Arizona Marijuana Manufacturing License

Does Arizona Require a Marijuana Manufacturing License to Make Cannabis Products?

Arizona requires anyone or entity interested in manufacturing marijuana products to obtain a state license known as a marijuana establishment license. This license is all-encompassing, as it covers marijuana manufacturing, retailing, and cultivation. To play in the marijuana industry of Arizona legally, the Smart and Safe Act, otherwise known as Proposition 207, stipulates mandatory licensure. Proposition 207 established Arizona Revised Statutes (A.R.S) Title 36, Chapter 28.2 relating to the responsible recreational use and regulation of marijuana. A.R.S Section 36-2854 requires the Arizona Department of Health Services (ADHS) to adopt rules to implement and enforce A.R.S. Title 36, Chapter 28.2 for regulating marijuana, marijuana products, and marijuana establishments. According to A.R.S Section 36-2850(18), a marijuana establishment is any entity the ADHS authorizes to do the following:

• Run a single off-site location in which the owner can manufacture marijuana products, package, and store marijuana-infused products. However, marijuana and marijuana-infused products cannot be sold or transferred to consumers directly from such a facility.
• Operate 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.
• Operate a single retail location in which the licenses can cultivate marijuana, process marijuana products, and sell marijuana and marijuana-infused products directly to consumers.

In Arizona, a manufacturing site is a single off-site location that manufactures and packages marijuana products. It is also a place in which marijuana and marijuana products are stored for a marijuana establishment.

Does Arizona Require Licensed Cannabis Manufacturers to Have Cultivation Licenses?

In Arizona, the permit to manufacture marijuana products is bundled with cultivation and retail sales licenses as a marijuana establishment license. The state requires a vertical integration of marijuana manufacturing, cultivation, and distribution. As such, each marijuana manufacturer and grower is associated with a cannabis dispensary license in the state. The same vertical integration policy applies to nonprofit medical marijuana dispensaries. Arizona requires medical dispensaries to cultivate and manufacture the medical cannabis they sell.

How Does Arizona Classify Marijuana Manufacturing Licenses?

A marijuana manufacturing license in Arizona is embedded in a marijuana establishment license, a license that permits the cultivation and sales of marijuana alongside marijuana products manufacturing. Regardless of the production methods used by the manufacturing sites of licensed marijuana establishments in the state, they remain an integral part of the marijuana establishments.

What are the Different Types of Cannabis Manufacturing Licenses in Arizona?

Anyone with a marijuana establishment license in Arizona is authorized to manufacture marijuana products in addition to cultivating and selling marijuana. The marijuana establishment license is the only license that allows license holders to do so in the state.

Does Arizona Require a Separate License to Manufacture Edibles?

In Arizona, per 9 Arizona Administrative Code (A.A.C) 8, Article 1, a marijuana establishment that manufactures marijuana-infused edible products must also obtain a license or permit as a food establishment. If a marijuana establishment prepares cannabis-infused edible products, it must do so according to the applicable requirements in 9. A.A.C 8, Article 1.

How to Get a Cannabis Manufacturing License in Arizona

To get a permit to manufacture marijuana in Arizona, 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 through the Marijuana Facility License Portal. After this, they were given marijuana establishment licenses by random selection. Early applicants are entities seeking to operate a marijuana establishment in a county with less than two registered nonprofit medical marijuana dispensaries. They may also be registered nonprofit medical marijuana dispensaries that have good standing with the Arizona Department of Health (ADHS) and want to secure marijuana establishment licenses.

To apply for an Arizona initial marijuana establishment license in a bid to manufacture marijuana products, 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
    • Mailing address, telephone number, and e-mail address
    • Type of business organization
  • 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 applicant understands and will abide by all the requirements in A.R.S. Title 36, Chapter 28.2
  • The name, home address, and birth date 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 date of the license application:
  • Confirming the legal name of the marijuana establishment or identifying at least one principal officer or board member of the marijuana establishment
  • Certifying that the proposed marijuana establishment complies with any local zoning restrictions
• 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:
  • Documents showing 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
  • 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, as defined in A.R.S. § 6-851, in the name of the applicant or a principal officer or board member of the marijuana establishment
• 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 electronically submitting 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
• An attestation completed by each principal officer and each board member of the proposed marijuana establishment authorizing the application for a license
• Whether the applicant seeking approval intends to move the cultivation site under their marijuana dispensary registration certificate to the marijuana establishment license

It is also essential to get approval to run a marijuana establishment in Arizona. To do this, 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:

• A list of which of the following interests the establishment is seeking approval to provide at the retail location:
  • Manufacturing of marijuana products
  • Cultivation
  • Preparation of edible marijuana products
• 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
  • 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. If the marijuana establishment’s retail premises are 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 each of them appended their signature
• 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 floor plan of the marijuana establishment’s building
• A site plan of the marijuana establishment. 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 must be included in the site plan.

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). 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.

How Much Does a Cannabis Manufacturing License Cost in Arizona?

In Arizona, a marijuana establishment licensee that has the approval of the ADHS to operate can also manufacture marijuana products. An initial non-refundable license fee of $25,000 is required to obtain a marijuana establishment license. The cost of this license renewal is $5,000. To change the location of a marijuana establishment's manufacturing site, a licensee will pay $2,500. The cost of getting approval to add a marijuana manufacturing site to a marijuana establishment is also $2,500.