl Chaney, owner and operator of Top Shelf Hydro College, was arrested at his residence in Phoenix.
Undercover detectives purchased large quantities of marijuana at his business, which is in violation the state's new medical marijuana law.
"They were saying it was for donations, but when our undercovers would go in, there was a price they had to pay. There was for quantity for quality, there was a different price for each one," says Tempe Police Sgt. Mike Pooley.
Also seized during the warrants were large amounts of cash, 8 guns, and 3 vehicles.
Compassion clubs opened in Phoenix-area strip malls and office parks when medical marijuana advocates became frustrated by the long delay between the state Medical Marijuana Act passing in 2010 and dispensaries opening.
Arizona has more than 35,000 residents with medical marijuana cards, but only six dispensaries where card-holders can legally obtain the drug.
Compassion clubs aren't regulated while the dispensaries are tightly regulated.
More arrests could come at a later time. The investigation is ongoing.
Video: FOX 10's Anita Roman reports.
The Associated Press contributed to this report.