Arizona passed Proposition 207, the Smart and Safe Act, during the November 2020 election to legalize the recreational use of cannabis alongside with the medical cannabis program established in 2010. On January 22, 2021, the Arizona Department of Health Services (ADHS) began approving applications for which dispensaries have already opened for business. The speed for which this process was completed makes Arizona the fastest state to successfully launch their cannabis program.
While the program is already underway, there are many rules and regulations which must be followed before you can open a dispensary. The following information will provide an overview of Proposition 207, including what you need to know if you are planning on entering and operating in Arizona’s new recreational cannabis industry.
According to the new law, adults who are at least 21 years old can legally purchase cannabis products from a nonprofit state licensed dispensary. A wide range of products will be available for purchase, including flower, extracts, edibles, salves, topicals and capsules.
Proposition 207 allows individuals to:
- Purchase up to 1 ounce (28 grams) of cannabis with no more than 5 grams in the form of concentrates
- Cultivate up to six (6) cannabis plants at their primary residence
All recreational cannabis purchases are subject to a 16% sales tax. While delivery services are available for medical cannabis patients, these services will not be offered for recreational cannabis customers at this time.
As part of the state’s medical cannabis program, patients can purchase up to 2.5 ounces (70 grams) in a 14-day period. There is a state-provided tracking system used by all dispensaries to ensure these limits are adhered to. Medical cannabis purchases are subject to a 6.6% state tax and each city is entitled to levy an additional tax of 2-3% if they desire.
Cannabis Licensure in Arizona
The ADHS is responsible for issuing licenses to businesses interested in opening a new dispensary. The following rules have been established to govern the licensure process:
- Application submissions for a cannabis establishment license (recreational dispensary license) started being processed on January 19, 2020
- No more than two (2) recreational dispensary licenses will be issued in counties without medical cannabis dispensaries
- If a county already has a medical dispensary, only one recreational dispensary license will be issued
- Medical dispensaries that are issued a recreational license will be able to operate both aspects of their business from the same location
Upon receiving a license from the ADHS, a business will be permitted to operate:
- A single retail location that sells, cultivates and manufactures cannabis products
- A single off-site cultivation facility which can be used to cultivate and manufacture cannabis products, but not sell them to the public
- A single off-site location that manufactures, packages and stores cannabis products, but does not sell them to consumers
Social Equity Ownership Program
The ADHS is allowed to issue 26 licenses to applicants who qualify under the Social Equity Ownership Program. This program is being created to promote the ownership of cannabis businesses by people who have been disproportionately impacted by the enforcement of prior cannabis laws. Applications for these special licenses will start being accepted within six (6) months of finalizing the rules of the Social Equity Ownership Program. Currently, there is no timeline for establishing the rules associated with this program.
Cannabis Facility Agent Licenses
In order to work for a cannabis business or testing facility, individuals must obtain a Facility Agent License. Only one facility agent license is required per person and will permit those individuals to work at multiple cannabis businesses or testing facilities.
In order to obtain a Facility Agent License, you must:
- Be 21 or older
- Have not been convicted of an excluded felony offense
American Cannabis Company can Help Establish your New Business
Setting up a new cannabis business can be more complicated than you would expect. As there are many legal hurdles to navigate, it is important to have the help of an experienced cannabis consultant who can successfully guide you through the process and ensure your new business is set up for long term success and position itself as a leader in Arizona’s fledgling recreational cannabis industry.
At American Cannabis Company, we have been helping entrepreneurs just like you navigate the waters of establishing new cannabis businesses in each market across the country. Our unique License Right Approach™ is specifically designed to help you obtain a cannabis license and build a foundation for a successful business.
As part of our exclusive approach, you will receive:
- The proper guidance necessary to ensure you adhere to all Arizona regulations
- A detailed explanation of the opportunities available that align with your specific business goals
- Cohesive and comprehensive business planning
- Our exclusive Green Profits Operations Roadmap™ to help you realize the full potential of your business
- Our Aligned Success Guarantee™
When you work with ACC, you can count on receiving a flexible approach that puts your unique needs and goals at the forefront. We will help you build your business from the ground up and establish a framework that can help you grow in the burgeoning Arizona cannabis landscape.
Schedule a Consultation
Please contact us today to schedule a consultation. We provide cannabis consulting services nationwide.