Arizona Marijuana Legalization Initiative Qualifies for November Ballot

Arizona Marijuana Legalization Initiative Qualifies for November Ballot

A tiered system for cannabis cultivators would be established, as would protections for the state's medical marijuana program.

August 11, 2016

The initiative to legalize and regulate marijuana like alcohol in Arizona has submitted enough voter signatures to qualify for the November ballot, according to a press release from the Campaign to Regulate Marijuana Like Alcohol. State officials notified the organization of the news late Aug. 10, and the Arizona Secretary of State is expected to certify the petition today, Aug. 11, officially placing the initiative as Proposition 205 on the ballot.

Prop 205 would allow adults ages 21 and older to possess limited amounts of marijuana and establish a system to regulate and tax marijuana like alcohol, meaning marijuana cultivation and sale would be legal under the regulatory framework.

“Eighty-three years ago, Arizona voters approved a ballot measure to repeal the failed policy of alcohol prohibition,” said J.P. Holyoak, chairman of the Yes on 205 campaign, in the press release. “This November, we will have the opportunity to end the equally disastrous policy of marijuana prohibition. Prop 205 would establish a more sensible system,” Holyoak said. 

The Yes on 205 campaign will kick off today with a press conference in Phoenix. Campaign leaders will be joined by a 23-year-veteran of the U.S. Drug Enforcement Administration, a physician and a teacher, who will discuss why they support replacing prohibition with the proposed legally regulated system. 

Prop 205 also would enable adults in the state to grow up to six marijuana plants, with a maximum of 12 plants permitted per residence. 

It would establish a Department of Marijuana Licenses and Control to oversee the system of licensed marijuana retail stores, licensed cultivation facilities, licensed product manufacturing facilities, and licensed testing facilities, according to the Campaign to Regulate Marijuana Like Alcohol’s website

The number of retail stores licensed to sell marijuana to adults will be capped at 10 percent of the number of liquor store licenses, which is currently fewer than 180.

According to the initiative’s full text, “The Department shall begin accepting and processing applications for up to one of each type of marijuana establishment from each reorganized marijuana business on or before Sept. 1, 2017. The Department shall accept an application for up to one of each type of marijuana establishment for each dispensary registration certificate held by such nonprofit medical marijuana dispensary. The Department shall begin accepting and processing applications for marijuana establishments from all other applicants on and after Dec. 1, 2017.”    

The proposition also would establish a statewide tiered system for marijuana cultivator licenses that would, according to the proposition text:
              (a)         establish at least 3 different licensing class tiers.
              (b)        establish a limit on the amount of marijuana that a marijuana cultivator within each licensing class tier may produce based on the size of the cultivation area, except that the highest tier shall permit the production of an unlimited amount of marijuana.
              (c)         unless the licensee is a reorganized marijuana business, issue only the smallest licensing class tier marijuana cultivator license to a licensee until the licensee demonstrates to the department that the licensee has sold more than eighty-five percent of the marijuana the licensee has produced to marijuana establishments without engaging in any transaction at a price which is less than the marijuana cultivator’s cost to produce the marijuana sold in the transaction.
              (d)        provides for the issuance of the highest tier marijuana cultivator license to a reorganized marijuana business.

Municipalities will be able to impose limits on marijuana business locations. The proposition text explains: “A locality may prohibit the operation of one or more of the types of marijuana establishments within the locality, except that if a locality prohibits the operation of a marijuana retailer, a marijuana product manufacturer, or a marijuana cultivator it may not prohibit a reorganized marijuana business established by a nonprofit medical marijuana dispensary operating within the locality from operating the prohibited type of marijuana establishment within the locality in any area that is zoned to allow the operation of a nonprofit medical marijuana dispensary.”

Localities may also “limit the number of marijuana establishments within the locality, except that the locality may not limit the number of marijuana retailers, marijuana product manufacturers, or marijuana cultivators to a number that is less than the number of locations where nonprofit medical marijuana dispensaries are engaged in the same type of conduct in the locality on the effective date of this chapter,” according to the Proposition text. 

A tiered schedule of annual licensing fees for cultivators also will be established, with fee amounts “relative to the size of the licensed cultivation area,” Prop 205 specifies. “The Department may require payment of an annual licensing fee of not more than $30,000 for the initial issuance of a license for a marijuana cultivator or $10,000 for a renewal license for a marijuana cultivator. The maximum fee amount for the lowest tier specified in the schedule may not be more than one-quarter of the annual licensing fee for the highest tier specified in the schedule.”

The Arizona Joint Legislative Budget Committee estimated the initiative would generate more than $123 million in annual tax revenue and license fees by 2020, including more than $55 million per year for K-12 education and full-day kindergarten programs, according to the Campaign to Regulate Marijuana Like Alcohol. 

“The initiative does not enact a tax on the sale of medical marijuana or affect the rights of medical marijuana patients that were established by Proposition 203,” according to the campaign's website.

“Arizona patients spent $215 million on 19 tons of medical pot last year, nearly double the 10 tons purchased in 2014,” reported in February. The website also reported that Arizona’s medical marijuana program servers nearly 90,00 patients. The state’s medical marijuana program, established under Proposition 203, was voted into law in 2010 by Arizona voters. 

The proposition also would not change laws regarding driving under the influence of marijuana; impaired driving will remain illegal.