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In 2010, voters passed Proposition 203, the Arizona Medical Marijuana Question. Qualifying patients and caregivers may purchase, possess, and consume medical marijuana obtained from a nonprofit, state-licensed dispensary. 


Adult-use marijuana is prohibited in Arizona.


The Arizona Department of Health Services (ADHS) runs the medical marijuana program. The number of nonprofit dispensary licenses available is one (1) license for every (10) Arizona pharmacies. Local governments may pass zoning restrictions.


Arizona medical marijuana businesses must be nonprofits. 


In 2019, Gov. Ducey signed Senate Bill 1494. Beginning on November 1, 2020, all dispensaries must  test their products for microbial contamination, heavy metals, pesticides, herbicides, fungicides, growth regulators and residual solvents, as well as for potency. 


Additionally, licenses for qualifying patients issued as of August 27, 2019 now expire after two years instead of one.


As of 2019, extracts are legal to sell at licensed dispensaries. 


Key Dates

December 1, 2019: Electronic Patient Cards became available


April 1, 2020: New Dispensary Licenses awarded


November 1, 2020: Testing results must be available to patients from dispensaries


  • Application Fees/Start up costs

  • Application fee: $5000

  • Annual renewal fee: $1000

  • Dispensary agent registry fee: $150

Available License Types

In Arizona, dispensaries are vertically integrated entities, and are responsible for aspects of cannabis cultivation, manufacture, and sale to patients. In 2019, Senate Bill 1494 established priority licensing for new dispensaries for certain locations. There are currently 94 licensed dispensaries operating in Arizona. For the previous round of licenses issued in 2016, there were over 750 applications for a total of 31 licenses. 

  1. Qualifying Conditions 

    • Alzheimer’s disease

    • Amyotrophic lateral sclerosis (ALS)

    • Cancer

    • Crohn’s Disease

    • Glaucoma

    • Hepatitis C

    • HIV/AIDS

    • Post-traumatic stress disorder

    • Chronic medical conditions or disabilities, with treatable symptoms including but not limited to:

      • Cachexia, or wasting syndrome

      • Seizures

      • Severe and chronic pain

      • Severe nausea

      • Severe or persistent muscle spasms

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Estimated market size

As of October 2019, there were 205,104 qualified patients in Arizona with licenses to purchase medical marijuana from state-licensed nonprofit dispensaries. Sales grew by 42% in 2018, with 61 tons of marijuana sold, representing an estimated total revenue of $400 million. Sales of edible products and other concentrated forms of consumption grew by 55%, while dried flower sales grew by 40%.

how to start a marijuana business arizona

If you are just starting your marijuana business, the next best step is to start a Business Plan to help educate your team and be ready to apply for a marijuana business license. If you are ready to apply for a Marijuana Business License in Arizona, please Contact us or call our offices to set an appointment to get started. You can also select another State Opportunity, or fill out our Contact Form to discuss potential strategies such as Investment or Partnership Opportunities. 

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