With more states deciding to full-scale legalize all the time, everyone has their eyes on Arizona to see if they will make the next big and decisive move.
It would totally make sense for Arizona to decide to take the plunge and go all the way; they did $112 million in medical sales last year, making them one of the leaders in the country, and the numbers they have been reporting so far this year are even more impressive.
However, as most other states who have gone full-scale legal have already realized, it’s not that easy. There are many issues on the horizon, including possible over-supply of cannabis, as well as different proposed wordings for the legal bill that make figuring out what is really going on a difficult job.
Another issue is changing legal representation in the state. Originally, the new dispensaries applying for medical licenses were supposed to have their paperwork in by May 18th - June 1st, but the date has been pushed back indefinitely as the new Governor, Doug Ducey, laid down a moratorium on rule making which caused the Department of Health Services to freeze the date.
The official pushback is until “late 2015,” but Jeff Bloomberg, who manages the Department of Health, has issued a statement that he, “does not believe it is possible to accept and process dispensary registration certificate applications until the rulemaking is completed and effective. At this time, it is not possible to estimate when (that will be).” In other words, the date could really be pushed back indefinitely.
Not only is this annoying for the industry in general and those who want the product, it is also really hurting the businesses who were planning on getting started, and are now forced to put all plans on hold and don’t get to make any income.
“These are very costly delays,” stated industry consultant Pamela Epstein in an interview with Marijuana Business Daily in regards to the cost of putting it all on the backburner. “There’s only so much money in the pot to go around.”
There is also the possibility of over-production for the industry. “We just learned that the trajectory of these cultivations is pretty advanced,” Roy Grinnell, a real estate broker who has been helping interested clients look for grow spaces, told Marijuana Business Daily. “There’s groups out there that are trying to make big plays and do massive cultivations on a massive scale… They’re buying large buildings, large pieces of property, permitting these things, and there’s over a million square feet now that’s been permitted and is located on over 26 million square feet of land.”
If enough entrepreneurs try to get something going on such a large scale, it could lead to too much marijuana without enough legitimate ways to sell it, especially if these freezes on business hold out. Current projections point to growers coming up with ten times the amount of needed cannabis for the legal industry.
“It’d be kind of crazy at this point to even do a cultivation just because there’s going to be so much supply,” Grinnell stated in the interview. “They may already be losing money in some cases or barely breaking even. And if there comes a price war, and those margins decrease, it’ll be hard for them to keep their doors open.”
Furthermore, there is debate about how to phrase the language for legalization. The Marijuana Policy Project is one of the main groups who have been advocating for this, but unfortunately, not everyone agrees with their ideas. Specifically, many citizens are concerned with the fact that their proposal might leave home growing out of the equation entirely.
“We told MPP that if they didn’t get (home grow) language back in the initiative, then groups like Safer Arizona and some of the other groups we’re associated with would not be able to support their initiative,” Robert Clark, who serves as the current co-chair of Safer Arizona, told Marijuana Business Daily.
All of this certainly points for a rocky future as far as legalization goes, but with any luck, things will get on track and full legalization in Arizona will become a real possibility in 2016. Any new industry inevitably has many setbacks, but if Arizona can get past all these, they will be in for a bright future.