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How will medical marijuana dispensaries operate in Arizona after Prop 207?

For first time, House will vote on bill that would legalize marijuana on federal level
Posted at 5:26 PM, Nov 05, 2020
and last updated 2020-11-05 23:24:40-05

Marijuana will be the newest multi-million-dollar industry that is expected to grow exponentially in Arizona. With the legalization of cannabis by Arizona voters through Prop 207, already established medical marijuana dispensaries are expecting to see a big rise in sales, as the demand for cannabis grows.

However, before they can sell marijuana for recreational use, the businesses will have to be licensed by the state. The promise of brisk business has many, even those not in the marijuana industry, now wanting to get their foot in the door, but some feel those already in the game may get an unfair advantage by the state.

"We anticipate that all existing Harvest stores will be selling to existing customers sometime in the May/April timeframe," said Steve White, CEO of Harvest Health and Recreation, one of the largest medical marijuana dispensary operators, with 15 dispensaries located throughout Arizona.

The state will issue around 130 new licenses in counties with fewer than two dispensaries.

Current medical marijuana dispensaries will get to apply as early applicants.

Steve White is one of the biggest supporters of Prop 207 and even helped craft the initiative. In an interview with ABC15, White said there's a good reason the initiative calls on medical marijuana dispensaries in good standing with the state the first dibs on selling pot.

"In Arizona, we are leveraging the existing medical marijuana facilities to quickly get the program online so that an illicit market does not develop," said White.

He explained that they had spent a lot of time studying what went wrong in California, where the black market for pot surged after legalization, due to lack of any regulation by the state.

Despite the reasoning, some smaller dispensary owners and so-called "outsiders" who want to get into the industry believed this gave companies like Harvest Health and Recreation an unfair advantage to get licenses in place.

"I don't even know how to respond to that because it doesn't actually make sense to me. We are the largest provider of marijuana in the state, and we anticipate we will remain that, but that does not mean there won't be plenty of room for hundreds of other operators in Arizona," said White.

Justin Brandt, an attorney with the Scottsdale-based law firm Bianchi and Brandt specialized in representing Cannabis businesses all over the country. He said his phones have been ringing off the hook since Prop 207 got the green light from voters.

"Most of the calls are people wanting information on how to get in the industry. What that sort of application process is going to look like," said Brandt.

He added that one should really know what they're getting into, becoming an expert in the regulations surrounding the industry, and look at the project as an investment at first, if they were interested.

"The industry, it has significant barriers to entry. Being a cash-based industry requires a lot of capital if you're starting out," said Brandt.

With the drug still being illegal on a federal level, Brandt said one needed to really know the law, and those who were seriously interested in getting into the industry should consult an attorney before getting started.

The Arizona Department of Health Services will be in charge of setting up the application process and guidelines for this new industry. The application process is expected to start in January.