Cannabis Business Licenses in Arizona

In this video, 3C CEO Nic Easley gives an overview of what changes are pending in Arizona and the first action steps needed to prepare for adult-use licensing opportunities.

Program Details

Type of Program

• Medical

Regulatory Agency

• Department of Health and Human Services
  
  

History of Legalization in Arizona

Medical cannabis was legalized in 2010, via Proposition 203, with 50.1% of the vote. Proposition 203 allows patients with a doctor's recommendation to possess up to 2.5 ounces of cannabis. The law initially limited the number of dispensaries to 124 and allowed patients that reside over 25 miles from a dispensary to cultivate their own medical cannabis. 

In 2016, Proposition 205 was on the ballot to legalize adult-use cannabis in the state. The proposition did not pass, with 51.32% of the population voting against it. 

Market Metrics

• Population: 7.3 million
• Number of Licensed Cannabis Businesses: 131
• Number of Registered Medical Patients: 230,317 (3.16% of the population) as of March 31, 2020
• Tax Rate: 16% of Retail Price
• Arizona has a bonafide medical cannabis market. Qualifying conditions include both chronic pain and post-traumatic stress disorder (PTSD).

Licensing  

• There are currently no licenses available in Arizona. 

How to Get Started

• Actively assess the November referendum that, if passed, will legalize adult-use cannabis.
• Find ideal locations that are currently zoned for medical cannabis and can potentially be utilized for adult-use.
• Develop preliminary plans reflective of the early medical cannabis license applications, which include:
• Security Plan
• Cultivation/Processing/Retail Plan
• Business Plan
• Tracking, Testing, Packaging, & Labeling Plan
• Safety Plan
• Form a strong team with both cannabis and outside-industry experience.
• New licenses will be for Social Equity applicants. Observe the Social Equity requirements in other states, such as Massachusetts or Illinois, to determine their requirements, as Arizona will likely adopt similar rules.

Pending Changes to Arizona's Cannabis Program

Adult-use cannabis has yet to be legalized in Arizona. The Arizona Dispensaries Association and Arizona Cannabis Chamber of Commerce began organizing in August 2019 for another adult-use ballot initiative. The Arizona Dispensaries Association filed a ballot initiative application on September 26, 2019, for the "Smart and Safe Act." On August 11, 2020, the Secretary of State announced that the initiative had qualified for the November ballot as Proposition 207.

According to Prop 207, the early application process will be from January 19, 2021, to March 9, 2021, and will be limited to two licenses per county. 

Voters will decide on Proposition 207 on November 3, 2020. 



To date, 3C has developed cannabis license applications for clients in over 50 markets globally. Our team is standing by and ready to help you plan for, complete, review, and submit your application. Now is the time to get a head start.