Arizona Cannabis Regulatory Overview
Voters passed Arizona’s Proposition 207 ballot initiative that authorized an adult-use cannabis marketplace on November 2, 2020. The voter approved bill amended state statutes to build off of Arizona’s well-established medical cannabis program and set an aggressive timeline for the first round of adult-use licensing.
Adult-use sales commenced at existing medical cannabis dispensaries on January 22, 2021.
Arizona Cannabis License Overview
Licensees other than testing facilities may be vertically integrated, as they are authorized to cultivate, process, and sell at retail. Regulators began accepting applications on January 19, 2021 with a process favoring “early applications” businesses that are either (1) already registered as Arizona medical dispensaries (and in good standing with regulators) or (2) seeking to operate in a county with fewer than two pre-existing registered dispensaries. At the outset, 26 licenses were reserved for qualified social equity applicants with focus on those from communities that have been disproportionately harmed by cannabis prohibition.
Though retail delivery is prohibited at launch, between January 1, 2023 and January 1, 2025, Arizona’s cannabis regulators must adopt rules to regulate the retail delivery of cannabis.
Arizona Cannabis Key Regulator
Arizona’s Department of Health Services, already overseeing the state's existing medical program. is now also tasked with regulating the adult-use market. The agency released initial, limited adult-use regulations shortly after the election results were certified. Additional regulations are currently under development.
Arizona Cannabis Locality Options
Under Proposition 207, localities may either prohibit marijuana establishments or enact reasonable zoning, signage, concentration limits, or regulations on time, place, and manner. Once delivery is permitted, localities may also prohibit or restrict that activity.