On December 11, 2020, the Arizona Division of Well being Companies (the “Division”) launched proposed laws for grownup use marijuana. Click on HERE to evaluate the proposed laws. This publish will focus on a number of the licensing and operational points for grownup use marijuana institutions. General, we like what we’re seeing thus far.

Earlier than diving in, it is very important be aware that the Division will settle for feedback HERE to the proposed laws for a really quick interval– till December 17, 2020. The Division has created an internet portal to submit feedback and questions. Additionally, the Division will maintain a public assembly to debate the proposed laws at 10 am (MST) on December 17, 2020. The decision-in and associated data might be discovered HERE.

With out additional ado, here’s a breakdown of the proposed regulation by subject.

Charges and Proof of Funds

Earlier than discussing a number of the licensing necessities, the brand new laws have varied monetary necessities to acquire an grownup use license. The preliminary licensing price for an grownup use institution can be $25,000, with a license renewal price of $5,000. A.A.C. §§ R9-18-102(4)(a) & (b). Furthermore, a proposed licensee will likewise want to supply proof that it has $500,000 in funds obtainable. A.A.C. § R9-18-303(A)(6).

Particular person Registration Necessities

As mentioned on our prior publish (click on HERE), sure people who’re both “principal officers” or “board members” will should be registered with the Division. The approval course of is a part of the registration course of for “marijuana facility brokers”. Facility brokers embrace principal officers, board members, and staff and volunteers at a marijuana institution. When it comes to “principal officers”, the Division defines who these people are by entity sort. A.A.C. § R9-18-301. For instance, if a company would be the licensee, then two people who’re officers of the company can be thought of “principal officers”.

Likewise, the proposed laws present steering on who board members are by entity sort. Along with these listed within the bylaws as board members for a company, the officers of the company are additionally thought of board members. A.A.C. § R9-18-301(B)(1). To qualify as a “facility agent”, such people should have an Arizona driver’s license, an Arizona identification card or some type of accredited identification, most of which should have been issued on or after October 1, 1996. A.A.C. § R9-18-201(2). So, it seems that solely Arizona residents could be a facility agent.

License Allocation Course of and Preferences

The Division has additionally proposed a license allocation course of if it receives extra functions than allotted underneath Proposition 207 (which is now Arizona regulation) for “early candidates”. The early utility interval will run from January 19, 2020 till March 9, 2021. Throughout that point, solely sure entities can apply for a license. For instance, an entity that already holds a medical marijuana license can be allowed to use for an grownup use license. For any entity that improperly applies in the course of the early applicant interval, the Division will return the applying and the applying price. A.A.C. § R9-18-302(C).

License Software Course of

Step one within the utility course of can be to use for an preliminary marijuana institution license. A.A.C. § R9-18-303. The proposed laws present a reasonably detailed listing of what an entity might want to submit as a part of this utility course of. For instance, the Division would require an announcement signed by a consultant of the native jurisdiction the place the entity will function – the consultant might want to certify that the proposed marijuana institution complies with any native zoning restrictions. A.A.C. § R9-18-303(A)(4). If the proposed licensee is a publicly traded firm, then the proposed licensee should disclose for every principal officer or board member who’s entitled to greater than 10% of the income the identify, residence, handle and date of delivery of delivery of every such principal or board member. A.A.C. § R9-18-303(A)(1)(f). For somebody who’s simply an proprietor and has no different function or place with a licensee, it seems that besides as famous above, there can be no approval or disclosure necessities for such homeowners.

Operational Allowing

As soon as an entity has been issued an preliminary marijuana institution license, it might then apply to function a marijuana institution. A.A.C. § R9-18-304. To take action, the institution should submit sure data to the Division. Amongst different issues, if the dispensary will promote edible merchandise, it should submit a duplicate of its meals institution license or allow. A.A.C. § R9-18-304(4). Furthermore, a flooring plan drawn to scale should even be submitted, which incorporates – (a) format and dimensions of every room, (b) identify and performance of every room, (c) location of every hand washing sink, (d) location of every bathroom room, (e) technique of egress, (f) location of every video digital camera, (g) location of every panic button, and (h) location of pure and synthetic lighting sources. A.A.C. § R9-18-304(6).

Operational Guidelines

The Division likewise submitted proposed laws for the administration and operations of a marijuana institution. A.A.C. § R9-18-308. An institution should be open a minimum of 30 hours per week between the hours of seven:00 a.m. and 10:00 p.m. A.A.C. § R9-18-308(A)(1)(a). The Division additionally requires sure insurance policies and procedures to be in place, which embrace insurance policies on job descriptions and stock management. A.A.C. § R9-18-308(A)(2). These insurance policies should even be obtainable on the institution’s retail location and should be reviewed and up to date (if obligatory) all the pieces 12 months. A.A.C. §§ R9-18-308(A)(3) & (4). The Division additionally requires assurances that sure laws are being enforced. For instance, the institution should be certain that principal officers, board members, staff and volunteers preserve a legitimate marijuana agent registration with the Division. A.A.C. § R9-18-308(A)(5).

Safety Necessities

The proposed laws additionally present very detailed safety necessities. A.A.C. § R9-18-312. One of many many safety necessities embrace sure insurance policies and procedures (a) that prohibit entry to the areas of the marijuana institution that comprise marijuana or marijuana merchandise and, if relevant, the marijuana institution’s cultivation website or manufacturing website to licensed people solely; (b) that present for the identification of licensed people; (c) that forestall loitering; (d) for conducting digital monitoring; and (e) for using a panic button. A.A.C. § R9-18-312(H)(2). Digital monitoring can even be required, and the Division supplied very exact necessities. For instance, a dispensary should have a minimum of one 19-inch or better call-up monitor and there should be a video digital camera at east level of sale location. A.A.C. §§ R9-18-312(H)(1)(c)(i) & (iv).

Subjects Not But Addressed

So what shouldn’t be but lined within the guidelines? Effectively, the proposed laws don’t cowl testing amenities – apparently the Division will launch these proposed guidelines someday sooner or later. Likewise, the proposed laws don’t focus on the brand new Social Fairness Alternative Program (“SEOP”), whereby the Division will problem a further 26 grownup use license. We count on testing facility and SEOP laws to be launched within the coming months.


In abstract, it will behoove anybody within the Arizona hashish trade to intently evaluate the proposed laws. Whereas remaining laws can be issued, we are inclined to doubt that they may endure vital modifications. The hashish trade is closely regulated and thus understanding the hashish legal guidelines and laws is paramount for anybody curious about opening and working a marijuana institution. Please attain out to us with any questions.