Does Arizona Require a License to Distribute Marijuana and Marijuana Products?
Currently, Arizona does not issue a marijuana distribution license despite the legality of cannabis in the state. While the state recognizes the need for the distribution of marijuana after its legalization, it is currently illegal to do so. Marijuana distribution is officially known as marijuana delivery in Arizona.
According to Arizona Revised Statutes (A.R.S) Section 36-2850, marijuana delivery implies the transportation, transfer, or provision of marijuana or cannabis products to a consumer in a place other than the designated retail location of a licensed marijuana establishment. Per A.R.S Section 36-2854(C), until the Arizona Department of Health Services (ADHS) adopts rules permitting and regulating the delivery of cannabis by marijuana enterprises, delivery is unlawful under A.R.S Title 36, Chapter 28.2.
What Distribution Activities are Covered by Arizona Marijuana Distribution License?
As of June 2023, Arizona is yet to start issuing marijuana delivery licenses. As such, no distribution activity is covered currently. However, according to the Arizona Revised Statutes (A.R.S) Section 36-2854(D), on or after January 1, 2023 and no later than January 1, 2025, the Arizona Department of Health Services (ADHS) shall adopt rules to allow and regulate marijuana delivery by licensed marijuana establishments. These rules would require that marijuana delivery and the marijuana and marijuana products to be delivered originate from a designated retail location of a licensed marijuana establishment. However, this will apply only after a consumer makes an order with the marijuana establishment.
The rules to be adopted by the ADHS would limit the amount of marijuana and marijuana products based on the retail price that may be in a delivery van during a single trip from the designated retail location of a licensed marijuana establishment. Also, these rules will prohibit marijuana delivery to any property owned or leased by the United States, Arizona, Arizona Board of Regents, and a political subdivision of Arizona. The rules equally require that marijuana deliveries be made only by licensed marijuana facility agents in unmarked vehicles equipped with a global positioning system or any other similar location tracking system and video surveillance and recording equipment. Such vans must contain locked compartments in which marijuana and marijuana products must be kept.
While the delivery of recreational marijuana is currently prohibited in Arizona pending the enactment of a cannabis distribution law, the state does allow the delivery of medical cannabis. Medical marijuana cardholders can register with their local medical marijuana dispensaries and order cannabis online for delivery to their addresses.
Does Arizona Offer Transport-Only Distributor License?
It is still unlawful to distribute (deliver) recreational marijuana in Arizona. Hence, the state is not issuing any form of a marijuana distribution license at the moment. However, no later than January 1, 2025, the Arizona Department of Health Services (ADHS) will adopt rules to allow and regulate marijuana delivery by licensed marijuana establishments (A.R.S Section 36-2854(D)). The state will most likely begin the issuance of marijuana distribution licenses once the ADHS adopts such rules. Many expect Arizona to begin establishing the legal framework for recreational marijuana delivery in 2023.
How to Get Marijuana Distribution License in Arizona
Although the Department of Health Services (ADHS) is yet to adopt rules to regulate marijuana delivery by licensed marijuana establishments, the application process for a marijuana delivery license is expected to align with that of a marijuana establishment. Typically, an applicant will be made to apply electronically via the ADHS while providing the following information and documentation:
- Information in an ADHS-provided format, including:
- The proposed marijuana establishment’s legal name
- The physical address of the proposed marijuana establishment’s retail location
- The county in which the proposed marijuana establishment’s retail location is located
- The following information for the applicant:
- Name of the entity applying
- Type of business organization
- Arizona mailing address
- Telephone number
- E-mail address
- If the business is not a publicly traded organization, the name, birth date, and residence address of each principal officer or board member of the business
- For a publicly traded corporation, the name, home address, and date of birth of each board member or principal officer who is entitled to at least 10% of the profits of the proposed marijuana establishment
- Whether the applicant consents to allow the ADHS to submit supplemental requests for information
- A statement that the proposed marijuana establishment will not operate until it is inspected and obtains approval to run the establishment from the ADHS if issued a marijuana license
- An attestation that the license applicant understands and will comply with the provisions in A.R.S. Title 36, Chapter 28.2
- An attestation that information provided to the ADHS to apply for a marijuana establishment license is true and correct
- The signatures of each board member and principal officer of the proposed marijuana establishment and the date signed.
- Evidence that the license applicant is in good standing with the Arizona Corporation Commission (ACC)
- For each principal officer and each board member listed, documentation of the their marijuana facility agent license
- A statement, in an ADHS-provided format, signed within 60 days before the date of the application by a representative of the local jurisdiction:
- 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
- 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.
- The following documentation from an Arizona financial institution or an out-of-state financial institution, as defined in A.R.S. Section 6-101:
- A written statement, in an ADHS-provided format, signed within 30 calendar days before the date of the application by a representative of the in-state financial institution or out-of-state financial institution, as applicable, confirming that the applicant or a principal officer or board member of the applicant has at least $500,000 in liquid assets, as defined in A.R.S. § 6-851, in the name of the applicant or a principal officer or board member of the applicant
- Documents bearing the name of the applicant or a principal officer or board member of the applicant supporting that the $500,000 has been under the control of the applicant, principal officer, or board member of the applicant for a minimum of 30 days before the date of the application
- Proof 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 can apply to get an initial marijuana establishment license by electronically submitting to the ADHS during an open application period, in a Department-provided format, the following:
- An attestation from each principal officer and each board member approving the application for a marijuana establishment license
- The license number on the applicant’s dispensary registration certificate
- Proof of fee payment
To secure approval to operate a marijuana establishment in Arizona, a principal officer or board member of the entity holding a marijuana establishment license must electronically submit to the ADHS, within 18 months after obtaining the license, the following:
- Information in an ADHS-provided format, including:
- The marijuana establishment’s name, license number, and the physical address of its retail outlet
- The State Department of Revenue-issued Transaction Privilege Tax Number of the marijuana establishment
- The marijuana establishment’s proposed hours of operation
- Whether the marijuana establishment agrees to permit the ADHS to submit supplemental requests for information
- Whether the marijuana establishment’s retail location is ready for an inspection by the ADHS
- If the marijuana establishment’s retail premises is not ready for an inspection by the ADHS, the date the marijuana establishment’s retail location 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 principal officer and each board member of the marijuana establishment and the date signed
- 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 list of which of the following activities the marijuana establishment is requesting approval to provide at the retail location:
- Preparation of edible marijuana products
- Manufacturing of marijuana products
- (Delivery service may be added once the ADHS adopts rules to regulate marijuana delivery by marijuana establishments)
- If requesting approval to prepare edible marijuana products, a copy of the marijuana establishment license or permit of that location as a food establishment per 9 Arizona Administrative Code (A.A.C) 8, Article 1
- A site plan of the marijuana establishment’s retail location showing streets, property lines of the contiguous premises, buildings, parking areas, outdoor areas if applicable, fences, security features, fire hydrants if applicable, and access to water mains
- A floor plan of the marijuana establishment’s building
Interested persons or entities will be required to apply via the Marijuana Facility License Portal unless the ADHS provides an alternative option by the time it adopts rules to regulate marijuana delivery in the state. The Department 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.
How Much Does Marijuana Distribution License Cost in Arizona?
The Department of Health Services (ADHS) will advise the public of the cost of adding a marijuana delivery service to a marijuana establishment license once it adopts rules to regulate marijuana delivery service. However, an initial non-refundable license fee of $25,000 is required to obtain a marijuana establishment license in Arizona. The cost of renewal is $5,000. If Arizona chooses to have independent marijuana delivery services, these would only need to obtain a delivery/distribution license without paying for a marijuana establishment license.
Can Licensed Marijuana Distributors Also Get Other Cannabis Licenses in Arizona?
This will be possible if the Arizona Department of Health Services (ADHS) chooses to have fully integrated marijuana businesses under its marijuana establishment license once it adopts rules to regulate marijuana delivery. The licensee will have the right to cultivate, manufacture, sell, and distribute (deliver) marijuana under a single establishment license.