Arizona’s initial adult-use marijuana licensing leaves some cities underserved

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Arizona might have opened adult-use marijuana sales last week, but the initial round of retail licenses, whether by design or not, leave some of the state’s most populated cities underserved.

At the same time, the distribution of licenses has created a license boon for some smaller cities.

The initial 86 adult-use licenses awarded by the Arizona Department of Health Services to existing medical marijuana dispensaries throughout the state will set in stone business locations for years to come.

In short, licensees in some cities such as Tucson and Gilbert will face relatively few competitors – at least for now. By contrast, permit holders in smaller municipalities, including Youngtown or Guadalupe, will face relatively more competition.

Analysis of the license distribution by Marijuana Business Daily shows that some of the state’s most populous cities, including Tucson and Gilbert, have fewer licenses per capita when comparing for population.

Phoenix, the state’s largest city, received 23 licenses, or 1.37 per 100,000 residents.

Compare that to Tucson, Arizona’s second-largest city, where three dispensaries received permits for 0.5 licenses per capita, which is nowhere near Phoenix numbers.

A fourth license was issued in nearby Marana, but the Tucson metropolitan area alone contains more than a million people, making the per capita number even smaller.

Some municipalities are actively trying to keep adult-use marijuana out of their communities.

Gilbert, a town east of Phoenix with about 250,000 residents, preemptively passed an ordinance in October that makes it illegal to buy and sell adult-use marijuana within the municipality’s boundaries – though there’s an exception for an already operational MMJ dispensary run by Massachusetts-based multistate operator Curaleaf.

In some of the denser areas of the Phoenix metropolitan area, the lack of dispensaries might be a boon for smaller, less-populated areas.

The town of Guadalupe, located west of Gilbert near Interstate 10, has only 6,400 residents but received two of the initial adult-use licenses, giving it 30.8 per capita if one takes into account its small size.

Of course, the number of licenses in the state will change.

The initiative passed by the voters allows Arizona’s 130 existing medical cannabis dispensaries first crack at applying for an additional adult-use license.

But a limited number of additional licenses, including social equity permits and licenses for counties with one or fewer existing medical dispensaries, may be issued.

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Andrew Long can be reached at