Arizona voters approve Proposition 207, making recreational marijuana legal in state
Ryan RandazzoArizona's ballot measure to legalize marijuana passed Tuesday with voters deciding to join 11 other states that have done so despite a conflict with federal law, according to The Associated Press.
Proposition 207 would legalize possession of as much as an ounce of marijuana for adults 21 and older and set up a licensing system for retail sales of the drug, starting with the medical-marijuana dispensaries already operating in the state. Sales could begin in March under the measure.
Once the election results are made official Nov. 30, possession and growing as many as six plants at home will be legal for adults.
The measure also would allow people previously convicted of marijuana crimes, such as the felony charge for possession, to have their records expunged by the courts.
And it would establish special "social equity" licenses for communities historically disenfranchised by marijuana laws.
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The Department of Health Services would be responsible for determining who is eligible to apply for those social equity licenses, and would also be responsible for developing rules for the program and reviewing applications from medical dispensaries.
The approximately 120 medical-marijuana dispensaries operating in the state today, which have provided nearly all of the funding for Proposition 207, would be allowed to sell the drug to anyone over 21, not just people who have a doctor's recommendation and state-issued medical-marijuana card.
Dispensaries are anticipating a crush of new business. The Mint Dispensaries, for example, are prepared to expedite the construction of a new, $25 million, 100,000-square-foot growing operation in north Phoenix to keep their Guadalupe and Mesa retail sites stocked if Proposition 207 passes.
The Mint also already has approval from Mesa to expand its dispensary there as well, and can add additional registers in the Guadalupe store beyond the 21 in the store now, said Raúl Molina, a partner and senior vice president of operations.
"We think we're ready for it," Molina said before Election Day.
Company officials do not want to run out of marijuana for medical patients or be left with no supply for recreational customers, which has happened in other states that transitioned from medical to recreational sales.
A similar measure also passed in New Jersey on Tuesday, according to the Associated Press, while recreational-marijuana initiatives were leading in early results in Montana and South Dakota as well.
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Attorney Adam Trenk, director of the Cannabis Department at the Rose Law Group, said nearly all medical dispensaries are expected to apply to sell recreational marijuana.
"I can’t imagine a world where they wouldn’t because they immediately expand the demographic of people who can walk into the store from just those with (medical-marijuana) cards to anyone over the age of 21," Trenk said.
He also said his firm would help clients, including some through pro bono work, to expunge criminal records for marijuana-related crimes as allowed through the measure.
"We will, through community law centers, work to help those who qualify to get their records cleared," he said.
“It is incredibly important that we swing the pendulum back in the other direction, and stop spending money and resources to prosecute nonviolent crimes like marijuana possesion and we allow people to get their lives back ....”
Steve White, the CEO of Harvest Health and Recreation, a Tempe-based cannabis company with 15 stores in Arizona and locations in several other states, said recreational sales should not push out medical-marijuana patients.
“There will not be disruption to service to medical patients,” he said, adding that the company expects people seeking medical relief but who don’t have a medical card to become customers, and the business will still cater to those people.
He also said the industry is better prepared than some other states that have run low on marijuana when recreational sales begin.
“Our medical market is a much more mature market than a lot of others that expand into recreational sales," he said. "As a result of that you will not find same level of supply chain hiccups that you do in some other states. You might see minor disruptions for a variety of reasons … . But the expectation is because of the maturity, because of the experience of the (Department of Health Services), we're not going to see the same type of supply-chain issues they see in other states.”
He said he expects the state to issue licenses for recreational sales by late March or early April, in time for April 20, a holiday of sorts celebrated by marijuana users.
"That is a holiday we celebrate and we’ll probably be celebrating differently this year," he said.
Not everyone was celebrating.
Kevin Sabet, president of an anti-marijuana group called Smart Approaches to Marijuana, who served in the Clinton, Bush and Obama administrations as a drug-policy advisor, said the initiative was bad for Arizonans.
"Moving forward, we aim to aid those at the local level in establishing rules that prohibit the industry from opening stores and conducting other activity in their communities," Sabet said in a prepared statement.
"As we have seen in state after state with a legal market, the overwhelming majority of communities have chosen to ban marijuana storefronts, deliveries, growing operations, and other activities. This fact alone serves as a counter to the industry’s claim that commercialization is widely supported.”
Where tax dollars would go, other provisions of measure
The proposition would add a 16% excise tax to marijuana, on top of sales tax, and the total revenue to the state and municipalities is estimated to be between $200 million and $300 million annually.
Much of that would be directed to agencies such as the Department of Health Services and law enforcement that would have to increase their workload to administer the program, while the rest would go mostly to the state's community colleges.
The campaign to pass the measure collected more than $5 million in contributions, far outspending opponents.
Those opponents collected about $600,000, much of it coming from the Center for Arizona Policy, a well-known conservative group that espouses "foundational values of life, marriage and family, and religious freedom."
Opponents have argued that legalizing marijuana here will lead to increases in young people using the drug and more dangerous roadways, while opponents have countered that has not been the case in other states.
The number of medical-marijuana licenses in Arizona is based upon the number of traditional pharmacies, and today there are about 130 licenses, but not quite all of them are in use at an operating dispensary. Under the measure, any medical-marijuana facility that obtains a recreational sales license would have to co-locate the businesses at one address.
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That means the total number of retail sites in the state would be about 160, including the 130 existing medical licenses, the 26 social equity licenses, and some that would be provided in rural counties that only have one or no medical-marijuana stores.
The measure says that DHS "shall limit the strength of edible marijuana products to no more than 10 milligrams" of tetrahydrocannabinol, or THC, each. Edible marijuana products sold in medical facilities today range from 2.5 milligrams of THC to 25 milligrams or more. The measure does not restrict the potency of other marijuana products.
The measure also says that DHS "shall" adopt rules regarding delivery, but extra provisions were added to ensure delivery is only made to people who order from a licensed facility.
The measure will prohibit delivery vehicles from carrying "extra or unallocated marijuana" that could be offered to customers who hadn't yet placed an order for delivery.
This is intended to prevent delivery drivers from simply selling to people on the street, according to the measure's authors.
The measure says DHS shall begin accepting applications from medical-marijuana dispensaries that want to operate as recreational facilities starting Jan. 19 and through March 9, 2021.
No more than 60 days after receiving applications the department shall issue licenses to those applicants that are in good standing with the department. With that timeline, recreational sales could begin around March 20.
Similar measure failed in 2016
Four years ago, Proposition 205 asked Arizona voters to legalize cannabis for recreational use and establish licensed outlets where sales of the drug would be taxed.
The Regulation and Taxation of Marijuana Act would also have allowed people 21 and older in Arizona to possess up to 1 ounce of marijuana and grow it in their homes.
That initiative failed by a narrow margin, and the number of Arizonans who possess a state-issued medical-marijuana card has nearly tripled since then.
Reach reporter Ryan Randazzo at ryan.randazzo@arizonarepublic.com or 602-444-4331. Follow him on Twitter @UtilityReporter.