Arizona is the 13th state to legalize adult-use cannabis. The adult-use license application process starts in January 2021 and is available only to vertically integrated medicinal operators. An additional 36 licenses will be available at a later not yet determined date.
95 licensed operators received approval for adult-use sales in January 2021.
November 2020 | Verano announces acquisition of Alt Med
November 2020 | AYR announces acquisition of Oasis for $81MM
March 2019 | Harvest acquires Arizona Natural Selections
Arizona boasts a fairly large, established medicinal market that is transitioning to adult-use. Considering patient counts are between three to four percent of the population, opening access to the other 96% of residents and tourism will likely result in near-term supply shortages that will support high wholesale prices. Small players without owned cultivation risk supply shortages over the intermediate term until additional wholesale capacity comes online.
Vertically-integrated Arizona operators and cultivators will have a multi-year window to enjoy robust demand for their products. Operators are rightfully raising capital for expansion, which should be plentiful given these projects' high ROI nature.
Though Harvest has the early advantage in the state, every major MSO with capital is looking to enter this market. We anticipate a lot of transaction activity in the Grand Canyon State for the next 24 months. Small retail operators may want to consider selling to larger players before the impact of supply shortages outweights the perceived uplift from adult-use.
If 300 days of sunshine every year isn't compelling enough, investors and acquirers alike will find this market ripe for money-making opportunities.