Experts predicted that Arizonans would pass the cannabis legalization initiative in November 2020 — and they were right. Proposition 207, which gave Arizonans over 21 the ability to buy, possess and consume marijuana (and gave the state government the ability to tax marijuana sales) gained over 60 percent of the popular vote, which ensured that the Grand Canyon State would indeed enjoy legal bud in 2021.
Unlike many other states that have legalized cannabis, Arizona had mere months to enact the voter initiative and supply its residents (and visitors) with access to recreational weed, yet it has succeeded with flying colors. In fact, of the four states that legalized cannabis in November 2020 — South Dakota, Montana, New Jersey and Arizona — only the Grand Canyon State is currently enjoying recreational sales. How did Arizona develop recreational regulations so swiftly, and are the early days of legalization as halcyon as they seem across the state?
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Arizona’s Medical Marijuana Program Was Already Robust
Cannabis is not a new concept to Arizona, which established its medical marijuana program in 2010. Though Arizona’s medical marijuana program endured a rocky start, recent years have seen a substantial boom. In fact, medical marijuana has been a thriving industry in the state for several years, likely thanks to its high population of retirees who suffer from medical conditions treated with cannabis.
In rankings of the top medical marijuana producers across the U.S., Arizona has consistently placed among the top 10, bested mainly by much larger states with medical and recreational cannabis programs, like Washington, Colorado and California. In 2019, Arizona reported over $705 million in medical marijuana revenue, demonstrating that cannabis use has been widely accepted across the state. In comparison, Michigan, Washington and Colorado each reported roughly $1 billion in cannabis revenues, but all three states combine reports of recreational and medical revenues.
Because cannabis businesses have seen such success over the past decade, many were primed for the transition for dual medical and recreational licensing when voters or legislators offered the opportunity. In fact, many counties have maintained the same number of cannabis dispensaries because so many medical establishments have merely folded recreational services into their existing model. For example, every dispensary in Tucson offers both medical and recreational products. When the voter initiative passed in 2020, the strong cannabis market was prepared — and regulators were, too.
Arizona Regulators Prepared for the Inevitable in Advance
The passage of the Smart and Safe Act — which legalized adult-use cannabis across Arizona — was hardly a surprise to anyone paying attention to ongoing cannabis trends in the state and across the country. Though Arizona’s first attempt at legalizing recreational cannabis failed in 2016, the margin was frustratingly slim: Just 3 percent of the vote separated Arizona adults from legal weed. Fortunately, no state in history has failed to enact recreational regulations after such a narrow margin of defeat, and experts (correctly) predicted that the next ballot initiative would see success.
Knowing this, Arizona regulators prepared for the inevitable well in advance of the November vote. Regulators worked closely with the state’s Department of Health Services to develop rules for the recreational market, so after the vote, they only needed to refine their guidelines to allow for enactment of the new regulations in January.
Other States Are Fighting Voter Will
Though some lawmakers initially fought the legalization of Arizona’s medical marijuana program in 2010, virtually none have worked against the enactment of recreational cannabis across the state. The same cannot be said for other states that strove to pass cannabis-related laws in 2020.
The best example of state legislators working directly counter to voter will is South Dakota. After voters passed two cannabis-related initiatives in the state — one legalizing a medical marijuana program and another allowing recreational use — the governor immediately moved to block the decision. A South Dakota judge rejected the voter-approved amendments, and currently the state is embroiled in lawsuits and developing legislation around the issue. As a result, it seems unlikely that South Dakotans will have any legal cannabis options in the coming years.
Though not all states have reacted so drastically to counter voter desire, but none were able to actionably anticipate cannabis law outcomes as effectively as Arizona. Fortunately, the Grand Canyon State is poised to benefit to the tune of over $300 million in recreational cannabis revenues in 2021, while other, slower states stumble.
