Long considered a conservative state, Arizona approved cannabis legalization in the 2020 election — and on January 22nd, only 54 days after election results were certified, recreational sales began. This is the fastest introduction ever of adult cannabis sales in a state; previously, Nevada had been the leader with an eight-month period between voter approval and launching initial sales.
Why so quickly? It helped that Arizona was already one of the strongest medical cannabis markets in the country, and that the Smart and Safe Arizona Act favored existing medical cannabis license holders. So most of the companies that received recreational licenses were able to begin sales at full speed. And of course, the demand was there. While Arizona’s Republican governor Doug Ducey opposed the legislation, residents overwhelmingly approved it thanks to an influx of new residents and a growing Latino population — likely reasons why the state went for Biden and made such a media splash in doing so.
In addition, the Arizona Department of Health Services moved remarkably fast for a governmental agency. It established its rules for allocating licenses on January 15th, and immediately began approving and processing applications so operators could begin sales the following week — even though it could have waited up to 60 days.
By contrast, the other states that approved recreational cannabis in November — Montana, New Jersey and South Dakota — have yet to even establish the rules for operating in their markets.
Just before this issue was released, Arizona announced a new interpretation of the approved cannabis legislation, designed to increase the state’s share of the cultivation marketplace. Regulators determined that in cases of a shared operation, where a medical cannabis operator is also behind a new recreational business, each part of the operation is entitled to its own offsite cultivation location. Beginning April 1st, these medical cannabis companies can apply for a second cultivation permit, without any state restrictions on the square footage of the area.
Multistate operators Harvest Health & Recreation and Curaleaf Holdings both have multiple medical cannabis dispensaries in Arizona and are suddenly benefiting from this unexpected reading of the law. So it’s clear that should the federal government finally legalize cannabis, Arizona wants to be a preferred home for such large-scale operations that want to ship across the nation.
Photo Credit: Gage Skidmore