PROP 207: WHAT WILL RECREATIONAL MARIJUANA MEAN FOR THE EXISTING MEDICAL MARIJUANA PROGRAM?
Legalization of recreational marijuana in Arizona will be on the general election ballot in November 2020, following the Arizona Supreme Court’s unanimous ruling in August rejecting efforts to block the initiative. Because Arizona has almost ten years’ experience with its medical marijuana program, a common question is what would change if Prop 207 is approved?
Will approval of the initiative eliminate Arizona’s existing medical marijuana program? The quick answer: no.
The initiative, titled as the Smart and Safe Arizona Act, would add an entirely new chapter in Title 36 of Arizona Revised Statutes (Chapter 28.2) that establishes the recreational marijuana program. As such, the Smart and Safe Arizona Act will not eliminate the existing medical marijuana program, which was established when Arizona voters approved the Arizona Medical Marijuana Act in November 2010. Existing cardholders and dispensaries can continue “business as normal” even if the new program is enacted.
Similar to the Arizona Medical Marijuana Act, the Smart and Safe Arizona Act tasks the Arizona Department of Health Services with adopting rules to design and enforce the recreational marijuana program. Local jurisdictions will also have the authority to enact zoning regulations that limit the time, place and manner of recreational marijuana establishments, subject to limitations provided in the Smart and Safe Arizona Act. What will change is this: the regulatory steps and procedures associated with medical marijuana will, in a sense, become optional.
Adults will no longer need to obtain a registration card to purchase marijuana. In addition, it is likely that many existing dispensaries will opt for “dual license” operations, meaning that a single retail location can offer both medical and recreational marijuana for sale.
A significant difference will be the taxable status of recreational vs. medical marijuana. To generate revenues to be used for various purposes, Prop 207 imposes a 16 percent sales tax on recreational marijuana products. Sales of medical marijuana would continue to be tax free—even if the product being sold is identical.
Gammage & Burnham’s Cannabis Law Team has extensive experience guiding our clients through the complex and evolving legal and regulatory landscape of Arizona’s cannabis industry. If you have any questions about either the existing medical marijuana program or the proposed recreational marijuana program, please contact us.