I replaced my front pads less than a month ago with Lyndall Z-Plus pads.
Today I put the bike on the lift to clean up the rims, I noticed when I spin the front wheel that the pads drag. It's not hard to turn but the pads are dragging. Is this normal or should the wheel spin freely?

 

I had my pads replaced by my Harley dealer and I could hear them draging.
I just assumed that there is a break in period.

 

It's normal for them to drag a little. They don't retract further than the disc. Or you could say there is no pressure to push them away from the disc. But the wheel shouldn't be hard to spin.

 

There is a "break in " period, but it really does not affect pad drag.
Unless the pads were somehow deformed, in which instance a case might be made that drag would be affected by "break in", but it is a pretty tenuous link.
If they are good quality, and straight and square, then they should be good as far as drag goes from the get go.
A slight pad noise can be normal dependent on the system in use, but the wheel should certainly be free.

 

Actually, you are completely wrong.
The quad seal(inside the caliper) is located in an undercut bore, and movement is controlled by deformation of the seal, so that when the lever is released, the seal resumes its former square shape, and retracts the piston, allowing the pad to clear the rotor.
As the pad wears, the movement is sufficient that the pad slides through the seal slightly, but the remainder of the action remains the same.
Otherwise the piston would drag all the time.
It is totally not normal for a brake to drag.
Sliding caliper types have other issues that may cause drag, but a fixed caliper in good shape should allow for free wheel movement.
Otherwise the pads would over heat from the constant drag, and not be effective.