Recreational marijuana sales could start this week in Ariz.
Marijuana sales to anyone 21 or older in Arizona could start within a day or two, with state health officials telling dispensaries they are poised to issue licenses for recreational sales.
The first stores able to sell recreational marijuana and marijuana products, such as vape pens and gummy edibles, are existing medical-marijuana dispensaries. Some of those businesses said Tuesday they are awaiting approval from state regulators to show up online so they may open their doors to anyone with a state-issued ID.
“I’m sitting here at my computer hitting refresh, refresh,” said Raúl Molina, a partner and senior vice president of operations for The Mint dispensaries in Mesa and Guadalupe.
A spokesman for the Department of Health Services said 40 medical dispensaries had applied to sell recreational marijuana as of Tuesday afternoon.
The quick turnaround for licenses was unexpected by some dispensary owners, who anticipated the state agency would use the full amount of time given under the law to approve applications, meaning recreational sales wouldn’t begin until March or April.
About two-thirds of dispensaries in the state have yet to make an application, meaning their competitors will have a jump on them in attracting the recreational market.
Molina said he is ready to begin sales as soon as he gets the OK, and that officials with the Department of Health Services told him it could come at any time.
“I am so ready,” Molina said, adding that he has submitted documents to the state for his employees to work in a recreational dispensary, stocked childproof packaging, added cash registers and programmed them to add the appropriate tax to recreational sales, and bought an additional 800 pounds of marijuana in the past month to meet the anticipated demand.
“We expect rushes like 4/20 (April
20) for probably like 10 to 30 days straight,” he said. “Basically it’s going to be 4/20 for a full month.”
Molina said he has dedicated registers for medical-marijuana patients to prevent a displacement by new recreational customers.
Arizonans approved Proposition 207 in November, legalizing adult use and possession of marijuana. The measure also allowed the state’s 120 or so operating medical-marijuana dispensaries to apply for a license to sell to any adult, not just those who have a state-issued medicalmarijuana card.
Staggered openings for dispensaries
Molina said the industry expects dispensaries to open to retail sales gradually, not all at once.
“It is not going to be an everyone at once scenario, it will be an everyone who is ready scenario,” he said.
The state must issue recreational licenses to any medical dispensary in good standing with regulators within 60 days of getting the application, but the Department of Health Services said in an email to applicants that it probably won’t take that long.
“We are excited to launch the Adult-Use of Marijuana Program and are expecting a smooth Go-Live,” the DHS said in a Friday email to dispensaries, which was shared with The Arizona Republic.
It said adult sales could begin “as soon as late January.”
DHS spokesman Steve Elliott said Tuesday that the agency was reviewing the 40 applications that had come in starting at 3:30 a.m..
“We’re not able to provide an ETA, but we have communicated to the industry that we have the systems and processes to move these applications through promptly as long as they are complete,” Elliott said.
“Existing medical marijuana dispensaries, once their applications are approved by ADHS, can legally begin selling marijuana to adults who are at least 21 years old,” Elliott said. “That doesn’t necessarily mean they open right then, since they may need inventory, staff, (Arizona Department of Revenue) paperwork. But they’re legal with our approval.”
The agency has told dispensaries the approvals should be swift, said Ryan Hurley, an attorney for Copperstate Farms, which has four affiliated Sol Flower dispensaries in the Phoenix area.
“The application is extremely limited with very little information for existing dispensaries,” he said, adding that agency officials have said it could take just 48 to 72 hours to approve applications.
Hurley said Sol Flower submitted applications for three of its dispensaries on Tuesday and planned to submit the fourth by 5 p.m., but even if sales were approved this week, it could be next week before the Sol Flower stores are prepared to sell to any adult over 21 years old.
The biggest hurdle, he said, was getting the workers approved by the state to work in a recreational facility.
“Over the next three days we are helping all 150 or so apply for them to get fingerprinted and get their applications in,” Hurley said. “We could theoretically be ready by Friday, but realistically we are aiming for next week.”
He said the dispensaries could do “trial days” to ease the shops into full adult sales.
Nature’s Medicines, which has three dispensaries in metro Phoenix, plans to file its applications on Friday and hopes to sell recreational marijuana as soon as next week, CEO Jigar Patel said Tuesday.
“Our policies, procedures and product are all ready,” Patel said.
He said officials want the company’s 400 workers to have their new worker cards approved first.
Patel and other dispensary operators said they are worried about the supply of marijuana running low when recreational sales kick off and new customers rush to the stores, though the dispensaries have stockpiled to prevent that.
“I don’t think there
is
enough supply in the market but because we have the big grow under our belt, I think we will be OK in supply,” Patel said of Nature’s Medicines. “Our wholesale may suffer, but retail will be OK.”
Licensed dispensaries are allowed to grow their own marijuana and sell it wholesale to other licensed operators in the state.
Other dispensary officials also are concerned about supplies of some products, particularly smokable flower, when recreational sales launch. The distillates used to make other products are more easily stockpiled while flower dries out when it gets too old.
Pankaj Talwar, CEO at Copperstate Farms, said nobody really knows how much demand consumers will have for recreational marijuana.
Much of the state’s demand
is expected to come from tourists, but tourism is muted due to the pandemic. And it’s unclear if in-state consumers will flock to dispensaries the day they open or trickle in over time.
“I feel the industry is in a little bit of panic around this,” Talwar said. “A little bit of greed. A little bit of excitement.”
What to expect at dispensaries
Customers who visit a dispensary for the first time should expect a few things, among them, paying in cash. Most dispensaries remain cash only because of banking restrictions.
Recreational purchases will be assessed an additional 16% excise tax. Molina said the pretax price on products will be the same for both medical and recreational customers, though The Mint stores plan special discounts for medical customers.
Medical-marijuana patients can get products delivered to them from some dispensaries, such as Nature’s Medicines, but recreational sales will have to occur in person for now.
And despite marijuana use being legal, dispensaries don’t allow smoking or vaping inside or in the lines that form outside as the stores keep customers distanced to prevent spreading COVID-19.
“At the end of the day, we want to welcome everyone finally,” Molina said. “It’s a huge step in Arizona to showcase these dispensaries.”
Talwar said the opening of recreational sales is historic, especially for those who have worked in the industry despite some outsiders feeling a stigma toward it.
“For the people in my company, this is so huge, so symbolic,” he said.