Smoking-hot recreational sales keep local dispensaries hopping to meet demand
by Toni Denis
When Arizona became one of 15 states to legalize recreational marijuana and sales opened on January 22, SWC Prescott Dispensary, the first dispensary in the Quad Cities area to gain a license for recreational marijuana, saw demand go higher than ever.
Lines are nothing new for the small dispensaries in the Quad Cities area, especially since the pandemic forced them to institute social distancing and masking, but since recreational marijuana became legal, lines are longer and steadier.
In fact demand has been so strong that SWC Prescott, which a spokesperson for Duo Cannabis says typically buys from distributors that get their products elsewhere, turned to a local grow operation in Chino Valley to provide cannabis flower buds for its customers, since the dispensary had run out of its regular stock.
For an Arizona dispensary to lack enough product to meet demand is not unusual, explains Jon Udell, communications director for the Arizona National Organization for the Reform of Marijuana Laws (NORML). “There’s been a supply shortage caused by the quick rollout of the recreational program combined with a lack of testing facilities.”
NORML is working to encourage the development of a new lab to complement the three or four across the state that are serving 120 dispensaries. It costs anywhere from $3 to 5 million to acquire the equipment necessary to open a testing lab, says Udell. Expansion of existing labs may also help relieve the bottleneck, he adds.
Despite that hiccup, Udell says his organization was “thrilled” with the quick rollout of adult-use cannabis at 86 dispensaries initially, and that customers have access to safe, legal weed. The organization spent “countless hours” and made more than 60,000 phone calls to voters to ensure the passage of the Smart and Safe Arizona Act, called Proposition 207 on the ballot. Passed in November by a 60% majority of voters, the new law allows people 21 and older to grow their own plants and possess up to an ounce (28 grams) of marijuana or a smaller amount of concentrates. “From what I gather, business is booming around the state,” Udell says.
Six years after recreational legalization, Colorado reported $300 million in additional tax revenues.
Some local medical-marijuana patients are not happy with the change, however, because unlike in states like California and Nevada, there’s no requirement for two lines or priority service for patients. A patient at SWC Prescott who declined to be identified told 5enses that the addition of recreational sales was most frustrating in the first week of legalization, making lines long and steady. Medical-marijuana patients, many whom have chronic pain, had to wait in line longer than usual.
In mid-February Nirvana Dispensary in Prescott Valley gained its recreational license and has since picked up some of the recreational business. Unlike SWC, Nirvana has a delivery service for medical-marijuana patients, easing some of the crowding at the two small locations.
Udell of NORML notes that at larger locations in Phoenix, separate lines are available for medical-marijuana patients, so they can get their medicine without delay. “Delivery is available for medical patients and will become available for recreational users between 2023 and 2025,” Udell said. “The law says the Arizona Department of Health Services may issue delivery permits by 2023, but must issue them by 2025.”
Other issues that have cropped up since legalization include an effort by local municipalities to institute zoning laws that restrict licenses and make it harder to open new outlets. Prescott and Prescott Valley have both passed such ordinances.
Prescott approved its ordinance on November 17, making it illegal to smoke or consume cannabis products in public places or open spaces. It also limits the City to the only dispensary that already exists, stipulating that if it moves to another site, it could only be in a non-residential area and at least 300 feet from any residence, school, public park or community center. Prescott Valley’s ordinances also ban public consumption and growth in any public place within town limits. It also allows private businesses to ban its use.
Some of the local ordinances clash with established laws — for example, one requiring that recreational dispensary zoning is not more restrictive than medical dispensary zoning. Arizona NORML will likely challenge some of these restrictions either in court or through state legislation, Udell says. “They’re trying to prevent recreational sales and punish people for public consumption, even if that includes edibles and tinctures,” Udell said. “Some even ban throwing away packaging outside your home. But the dual-licensing restrictions that prevent recreational establishments are likely already illegal.”
Area dispensaries SWC Prescott and Nirvana are doing a booming business.
More to come
Based on the language in the state law, he said more recreational-use licenses for dispensaries will be approved over time. Three rounds of licensing first prioritize existing dispensaries, then 26 new “social-equity” licenses, and lastly an additional ten recreational licenses. The social-equity licenses will be issued in areas where there’s been a high rate of arrest and incarceration for cannabis-related activity, typically areas with high numbers of nonwhite residents.
The new law will also enable people who have been prosecuted for possession in the past to seek to expunge their records, starting in July. Udell said AZNORML thinks this will be “incredibly important” in combating past injustices that affect the ability of people with conviction records to qualify for jobs, housing and state licenses. More than 12,000 people were arrested in Arizona every year for possession alone, excluding intent to sell.
Other proposed legislation would allow research on medical uses for cannabis to include locally grown products rather than restrict researchers to inferior products from the federally operated farm in Mississippi; another would open medical use to people with autism.
Jobs and tax revenues
On the national front, according to a February 16 story on Leafly.com, job growth in the state-licensed cannabis industry rose 32% in the past twelve months. States added more than 78,000 new jobs. According to the 2021 report, “In the US there are more legal cannabis workers than electrical engineers. There are more legal cannabis workers than EMTs and paramedics. There are more than twice as many legal cannabis workers as dentists.”
While Arizona’s job growth won’t be as dramatic as that of large states like California, Illinois or Florida, it appears that cannabis sales are both pandemic- and recession-proof nationwide, meaning sales could continue to rise. A 16% sales tax in Arizona is expected to bring in tens of millions in state revenue each year. Six years after recreational legalization, Colorado reported $300 million in additional tax revenues.
Toni Denis is a frequent contributor to 5enses.