In December 2010, Arizona voters passed the Arizona Medical Marijuana Act (AMMA) and on November 3, 2020, voters approved a proposition that legalizes recreational cannabis. Recreational cannabis sales started in January 2021 and both programs, medical and recreational, have combined to $1.361 billion in cannabis sales in the first 12 months, including about $763 million in medical and $598 million in adult-use cannabis. 2022 generated $1.388 billion, including $507 million from medical cannabis sales and $881 million from recreational cannabis sales, with a growth rate of nearly 50%.

Arizona Cannabis Market

In Arizona, any business that wishes to sell medical marijuana or adult use marijuana products must first hold a license issued by the Arizona Department of Health Services (ADHS). Once the business has been issued a license from ADHS, the business can then apply for a transaction privilege tax (TPT) license with the Arizona Department of Revenue (ADOR). The following Arizona cannabis business licenses are available to apply for:

Adult Use Cannabis Business License.

1. A single retail location at which the licensee may sell marijuana and marijuana products to consumers, cultivate marijuana and manufacture marijuana products.
2. A single off-site cultivation location at which the licensee may cultivate marijuana, process marijuana and manufacture marijuana products, but from which marijuana and marijuana products may not be transferred or sold to consumers.
3. A single off-site location at which the licensee may manufacture marijuana products and package and store marijuana and marijuana products, but from which marijuana and marijuana products may not be transferred or sold to consumers.

Medical Use Cannabis Business License. A “nonprofit medical marijuana dispensary” is “a not-for-profit entity that acquires, possesses, cultivates, manufactures, delivers, transfers, transports, supplies, sells or dispenses marijuana or related supplies and educational materials to cardholders. A nonprofit medical marijuana dispensary may receive payment for all expenses incurred in its operation.”

Dual Cannabis Business License. “An entity that holds both a nonprofit medical marijuana dispensary registration and a marijuana establishment license.”