Arizona’s Booming Adult-Use Marijuana Market and How to get Involved

This article was originally featured on the CB Advisors blog.

Just three months after voters approved recreational marijuana in November 2020, the Arizona adult-use program was up and running, making it one of the fastest implementations in the country.

Recreational marijuana sales in Arizona have been strong. MJBizDaily projects that the state’s recreational market could be worth $350-400 million in its first year and $700-760 million by 2024. Investors and Multi-State Operators (MSOs) have their eyes on Arizona’s Booming Adult-Use Marijuana Market & How To Get Involved.

New Adult-Use Dispensary Licenses

In April 2021, Arizona held a lottery for 13 new recreational licenses for businesses to open cannabis businesses in rural counties. Despite the $25,000 entry fee, over 300 businesses entered raising a quick $9.5 million for state coffers.

Social Equity Licenses

A major component of Arizona’s program is its social equity program. The state plans to issue 26 new adult-use licenses under this program. The idea is to promote the ownership and operation of marijuana establishments by individuals disproportionately impacted by the enforcement of previous marijuana laws. The Department will begin accepting applications for these licenses from Dec 1 – 14, 2021 and licenses will be allocated via lottery.

To submit an application, applicants must qualify as a social equity applicant. Per the Arizona Department of Health Services website, to qualify, one or more of the principal officers or board members of the applying entity holding an aggregate of at least 51% ownership in the entity must meet 3 of the following 4 criteria:

Had a household income for at least three (3) of the previous five (5) years that, for the respective year, was less than 400% of the federal poverty level.
Has been adversely affected by the enforcement of previous marijuana laws because the individual:
- Is eligible and has petitioned for expungement pursuant to A.R.S. Section 36-2862, or
- Was convicted in Arizona of a violation of the federal or state law related to marijuana or marijuana paraphernalia and does not have an excluded felony offense.
Has been adversely affected by the enforcement of previous marijuana laws because the individual is related, as one of the following, to another individual who was convicted in Arizona for marijuana or marijuana paraphernalia crimes:
- Spouse
- Surviving Spouse
- Parent
- Child
- Sibling
- Legal Guardian
Has a physical address and has lived for at least three (3) of the previous five (5) years at the physical address in a community that has been identified by ADHS as disproportionately affected by the enforcement of Arizona marijuana laws

How Can Sapphire Risk Help?

Tony Gallo and the team at Sapphire Risk Advisory Group are prepared to help with licensing and security procedures for cannabis businesses in New York and New Jersey. Follow us on social media to stay up to date with cannabis industry updates!

Authors

Sara Gullickson is the Founder and Chief Executive Officer of CB Advisors. Sara is an entrepreneur, investor, and corporate dealmaker with more than a decade of experience building and scaling businesses personally and professionally. A high-level strategist, Sara advises stakeholders on corporate structure, financing, and operations to better position their companies for growth and potential exit.

Maxime Kot is the President of CB Advisors. Maxime Kot is president and part owner of national consulting firm The Cannabis Business Advisors. A cannabis licensing and compliance expert with six years of direct industry experience, Kot has built a proven track record securing multiple cannabis licenses across 17 state markets.

If you’re interested in entering the New York or New Jersey recreational marijuana market, contact the CB Advisors team today to start developing your licensing plan and approach. New Jersey license applications are expected to open in Q4 2021 and New York in Q1 2022.