AZDHS – Marijuana Establishment application Financial requirements

After review of the final rules for Marijuana establishment rules as posted on the AZDHS website we have calculated the Initial Cost of Applying for a Marijuana Establishment License, Early applicant and SEOP, is Approximately $527,950

-Must show a proof of liquid capital of $500,000

The following Fees are directly copied from the final rules document and formatted for viewing ease:

AZDHS Marijuana Establishment Fees by type as stated on websiteInitialRenewal per yearOne-Off fees
1. For a marijuana facility agent license:
a. For an initial license for an applicant submitting the applicant’s fingerprints on a fingerprint card, $300;$300.00
b. For renewal of a license for an applicant submitting the applicant’s fingerprints on a fingerprint card, $300;$300.00
c. For an initial license for an applicant submitting a copy of the applicant’s current level 1 fingerprint clearance card issued pursuant to A.R.S. § 41-1758.07, $150;$150.00
d. For renewal of a license for an applicant submitting a copy of the applicant’s current level 1 fingerprint clearance card issued pursuant to A.R.S. § 41-1758.07, $150;$150.00
2. For changing information on a marijuana facility agent’s license, $10;$10.00
3. For requesting a replacement marijuana facility agent license, $10;$10.00
4. For a marijuana establishment license:
a. An application fee for an initial license, $25,000; and$25,000.00
b. A license fee for license renewal, $5,000;$5,000.00
5. For applying for an approval to operate, $2,500;$2,500.00
6. To change the location of a marijuana establishment’s retail site, cultivation site, or manufacturing site, $2,500;$2,500.00
7. To add a cultivation site or manufacturing site, $2,500;$2,500.00
8. To change the approved activities for a marijuana establishment’s retail site, cultivation site, or manufacturing site, $2,500; and$2,500.00
9. Proof of liquid capital – ADULT USE OF MARIJUANA PROGRAM
Total Capital needed to apply:$527,950.00$5,450.00$7,520.00
9. For a marijuana testing facility license:InitialRenewal per yearOne-Off fees
a. For an initial license, $25,000; and$25,000.00
b. For license renewal, $5,000.$5,000.00

AZ Marijuana Establishment Licenses – 2021

Total Licenses available for “Early Applicants” – (Approximately 143)

ADHS is required to accept applications for marijuana establishment licenses from early applicants from January 19, 2021, to March 9, 2021. Within 60 days after this period, ADHS needed to begin issuing licenses to qualified early applicants. Proposition 207 defined early applicants as nonprofit medical marijuana dispensaries and entities in counties with fewer than two medical marijuana dispensaries. ADHS was allowed to charge fees for licenses, and the fee amount would be limited to actual costs of processing applications and no more than five times(no more than $25,000) the fee for medical marijuana licenses($5,000). Fees were to be deposited into the Smart and Safe Arizona Fund.

“Proposition 207 provided for dual licenses, which would be entities that hold both nonprofit medical marijuana and for-profit marijuana establishment licenses.”

DHS was authorized to revoke licenses for violations and penalize entities for violations.

(131) Adult use licenses prioritized for existing non-profit Medical marijuana dispensaries in good standing, which include:
– 1 retail location (likely existing site or adjacent),
(B) 1 Off-Site Cultivation,
(C) 1 off site manufacturing processing and packing facility -Likely structured as a hub style:-Edibles manufacturing, likely Brand opportunities-Extraction Lab, Likely Brand opportunities-Packaging (Likely Ancillary opportunities) , Likely also used as admin and wholesale offices).
(12 )- County based “Early Applications” – ANYONE CAN APPLY
“issue no more than two marijuana establishment licenses in counties that contain no registered nonprofit medical marijuana dispensaries;
issue no more than one marijuana establishment license in counties with one nonprofit medical marijuana dispensaries”

Methodology to determine 12 licenses: Compare the list from ADHS registered licensed operating non-profit medical dispensary locations to a county map:
Apache County – 0 not for profit mmj dispensaries – (2) licenses
Santa Cruz County – 0 not for profit mmj dispensaries – (2) licenses
La Paz County – 0 not for profit mmj dispensaries – (2) licenses
Greenlee County – 0 not for profit mmj dispensaries – (2) licenses
Yuma County – 1 not for profit mmj dispensaries – (1) license
Cochise County – 1 not for profit mmj dispensaries – (1) license
Gila County – 1 non-porfit mmj dispensaries – (1) license
Graham County – 1 not for profit mmj dispensaries – (1) license

Jan. 19th to March 9th Early Applicants may apply
Within 60 days of turning in a qualified application a dispensary registration certificate must be issued. This is likely First-come first-awarded if qualified and acceptable application is reviewed as administratively complete and substantively complete to the process.

March 9th + 60 days = May 8th for last of early applicants to be awarded licenses

Social Equity Ownership Program Licenses: 26 available
Likely to begin approx. July 7th 2020 (May 8th + no earlier than 60 days) to start accepting SEOP applications. may be later than that if rules are not established.
 (26) Prop 207 requires a Social Equity Ownership Program – ADHS will form the rules and program design

Rules Must be publicized on the ADHS website and to the public 60 days before any random selection

Research for possible social equity rules based on data:
Maricopa County Crime Data:

NORML Crime data:

Voters pass Proposition 207

Jared Keenan, senior staff attorney at the ACLU of Arizona, had the following reaction to Proposition 207 being passed in Arizona:

“Voters chose to move Arizona forward last night. As the state with the fifth highest incarceration rate in the country, the legalization and decriminalization of marijuana use will help Arizona reduce its bloated prison population while allowing those convicted of a past marijuana offense to have their record cleared. We will work to ensure that prosecutors across the state uphold the will of Arizona voters and end the practice of saddling people with a felony conviction for simple marijuana possession.”

CBD statistics by method

According to a SingleCare survey, nearly half of CBD users prefer oils/tinctures, lotions/balms, and gummies. But there’s a growing market for CBD edibles.

18% are interested in capsules/tablets

18% are interested in topical sprays

17% are interested in CBD-infused food, such as chocolate

13% are interested in vaping products

12% are interested in soap

11% are interested in non-alcoholic, CBD-infused drinks

9% are interested in CBD bath bombs and salts

8% are interested in skincare products

8% are interested in patches

1% are interested in other CBD products

When it comes to where CBD users get their products, a 2019 Consumer Reports study says:

40% purchase CBD from a dispensary

34% purchase CBD from a retail store

27% purchase CBD from an online retailer

12% purchase CBD from another source

CBD statistics by age

CBD user demographics skew young. Of all age groups, Americans age 18-29 are most likely to use CBD consistently, and its popularity decreases with age. (Gallup, 2019):

20% of people ages 18-29 use CBD

16% of people ages 30-49 use CBD

11% of people ages 50-64 use CBD

8% of people age 65 and older use CBD

And the numbers nearly double for adults who have tried it once or more. According to a 2019 Consumer Reports CBD survey:

40% of people ages 18-29 have tried CBD

32% of people ages 30-44 have tried CBD

23% of people ages 45-59 have tried CBD

15% of people 60 and older have tried CBD

How common is CBD use?

33% of American adults have used CBD once or more. (SingleCare, 2020)

64% of Americans are familiar with CBD and/or CBD products. (Gallup, 2019)

An estimated 64 million Americans have tried CBD in the last 24 months. (Consumer Reports, 2019)

Of those who use CBD, 22% said it helped them supplement or replace prescription or over-the-counter drugs. (Consumer Reports, 2019)

Hemp-derived CBD products are legal in all 50 states, as long as they contain no more than 0.3% THC. (Food and Drug Administration, 2020)
In overall cannabis sales, Colorado tops the list, having sold over $1 billion since 2014. (CNN, 2019)

The top states for CBD sales in 2019 are California ($730 million), Florida ($291 million), and New York ($215 million). (Statista, 2019)

Of the Americans who use CBD, the most common uses are for pain relief (64%), anxiety (49%), and insomnia (42%). (SingleCare, 2020)
CBD web searches increased by 125.9% from 2016 to 2017 and 160.4% from 2017 to 2018. (JAMA Network, 2019)

United States hemp farmland increased from 25,713 acres in 2017 to 78,176 acres in 2018. (Food Business News, 2019)

CBD Edibles – The most profitable CBD products

As reported by, Edibles are the only sector of the cbd industry that have had an 

increase in retail pricing due to scarcity and demand for quality kitchens and producers.

The CBD edibles market is currently dominated by CBD Gummies ranging from $25-$45 per 1000 mg.  

The popularity of cbd edibles is revealing enormous opportunity for CBD Brands to meet the national retail markets at local grocery stores, gas stations, Smoke/vape shops, MMJ dispensaries, and specialty CBD-Only retailers. 


As Bulk CBD costs continue to decrease, there is a short window to take advantage of the retail pricing and profit margins for CBD products. The retail pricing and profit margins will gradually decrease to reflect the growing national supplies of CBD available.

State of the 2020 CBD Market

Cbd is still fairly a new and scarce commodity, but it’s availability is rising. 

In 2015, supply couldn’t keep up with demand causing prices of up to $14k+ per Kg of CBD isolate and distillate. This pricing remained until the production of industrial hemp was nationally accepted and began to be produced throughout the country starting around 2018. 

As of 2020 the market has been flooded with hemp producers nationwide selling wholesale. A boom in hemp agriculture has brought the price to hover around $1200 per Kg of CBD isolate/distillate. The market is on track to bring that pricing down to as low as $700 per Kg by 2021 EOY.

Start Your Own CBD Brand!

CBD is legal in the State of Arizona. In 2014, a court ruling determined that CBD is medically useful for treating epilepsy. This means that buying CBD oil in Arizona is legal without a medical marijuana card, even though purchasing cannabis is still illegal. That’s because CBD can be derived from cannabis’ cousin industrial hemp.

This legality leaves open many business opportunities to start legal, cbd only, product lines for retail purchase without a license.

In AZ starting a brand is as easy as obtaining your LLC / TPT tax ID#,  becoming a certified commercial or “cottage” kitchen (if youre making an edible product), buying bulk materials and ingredients, packaging, and trademarking for your brand.

Implementations of rigorous testing and cottage or commercial kitchen safety standards apply per AZ food safety laws.

Contact our Consultants for more information and sourcing for your CBD!


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