Arizona Prepares To Accept Marijuana Applications Next Week As New Draft Legalization Rules Are Issued

Arizona is one step closer to launching legal marijuana sales, with state regulators releasing new draft regulations as well as application forms for cannabis business licenses that will be accepted starting next week.

The state Department of Health Services, which issued an earlier version of proposed rules for the market in December, recently released its second iteration, with finalized regulations expected in the coming weeks.

Industry stakeholders have been encouraged by the expediency of the department’s rulemaking, which is required since voters overwhelmingly approved a ballot initiative to legalize adult-use marijuana during November’s election.

Applications for existing medical cannabis operators who want to enter the recreational market will open on January 19 and close on March 9. This is a significant development, as it signals that once rules are finalized, approved applicants could start selling marijuana to all adults over 21 as early as next month.

Four new required forms have been made available for applicants on the department’s site. These are largely supplemental, as they’re intended for current medical cannabis dispensaries that have already gone through the state’s existing licensing process. The forms ask for information on financing, zoning and property ownership.

The newest draft regulations cover licensing fees, the timeline for license approvals, the structure of the regulatory body, product labeling, public safety protocols and more. Many of the changes to the prior draft rules are technical, but there is one notable revision concerning credentialing for cannabis workers.

Rather than being credentialed for one specific facility, the worker registration will be expanded so that they’ll be certified to be employed at any cannabis operation in the industry.

“I think that we’re used to this type of steadfastness and quality work from our regulators, but I think it’s interesting to see it juxtaposed with what’s happening across the country,” Samuel Richard, executive director of the Arizona Dispensaries Association, told Marijuana Moment, noting the difficulty New Jersey lawmakers have faced in passing implementing legislation since voters approved a legalization referendum.

The New Jersey situation has been volatile. Implementing legislation was introduced shortly after the referendum vote, but there’s been a back-and-forth between lawmakers and the governor, who expressed concerns about certain provisions concerning underaged people. A “clean up” bill was expected to get a floor vote on Monday, but it was postponed after key legislators pulled their sponsorships.

“We’re getting ever closer to having our first transactions and New Jersey can’t even get it together to have their enabling legislation,” Richard said of Arizona’s relatively smooth process.

Under the state’s new legalization law, adults will be able to possess up to an ounce of marijuana at a time and cultivate up to six plants for personal use.

The measure also contains several provisions aimed at addressing the harms of prohibition such as allowing individuals with prior marijuana convictions to petition the courts for expungements and establishing a social equity ownership program.

Cannabis sales will be taxed at 16 percent. Tax revenue will cover implementation costs and then be divided among funds for community colleges, infrastructure, a justice reinvestment and public services such as police and firefighters.

While it’s not clear exactly when the first sales will launch, it’s possible regulators might want to hold off on announcing a specific date too far in advance, as it could attract a large influx in customers and long lines amid the coronavirus pandemic, Richard said.

That said, medical marijuana businesses in the state have implemented a variety of safety protocols to mitigate the spread of the virus, and Richard is confident the industry will be prepared when the industry officially launches.

“The lines around the block that you saw in Illinois this time last year could be pretty bunched up,” he said. “Our lines around the block are going to be pretty spaced out, and we might have a line around a couple of blocks just because we have a commitment to social distance.”

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