One of our objectives as we developed the final set of Rules for Medical Marijuana was to ensure reliable access to medication in rural Arizona. That’s why we built in some incentives to encourage folks to apply for one of the rural CHAAs. First, we made sure that inventory could be transferred between dispensaries (and their cultivation facilities) by allowing for a wholesale market. That way, dispensaries in rural Arizona that may have a limited number of qualified patients can decide that a core part of their business plan is to cultivate for the wholesale market and sell their inventory to dispensaries in urban AZ.
Second, we added a provision in the final rules that allow rural dispensary owners to move their dispensaries anywhere in the State after 3 years (subject to local zoning approval, Department approval, and the $2,500 fee). This way, a rural dispensary operator could decide after 3 years whether they want to move to an area in the state with a higher density of qualified patients. In order to backfill the dispensaries in rural Arizona in out-years, the Department will determine how many additional licenses can be issued and will allocate the licenses to applicants with the following priorities: 1st to a county without a dispensary, 2nd to CHAAs without a dispensary, and 3rd using a formula that targets areas with higher density of qualified patients.
We don’t know where the qualified patients will be living 3 years from now since the program hasn’t started yet. But with this approach, we’ll encourage migration of future dispensaries to areas with a high density of patients while still providing access in rural access.
We’re hoping that prospective dispensary applicants decide to apply in rural CHAAs- recognizing that competition for dispensaries in urban AZ will likely be robust. By applying in a rural CHAA, they can increase their chances of successfully being awarded a Registration Certificate and keep their options open for moving to a part of the state with a high density of qualified patients after a few years. Likewise, if a prospective applicant has had a previous bankruptcy or lacks access to $150K in capital (which are part of our competitive screening criteria), they’ll be in a better position to compete for Registration Certificates in rural AZ.
We’ll begin accepting applications for dispensaries on June 1 and will continue to accept applications throughout June. We’ll indicate on our website when applications are received throughout the month on our CHAA map. That way, prospective applicants can see where applications have been received and determine where the competition for registration certificates is most intense. Some applicants may want to use that information to make strategic decisions about where they want to apply.