Recreational marijuana sales start in Arizona

Business News | 15 Feb |

Recreational marijuana sales have officially started in Arizona.

“We are thrilled to record the first sale and begin offering access to regulated and legal cannabis products to recreational customers on this historic day in Arizona,” said Steve White, CEO of Arizona-based Harvest Health & Recreation Inc, a vertically integrated cannabis company and multi-state operator in the U.S. “Initial sales commenced only 80 days from the election and 54 days after the election was certified, representing by far the fastest launch to date in history. The Department of Health Services did an incredible job expediting this process, helping operators like Harvest sell recreationally to Arizonans 21 years of age and older. We look forward to serving both medical patients and recreational customers across the state at our retail stores.”      

Harvest currently operates 15 dispensaries in Avondale, Casa Grande, Chandler, Cottonwood, Glendale, Guadalupe, Lake Havasu, Mesa, Peoria, Phoenix, Scottsdale, Tempe, and Tucson and is supported by cultivation facilities in Camp Verde, El Mirage, Phoenix, and Willcox and processing facilities in Flagstaff and Phoenix.

Recreational use of marijuana became legal in Arizona thanks to the easy passage of Proposition 207.

The measure – approved by more than 60% of voters on Nov. 3 – decriminalizes recreational marijuana use and possession for those 21 or older; allows minor, nonviolent marijuana offenders to petition to have their criminal records expunged; and imposes an excise tax to support underfunded programs across the state.

“Arizona’s move to legalize the adult use of recreational marijuana is a defining moment for the state, and Curaleaf couldn’t be more excited to be part of this historic moment,” said Steve Cottrell, president of Curaleaf Arizona. “Since the passing of Prop. 207 in November 2020, our team has been laser-focused on ramping up our plans to enter the state’s adult use market. We look forward to being one of the first operators to provide Arizonans with tested, high-quality recreational cannabis products today. Curaleaf has eight state-of-the-art medical dispensaries in Arizona located in Phoenix, Gilbert, Glendale and Youngtown, and we are proud to announce that the ADHS approved all eight of our recreational license applications so we can meet the new consumer demand.”

Many Arizona dispensaries have been preparing for this huge development for the cannabis industry for a long time. Licensed dispensaries received approval on Jan. 22 from the Arizona Department of Health Services to begin serving adult-use cannabis and other products like Delta-8 gummies to consumers.

One of those dispensaries is Curaleaf, which has eight locations in Arizona. 

“Currently we have about 228,000 patients and while they have been enjoying the benefits of this magical medicine for quite some time, getting the opportunity to open it up to the adult population is going to be thrilling,” said Cottrell. “It’s been on our radar since 2010 and 11 years later we’re here, this is an exciting moment for the state and the Department of Health Services have put together a program that is second to none. We’re excited for the future and the program we have in front of us,” Cottrell said.

“The legal use of recreational sales for the industry is significant to the extent that we’ve now opened up a whole new market, a new customer base that we didn’t have before, with that, you’ve generated more capital which may attract more investment and increase job growth in the state,” said Greta Brandt, president of The Flower Shop, a  vertically integrated cannabis company with three dispensary locations in Arizona.

Both Cottrell and Brandt say dispensaries are anticipating serving three times the amount of current customers, which Brandt estimates to be about 3 million, and expect long lines for some time. Brandt acknowledged that since demand is extremely high, supply could be tight short term.

In addition, Cottrell said preparation for the legalization has happened over the last 11 years, as “dispensaries will still carry high dose edibles for medical patients, but now those same edibles will be made into a lower dose for the adult-use customer with the same great flavor and taste, just less medicine in it,” Cottrell said.

The passage of Proposition 207 in November 2020, known as the Smart and Safe Arizona Act,  legalized recreational marijuana for adults 21 and older to possess 1 ounce of marijuana with no more than 5 grams of it being marijuana concentrates (extracts). In addition, a 16 percent excise tax is placed on the sale of recreational marijuana products, with that money going towards funding for various state agencies.

The economic impact it will have on the state will be massive. Cottrell said over the next year, the tax and licensing fees are projected to generate $166 million in annual revenue, with the first $19 million going towards the Arizona Department of Health Services and afterward, $15 million will go towards the Arizona Teachers Academy Fund and $10 million will go towards the Governor’s Office of Highway Safety for grants to reduce impaired driving.

“We’re going to see 33 percent of the revenue going towards community colleges; almost 32 percent is going to local law enforcement and fire departments; 25 percent is going to state and local transportation programs; and 10 percent is going to public health and criminal justice programs,” Cottrell said.

As other states have launched recreational sales, Brandt said not only are there economic benefits, but as a result, the industry is creating tons of new jobs and will be poised to grow year-after-year, including in Arizona.

Cottrell said Curaleaf Arizona currently has 420 employees and are anticipating bringing on an additional 150 employees over the next year, which is exciting as Curaleaf and 130 other dispensaries in Arizona will be adding more job opportunities.

“There are going to be eight more dispensaries this year that will be allocated by the Arizona Department of Health Services,” Cottrell said. “Over the next two years, we’ll see an additional 20 dispensaries, after that, that will be the cap, which will be about 150-160 dispensaries in Arizona period. These licenses are limited; Arizona’s process has been put into place by some very good lawmakers, they have done a great job putting this program together and operating it, we could not be happier with the way the program exists right now.”

In addition, Cottrell said the passing of Prop 207 will impact social justice in Arizona. “Cannabis is officially decriminalized in Arizona, which means people will not be prosecuted for cannabis infractions of anything under an ounce. That’s a very important thing; we have hundreds of thousands of people yearly who are prosecuted for possession of cannabis, so this is going to be a positive change,” Cottrell said.

Brandt said the impact the legalization of recreational marijuana in some states has on the industry as a whole is significant. “A huge, positive movement for the industry is for marijuana to become a mainstream health and wellness solution,” Brandt said. 

Cottrell echoed Brandt’s thoughts, with the hope that with more education, people will see cannabis in a positive light. “I feel that over time, the more people become educated about the wonders and things that this plant does for them, more people will start using this plant, whether it’s in a topical form or edible form or vaping products.”

“For Arizona, being able to compete by providing taxable dollars to the state as well as competing with the black market to essentially eliminate it, which is our hope as operators, will bring stability to the state,” Brandt said.

“I think the stability of recreational cannabis is the next step of legitimizing this industry, hopefully that would then deschedulize the drug from a Schedule I to Schedule II classification, which will open up traditional banking opportunities and traditional investment opportunities that we’re not able to access today,” Brandt said. “I think those are extremely important things from a business standpoint, business owners to be able to grow this business, grow the industry here in the state, those are things that are key to be able to develop and we’re hoping that does happen on the federal level.”

“Curaleaf is very proud of what we’re doing across the country, right now we’re in 23 states and we’ve taken the position that we’re here to improve lives by providing clarity around cannabis and confident around consumption, and that’s a really important thing for people to understand when they’re experiencing this wonderful product,” Cottrell said.

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