How to Open an Arizona Dispensary

How to Open an Arizona Dispensary

Do you want to learn how to open an Arizona dispensary? Arizona has one of the most robust medical weed markets in the nation. They’re not accepting licenses at the moment. However, it’s never too early to prepare for the next round of licenses. Plus, an adult-use pot measure is likely to pass during the 2020 ballot. That means more licenses will be available soon.

State of Arizona’s Weed Market

The state’s medical pot market has taken off like a rocket since its start. In 2019, the industry saw a gain of 21 percent in sales. That resulted in a total market value of $709 million. During the same year, the state had 15,059 full-time pot jobs. Weed legalization is likely in the near future. If the law passes, the job numbers are set to grow fast.

Voters passed the state’s medical cannabis act in 2020. The law allows patients to buy, possess, and consume weed. The Department of Health Services operates the medical program. Under the law, the number of licenses available is one for every 10 state pharmacies. Local governments can pass zoning restrictions for retail shops.

In 2019, Governor Ducey signed Senate Bill 1494 to reform the program. The bill requires all shops to test their products. Shops must test products for purity and potency. Labs will test for microbial contamination, heavy metals, residual solvents, pesticides, fungicides, and potency. The law takes effect on November 1, 2020. This increases the overhead costs associated with running a business.

Available Business License Types

Currently, the department is not accepting new weed business licenses. It’s important to know the types of licenses available. It can prepare you for the next round of licenses. Retail weed shops are vertically-integrated in the state. That means shops are in charge of the cultivation, manufacturing, and sale of weed products.

Steps to Qualify for a License

Right now, you can’t apply for a pot business license in the state. The department will come back with new licenses. The process may be different from the previous two rounds. During the first round of applications in 2012, the state issued licenses on a lottery system.  Applicants must have met the state requirements first. Each district, of the 131 in the state, had a separate lottery drawing.

During the second round of licenses, there wasn’t a lottery. The department picked a winner based on their proposed location. The winner had to have a location in an area that had the most patients in a 10-mile radius. For the next round of licenses, the process may change yet again. The changes will include the allocation of social equity applicant licenses.

Application Packet

Here’s what you can expect based on prior requirements. A license application fee is $5,000. A license renewal fee is $1,000. Stores must pay a $150 fee for every dispensary agent registration. All principal officers, board members, and employees must be registered. The main principal officer of the entity must have $150,000 in a financial institution.

The application must include specific information about your business. This includes the name and address for the store and grow site. Both locations must be at least 500 feet away from public or private schools. You must provide the name, address, and date of birth of each dispensary agent.

You’ll need to submit the operating procedures consistent with the department’s rules. These include record-keeping and security measures. Is your location in a city with zoning rules? You must get a sworn statement certifying your shop is compliant with the zoning rules.

Cultivation

You can add a cultivation site location when submitting an application. A cultivation site can be changed or added for a $2,500 fee. Up to one site can be added per shop. You must submit the facility and operating plans of the grow site.

Infused Products

If you plan on producing edibles of any kind, you need to complete an Infusion Kitchen Application. You must submit facility and operating plans including the store’s intended menu. You must submit the expected volume of food to be stored, prepared, and sold.

If your kitchen is under construction, you need to submit a few things. This includes a layout of your area, mechanical schematics, and finish schedules. The kitchen equipment must be certified by an accredited sanitation certification program. You must provide standard operating procedures that meet the state rules.

New Ballot Initiative for Legal Weed

For the 2020 November ballot, residents will be able to vote for legal weed. The adult-use program will likely have the same vertical-integration system as the medical weed program. The law allows for the issuance of delivery licenses starting in 2024.

Medical weed shops may be given priority. They will be first in line to obtain adult-use store licenses. The department must allocate about 26 social equity licenses. Regulations for these are still up in the air. The department is set to issue new licenses as the pharmacy count in the state grows.

As the number of registered stores increase, so do the number of licenses. It’s all a waiting game for now. Preparing for the next round is critical. It’s not clear when the department will begin issuing the new licenses. It may be within a year or two.

Arizona Cannabis College

CTU’s online cannabis college is your one-stop-shop for all things weed. If you’re an entrepreneur, the training program is right for you. We cover state pot laws, how to start your own business, and more. Our courses prepare you for a smooth transition into the competitive market.

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