Notable Players

A Deeper Look At This State

Regulatory Framework

Arizona is the 13th state to legalize adult-use cannabis. The sunshine state has been preparing for an upcoming social equity lottery set to award 26 licenses to winning applicants, but multiple lawsuits over the lottery process has delayed the once set date of April 8, 2022 until further noticed.

Notable Market Activity

December 2021 | Curaleaf announces acquisition of Bloom Dispensaries in a deal valued at $211MM

November 2021 | Curaleaf enters into definitive agreement to acquire Tryke Companies in a cash and stock transaction valued at ~$286MM

October 2021 | Trulieve completes acquisition of Harvest Health in a $2.1B deal creating the largest and most profitable U.S. cannabis operator

September 2021 | The Green Halo is acquired by Roop Investments for $30MM

August 2021 | 4Front Ventures received $15MM from Navy Capital Green Management

August 2021 | Jupiter Research received $10MM from Alternative Finance Network in non-convertible debt

March 2021 | AYR completes acquisition of Oasis for $75MM

March 2021 | Verano announces acquisition of three retail and a cultivation and processing facility

November 2020 | Verano announces acquisition of Alt Med

March 2019 | Harvest acquires Arizona Natural Selections

Contact Sharp to discuss additional transaction details

What's the Play?

In the first year Arizona adults could legally buy cannabis, they spent slightly more than $1.4B on medical and recreational cannabis. Medical use comprised $758MM of the sales, while $650MM came in from recreational cannabis. The growth trajectory is impressive, especially considering it took neighboring Nevada four years to break $1B in sales.

According to the state, total monthly cannabis sales peaked in March 2021, then dipped slightly and stabilized at around $170 million a month by the end of the year. Purchases of flower accounted for around 47 percent of sales in 2021, but more Arizona consumers are buying vapor pens and edibles, as well. The prices of most goods — from flower to concentrates — decreased over the course of the year, with the exception of vapes and tinctures.

Vertically integrated Arizona operators and cultivators will have a multi-year window to enjoy robust product demand. Operators are rightfully raising capital for expansion, which should be plentiful given these projects' high ROI.

With the acquisition of Harvest Health, Trulieve now has the early advantage in the state. 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 outweighs 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.

Market Snapshot

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

594/273

By The Numbers

Population

~7.3MM

21+ Population

~3.54MM

Annual Tourists

~
47
MM

Medicinal Legalization

2010

Adult-Use Legalization

2020

First Adult-Use Sales

2021

MMJ Patients

~313K

Monthly Revenue

~$115MM

Cultivation Cap

No Limit

Cultivation Licenses

101/169 (Operational/Limit)

Retail Licenses

130/169 (Operational/Limit)

Retail License Cap per Operator

18

Vertical Integration

Required

Delivery

Allowed

MMJ Qualifications

Less Restrictive

Adult Population/ # Retail Licenses

~27K

Accepts Out of State MMJ

No

MMJ Patients / # Retail Licenses

Top Cultivators

Notable Market Activity

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Proprietary Sharp Capital Advisors data - compiled using various sources including state and local government data

Have questions? Reach out to the team

Co-Founder & CEO
Chicago
Managing Director
Los Angeles
Head of Debt Capital Markets
Chicago
Shit We Don't Know

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