Arizona Cannabis License Guidelines

Arizona Department of Health and Human Service

Licensing and Enforcement Criteria:

Cannabis license applications are regulated by the Arizona Department of Health and Human Service (ADHS).

To become a cultivator in Arizona, you simply need first to become a dispensary. This can be done by application or after the fact but must be approved by the Department. The registration cost to become a dispensary in Arizona is $5000, with the renewal cost being $1000.

If you end up changing your dispensary location or end up adding a location, such as adding a cultivation site, then you will incur another cost of $2500. In total, becoming an Arizona cultivation license will essentially cost you $7500 at the initiation.

Arizona Cannabis Law & Compliance

Several laws and ordinances regulate the Arizona commercial cannabis industry, as well as the many different steps in the supply chain. These laws range over dispositions for cultivators, manufacturers, distributors and retail dispensaries. The most recent news can be found on these websites:

FAQ

How can I get a license in Arizona?

You must first contact the Arizona Department of Health Services (ADHS) to apply for a license. Once you receive your license to sell marijuana from ADHS,  you must apply for a license to report transaction privilege (TPT), excise and withholding tax by completing the Medical, Adult Use or Dual License Transaction Privilege/Use/Excise Tax Application.

What licenses do I need to operate a dispensary? (medical marijuana/adult use)?

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).

Even if a business already holds a TPT license, it should contact AZTaxHelp@azdor.gov to make the necessary changes to the license that will allow it to file and pay taxes on sales of marijuana products, which is new for 2021. This is true even for existing medical marijuana dispensaries that have been filing and paying TPT on their sales, because these sales must be reported under a new business code.

If the business holds an ADHS license that allows it to make adult use (non-medical) marijuana sales, the business must also register with ADOR to file and remit Marijuana Excise Tax (MET).

What does a “dual license” mean when licensing a marijuana establishment?

“Dual licensee” means an entity that holds both a nonprofit medical marijuana dispensary registration and a marijuana establishment license, both of which are issued by the Arizona Department of Health Services (ADHS). The term does not refer to any license issued by the Arizona Department of Revenue.

I own a marijuana dispensary. Can I make electronic payments?

Yes. Assuming your annual tax liability exceeds or will exceed $500, you are required to make electronic payments.  You can make electronic payments on AZTaxes.gov.  If you are unable to do so please contact the department for assistance.

Arizona Cannabis License Types

There are many different license types for cannabis in Arizona. We are here to help you understand which one is the best for you and your business.

Marijuana Establishment Licenses

The Marijuana establishment license authorizes to have a single retail location to sell, a single off site location to cultivate, process and produce and a single off site location to manufacture and package marijuana, the last two are not authorized to sell Marijuana in any manufacturing or cultivating location.

Arizona Revised Statutes (A.R.S.) § 36-2850(18) defines “marijuana establishment” as an entity licensed by the department to operate all of the following:

  • A single retail location at which the licensee may sell marijuana and marijuana products to consumers, cultivate marijuana, and manufacture marijuana products.
  • 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.
  • 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.

Marijuana Testing Facility Licenses

The Marijuana testing facilities license authorizes the analysis and monitoring of the potency of the product and testing for any harmful contaminant in the marijuana.

Dual Licenses

A dual licensee is an entity that holds both a Nonprofit Medical Marijuana Dispensary Registration Certificate and a Marijuana Establishment License.

A dual licensee may operate a single retail location where the licensee may dispense medical marijuana to registered qualifying patients and their designated caregivers, and sell marijuana to adults who are at least 21 years of age.

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