Arizona Marijuana Cultivation License

Does Arizona Require Marijuana Growers to Obtain Cultivation License?

Yes. Arizona requires anyone or entity intending to grow marijuana commercially in the state to obtain a marijuana establishment license. Arizona Revised Statutes (A.R.S) Section 36-2850(18) described a marijuana establishment as any entity authorized by the Arizona Department of Health Services (ADHS) to run the following facilities:

• A single off-site growing location in which the marijuana establishment license holder can grow marijuana, process marijuana, and manufacture cannabis-infused products. However, this facility cannot transfer or sell marijuana and marijuana products to final consumers.
• A single retail spot in which the license holder can cultivate marijuana, process marijuana products, and sell marijuana and marijuana-infused products directly to consumers.
• A single off-site location in which the licensee can manufacture marijuana products, package, and store marijuana-infused products. However, marijuana and marijuana-infused products cannot be sold or transferred to consumers from this facility.

The Smart and Safe Act, otherwise known as Proposition 207, permits adults 21 years or older to cultivate up to six cannabis plants (two or more adults in the same residence can only grow a maximum of 12) at home for personal and recreational use. Similarly, under the Arizona Medical Marijuana Act (Proposition 203), a registered medical patient can grow up to 12 marijuana plants at home for personal medical use if they live more than 25 miles from the nearest marijuana dispensary. However, these plants must be kept away from public view, preferably in locked containers. The same applies to commercial marijuana growers as they cannot cultivate the plants just anywhere. They can only grow marijuana plants in an enclosed and adequately secured space. Such individual growers do not need to obtain cultivation licenses in Arizona.

What Are the Different Types of Cultivation Licenses in Arizona?

Arizona only has one type of license that allows interested persons or entities to cultivate marijuana, and that is the marijuana establishment license. However, to become a marijuana grower in Arizona, a person needs to own a dispensary. Technically, Arizona only has a dispensary license available as far as marijuana facilities are concerned. However, the state has registration options that allow licensees to grow marijuana. This option requires interested persons to submit supplementary applications for growing marijuana.

The Arizona Department of Health (ADHS) approves and inspects cultivation sites, without which registered entities cannot begin operations. In Arizona, a marijuana cultivation site must not operate outside its approved dispensary location and must fulfill every ADHS's requirements before growing marijuana.

Who Can Grow Marijuana in Arizona?

In Arizona, the license to grow marijuana on a commercial scale is issued to adults 21 years and older who must have been residents of the state for at least three years before the application date. Medical dispensaries that also have marijuana growing operations must hire Arizona-licensed doctors to help with the running of their cultivation sites.

To work at any state-licensed marijuana establishment in Arizona, a person must possess a valid marijuana facility agent license. Typically, a marijuana facility agent is an individual (employee, board member, principal officer, or even a volunteer) of a marijuana establishment who is 21 years or older without a conviction on an excluded felony offense.

Furthermore, Arizona marijuana law permits registered medical patients to grow up to 12 marijuana plants at home for personal use. However, such patients must live more than 25 miles from the nearest marijuana dispensary. Furthermore, Proposition 207 allows adults 21 years and older to cultivate marijuana up to six plants (or a maximum of 12 in households with two or more adults) for recreational purposes.

How to Get a Marijuana Cultivation License in Arizona

To apply for an Arizona marijuana growing license, a person or an entity must first become a dispensary. Arizona issued marijuana businesses licenses between January 19th, 2021, and March 9th, 2021 to early applicants who applied via the Marijuana Facility License Portal. After this, they were given marijuana establishment licenses by random selection. Early applicants are persons or entities that aim to operate a marijuana establishment in a county that has less than two registered active nonprofit medical marijuana dispensaries. They may also be registered nonprofit medical marijuana dispensaries that have good standing with the Arizona Department of Health (ADHS) that want to secure marijuana establishment licenses. Having a good standing means that a person or entity interested in obtaining a marijuana establishment license is not subject to a pending Notice of Intent to Revoke emanating from the ADHS.

To obtain an initial marijuana establishment license in a bid to cultivate marijuana, an applicant must electronically submit to the ADHS, during an open application period, the following:

• Information in a style provided by the ADHS, including:
  • The legal designation (name) of the proposed marijuana establishment
  • The county in which the applicant proposed to have the marijuana establishment
  • The location address of the proposed marijuana establishment
  • The following applicant’s information:
    • Name of the entity
    • Type of business organization
    • Mailing address, telephone number, and e-mail address
  • The name, birth date, and residence address of each principal officer or board member, if the business is not a publicly-traded company
  • An attestation that information provided to the ADHS during the application process is true and correct
  • Whether the applicant agrees to allow the ADHS to request additional information
  • A declaration that, if they are issued a marijuana establishment license, the proposed marijuana establishment will wait for inspection and obtain approval from the ADHS before operating the proposed marijuana establishment
  • An attestation that the license applicant understands and will abide by all the requirements in A.R.S. Title 36, Chapter 28.2
  • The name, birth date, and residence address of each principal officer who is eligible to get at least 10% of the profit of the proposed establishment if it is a publicly-traded organization
  • The signatures of each board member and principal officer of the proposed marijuana establishment and dates signatures were appended
• A signed and dated statement in an ADHS-provided format by a representative of the municipality within 60 days before the application date:
  • Certifying that the proposed marijuana establishment complies with any local zoning restrictions
  • Confirming the legal name of the marijuana establishment or identifying at least one principal officer or board member of the marijuana establishment
• The marijuana facility agent license documents of each principal officer or board member listed on the board of the company
• The following documentation from an Arizona financial institution or an out-of-state financial institution, as defined in A.R.S. Section 6-101:
  • Written communication by an official of an in-state financial institution or an out-of-state financial institution (whichever is applicable), in an ADHS-provided format, signed within 30 days before the date of the application, stating that the applicant or a principal officer or board member of the proposed establishment has at a minimum, $500,000 in liquid assets, per A.R.S. § 6-851, in the name of the applicant or a board member or a principal officer of the marijuana establishment
  • Documents bearing the name of the license applicant or a principal officer or board member of the applicant proving that the $500,000 has been under their control for a minimum of 30 days before the date of the application
• Proof that the applicant has a good standing, which can be obtained from the Arizona Corporation Commission (ACC)
• Documentation, in an ADHS-provided format, of:
  • The proposed marijuana establishment physical location ownership, signed and dated within 60 days before beginning application.
  • Consent by the landlord of the physical location of the proposed marijuana establishment authorizing the marijuana establishment license applicant to operate a marijuana establishment at the proposed address, signed, notarized, and dated within 60 calendar days before the day of application.
• Evidence of paying the application fee for a marijuana establishment license

Except as specified by state rules, before an entity with a marijuana establishment license begins operating a marijuana establishment, they must apply for and obtain approval to operate a marijuana establishment from the ADHS. An applicant that has a valid dispensary registration certificate issued by the ADHS may apply for an initial marijuana establishment license by submitting their application electronically to the ADHS during an open application period, in a Department-provided format, the following:

• The license number on the dispensary registration certificate issued to the applicant
• Evidence of paying the application fee for a marijuana establishment license
• Whether the applicant seeking approval intends to move the cultivation site under their marijuana dispensary registration certificate to the marijuana establishment license
• An attestation completed by each principal officer and each board member of the proposed marijuana establishment authorizing the application for a license

In a bid to get approval to run a marijuana establishment in Arizona, a principal officer or board member of the business holding a marijuana establishment license must submit the following to the ADHS within 18 months after the marijuana establishment license has been issued:

• Information in an ADHS-provided format, including:
  • The marijuana establishment’s name, license number, and the physical address of its retail location
  • The Arizona Department of Revenue-issued Transaction Privilege Tax Number of the marijuana establishment
  • If the marijuana establishment’s retail premises is not ready for an inspection by the ADHS, the date it will be set for a physical assessment by the Department
  • An attestation that the information provided to secure approval to operate a marijuana establishment is accurate and verifiable
  • The signature of each board member and principal officer of the marijuana establishment and the date each of them appended their signature
  • The marijuana establishment’s proposed hours of operation
  • Whether the marijuana establishment will allow the ADHS to submit additional requests for information
  • Whether the marijuana establishment’s physical address is ready for an inspection by the ADHS
• A list of which of the following interests the establishment is seeking approval to provide at the retail location:
  • Cultivation
  • Manufacturing of marijuana products
  • Preparation of edible marijuana products
• A copy of documentation issued to the marijuana establishment by the local jurisdiction authorizing it to occupy the physical address and operate as a marijuana establishment. Such documentation includes a certificate of occupancy, a special use permit, or a conditional use permit
• A site plan of the marijuana establishment. Property lines of the contiguous premises, streets, buildings, fences, parking areas, outdoor areas if applicable, security features, access to water channels, and fire hydrants, if applicable, must be included in the site plan.
• A floor plan of the building where the marijuana establishment is located

A person or entity interested in getting a marijuana establishment license in Arizona must apply via the Marijuana Facility License Portal. The ADHS provides further instructions for logging into the Marijuana Facility License Portal to apply for a marijuana establishment license. After providing the essential information and uploading all the required documents, applicants should review the application details and submit them. The overall time frame for applying for a marijuana establishment license in Arizona is 60 business days (30 days for administrative completeness and another 30 for substantive review by the ADHS). For approval to operate as a marijuana establishment, the overall application time frame is 90 working days (30 days for administrative completeness and 60 days for substantive review by the ADHS).

Arizona marijuana cultivation licenses are not always available. The ADHS accepts applications for new licenses when it decides the state needs to expand its medical marijuana program. It makes announcements calling for new applications when it needs to add new dispensaries. The most recent call for applications occurred in December 2022 as the ADHS sought to have medical dispensaries in six counties (Apache, Cochise, Gila, Graham, Greenlee and Santa Cruz ) where none existed. Successful applicants were selected in March 2023.

How Much Do Marijuana Cultivation Licenses Cost in Arizona?

A marijuana establishment license in Arizona allows the license holder to have a single off-site location to cultivate marijuana, process, and produce marijuana products. It also authorizes them to own a single retail location to sell marijuana products and a single off-site location to manufacture and package marijuana.

For a marijuana establishment license, the initial non-refundable license fee is $25,000, while the cost of renewal is $5,000. To change the physical address of a marijuana establishment's cultivation site, the licensee will pay $2,500. Also, adding a cultivation site to an existing marijuana establishment costs $2,500. Online payment is processed through the ADHS for all applications requiring a fee.

Can Licensed Marijuana Cultivators Hold Other Cannabis Licenses in Arizona?

Yes. Currently, the Arizona Department of Health (ADHS) does not authorize a marijuana cultivation facility unless an entity gets licensed as either a marijuana dispensary or a marijuana establishment. It implies that an entity that has the approval to grow marijuana in the state already has the state permit to operate a marijuana establishment facility or a marijuana dispensary.

In Arizona, an entity that has a marijuana establishment license can grow marijuana, process it, and sell marijuana-infused products. A marijuana establishment license is all-encompassing, provided the license holder obtains the requisite approvals from the Arizona Department of Health Services (ADHS) to carry out the activities embedded in the license.