Licensing
License Types
- Marijuana Establishment (Cultivator) — indoor, outdoor, greenhouse cultivation; tiered canopy limits
- Must demonstrate financial responsibility
- Priority to existing medical dispensary licence holders initially
- Marijuana Product Manufacturer — edibles, concentrates, infused products
- Marijuana Retailer — adult-use storefronts; existing dual-licensed dispensaries converted
- Max 10% of dispensary licences per entity
- Local approval required
- Marijuana Testing Laboratory — independent ISO/IEC 17025 labs
- Marijuana Transporter — intra-state transport/delivery between licensees
- Marijuana Event Organiser — licensed temporary cannabis events
- Social Equity Licence — priority licensing for communities impacted by cannabis prohibition
Taxation
Adult-Use Excise Tax16% — on gross receipts of retail marijuana sales
Adult-Use Excise
16%
On retail gross receipts
State Transaction Privilege
5.6%
Standard AZ sales tax
Municipal TPT
1–4%
Varies by city
Medical (AMMA)
6.6%
TPT only; no excise
Revenue Allocation
- Excise revenue: 33% community college districts, 31.4% transportation, 25.4% public safety, 10% Justice Reinvestment Fund
- Medical purchases exempt from the 16% excise — only standard TPT applies
Advertising
Regulations
- Prohibited within 1,000 ft of schools, daycare centres, playgrounds, or youth rec centres
- No advertising where audience composition is >28.4% under age 21
- Required disclaimers: 'For use only by adults 21 years of age or older. Keep out of reach of children.'
- ADHS licence number mandatory
- Health warning required
- Social media: age-gating required; no influencer marketing to under-21 audiences
- No false health claims or testimonials about medical benefits
Workplace Rules
Employee Rights
- Prop 207 protections: Employers may not discriminate solely for off-duty adult-use cannabis use OR positive test — unless employee is in a safety-sensitive position
- Must determine if employee is actually impaired at work, not just test positive
- Impairment must be documented
- Exceptions: Safety-sensitive roles, federal contractors, CDL drivers, DOT-regulated positions
- Drug-free workplace policies may still require pre-employment testing; on-duty impairment always prohibited
- Medical marijuana card holders have additional explicit ADA-analogous state protections under AMMA
Possession & Transactions
Adult-Use Possession Limit1 oz (28 g) flower · 5 g concentrate
1 oz
Flower — on person
5 g
Concentrate
6 plants
Home grow
1 oz
Per transaction
Transactions
- Minimum age: 21+; valid government-issued photo ID required
- Daily purchase limit: 1 oz flower per transaction
- No reciprocity with out-of-state medical cards — AZ card required
- Cash/debit widely accepted; credit card processing limited
Product Testing
- Mandatory testing: Potency (THC/CBD), pesticides, heavy metals, microbials, mycotoxins, residual solvents
- All testing conducted by ADHS-licensed independent laboratories
- Certificate of Analysis (COA) must accompany every batch — available to consumers on request
- Products failing testing must be destroyed or remediated per ADHS rules
Medical Use
Qualifying Conditions (AMMA)
- Cancer, glaucoma, HIV/AIDS, hepatitis C, ALS, Crohn's, Alzheimer's, cachexia
- Severe and chronic pain, severe nausea, seizures, severe muscle spasms
- PTSD (added 2017), opioid dependence (added 2019)
- Chronic or debilitating disease as determined by a licensed physician
Medical Possession Limit2.5 oz per 14-day period
Programme Rules
- ADHS Medical Marijuana Programme — annual card renewal ($150 fee)
- Physician certification required annually
- Patients aged 18–20 may access dispensaries with parental consent for minors
- Arizona recognises out-of-state medical cards on a reciprocal basis (30-day visitor allowance)
Adult-Use Cannabis
Differences from Medical
- Age: 21+ vs 18+ medical
- Excise tax: 16% on adult-use; medical only pays TPT (~6.6%)
- Adult-use purchase limit: 1 oz per transaction; medical: 2.5 oz/14 days
- Home cultivation: both may grow 6 plants
Local Ordinances
- Cities/towns may prohibit retail establishments through local ordinance
- Scottsdale, Mesa, Chandler opted out initially but updated rules vary
- Municipalities may collect up to 3% additional local tax
- On-site consumption lounges require separate local approval
- Zoning: 800 ft minimum from schools, daycare, youth facilities typically required locally
Penalties
- Possession over limit (adult): Prop 207 decriminalised; civil infraction, no criminal record for small excesses
- Possession under 1 oz under age 21: Civil penalty $100
- Sale without licence: Class 3 Felony — 2–8.75 years
- DUI cannabis: Class 1 Misdemeanour — 10+ days jail (mandatory), fines, licence suspension