While Arizona has had a legal medical marijuana program since 2010, it became the 13th state to legalize recreational cannabis in November 2020 with the passing of Prop 207 by 60% of the votes. To date, 73 licenses have already been granted by the Arizona Department of Health, and sales officially began on January 22, 2021. Adults 21 and older in Arizona can now legally possess up to one ounce of cannabis.
It’s important to note, though, that caps on total licenses and stiff competition from multi-state operators may make it tough for you to enter the Arizona cannabis market. Still, if you’ve ever considered opening a dispensary in Arizona, now is a great time to look into the process.
Applications
While Arizona officially began accepting applications for recreational dispensaries in January 2021, only those who own existing medical dispensaries or plan to open a recreational dispensary in a county with fewer than two registered medical dispensaries are able to apply at this time. If you fit this description, you can apply using the ADHS Facility Licensing Portal.
However, the state is also giving out 26 more “social equity recreational licenses.” These licenses are expected to go to entrepreneurs who have been disproportionately impacted by the law enforcement of previous cannabis laws, including minorities, people previously charged in low-level drug crimes, and business owners in low-income areas.
To apply, you’ll need:
- Approval from your local jurisdiction
- At least $500,000 in liquid capital (View all application fees here)
- Control of a dispensary location
- Your company’s by-laws
- Policies and procedures for patient record keeping, inventory control, and patient education/support
- A business plan with projected expenses before and after launch, revenue projections, site floor plans, and job descriptions
It can take a significant amount of time to create and gather all the documents you need, so get started now.
Capital
As we mentioned, you’ll need to be able to show that you have at least $500,000 in liquid capital in order to apply for a license. Thinking of purchasing an existing medical marijuana license instead? You’ll likely need $5-10 million dollars for that.
This amount of cash might be tough to get since most investment firms and banks avoid funding cannabis companies. To get together the capital you need, consider getting investments from friends, family members, angel investors, or cannabis-friendly investment firms.
Staffing for Cannabis
As part of your application process, you’ll need to submit job descriptions. You’ll likely also need to provide background checks to register all of your expected employees. For medical dispensaries, these ID cards cost $500 an employee, and the same is to be expected for recreational dispensaries.
When planning for staff, have a hiring plan to seek out trained and experienced budtenders to provide customer service and staff your dispensary. These employees should be able to knowledgeably answer customers’ questions, including questions regarding different strains, cannabinoid content, and terpene profiles.
Who else will you need to hire? Security guards, one or more managers, an accountant, a custodian, and a marketing specialist.
Getting Product
What are you going to sell? Cannabis flower, concentrates, and edibles? What about capsules and tinctures? Will you sell CBD only or THC products, too? How about accessories? You’ll need cultivators, distributors, and manufacturer relationships in order to purchase the products you plan to sell in your dispensary.
When determining the products you’ll stock, consider your audience’s needs, which can be drastically different depending on whether you plan to market your products to the medical community, to beginners, or to long-term users. Don’t forget to do your research to determine the types of cannabis allowed in Arizona.
Compliance Considerations
The cannabis market is one of the strictest sectors you can get into, so expect to follow a high standard for legal compliance. Expect to satisfy stringent security and safety requirements not only during the application phase but also on an ongoing basis. You’ll have to follow requirements for:
- Age
- Potency
- Staffing/Background checks
- Residency
- Location/zoning
- Inventory control
- Packaging
- Cleaning
- Patient profiles
You can find all regulatory requirements here.
When it comes to location, it’s also important to note that, while recreational cannabis was legalized at the state level, it doesn’t mean that it will be legal at the city level. In fact, some cities (like Scottsdale) have already preemptively banned new recreational dispensaries.
How to Market a Cannabis Dispensary in Arizona
Marketing and advertising are also heavily regulated in the cannabis industry, so you’ll need to tread carefully when marketing your new dispensary or products. From the signs you can put out front of your dispensary to the channels you’ll be able to advertise on, you’ll have many regulations to follow.
When you’re in such a strictly regulated industry, it pays to work with a specialized digital marketing agency that has the experience and expertise to market dispensaries while staying in compliance with local laws. The right agency can help you stand out from your competition online and off, while helping you generate more business and gain customer loyalty.
Book a consultation with Mary Jane Marketer, a full-service cannabis marketing agency that can do it all from strategy and branding to website design, social media, and paid media. Set up your new dispensary for success from the start.