Social Equity Definition / Criteria
- i. Previous Cannabis Conviction:
- ii. Income:
- iii. State Residency:
- iv. Qualifying Neighborhood / Municipal Residency:
Arizona’s Social Equity Ownership Program is intended to promote the ownership and operation of licensed marijuana establishments by individuals from communities disproportionately impacted by the enforcement of previous marijuana laws. Twenty-six adult-use Marijuana Establishment licenses will be issued to applicants who qualify under the Program.
Arizona offers a social equity program within its adult use framework. In order to be eligible to participate in Arizona’s social equity program, a person holding at least least 51% ownership in the business must meet three (3) of the following four (4) criteria:
1. Had an annual household income in at least three of the years 2016 through 2020 that was less than 400% of the poverty level.
2. Has been adversely affected by the enforcement of previous marijuana laws as demonstrated by an eligible cannabis conviction or expungement.
3. Has been adversely affected by the enforcement of previous marijuana laws because the individual is immediately related to another individual who was convicted of or received an expungement for an eligible federal or Arizona state cannabis conviction.
4. Has lived for at least three of the years 2016 through 2020 at a physical address in an area that has been identified by the Department as being disproportionately affected by the enforcement of Arizona’s previous marijuana laws.
Social Equity Provisions
The Social Equity Ownership Program is intended to promote the ownership and operation of licensed marijuana establishments by individuals from communities disproportionately impacted by the enforcement of previous marijuana laws. Arizona accepted applications for 26 adult use establishment licenses from social equity applicants from December 1, 2021 through December 14, 2021. All applications received will be reviewed for administrative and substantive completeness. Applications deemed substantially complete will be entered into a random selection, which will be used to issue the 26 available licenses. The random selection will likely take place in Spring 2022.
All principal officers and board members of the applying business must complete each module of the Arizona Department of Health Services provided training which covers (1) corporate entity formation (2) compliance and regulations (3) branding and marketing (4) fundraising (5) legal (6) community and industry panels. Additionally, social equity license holders will be required to develop and implement policies to document how the Marijuana Establishment will provide a benefit to one or more communities disproportionately affected by the enforcement of Arizona’s previous marijuana laws.
License Priorities and Set Asides
- License Priorities / Set Asides:
Arizona does have specific licenses set aside for social equity licensees. Twenty-six adult-use Marijuana Establishment licenses will be issued to applicants who qualify under the social equity ownership program.
Fee Waivers and Reductions
- Fee Waivers / Reductions:
Arizona does offer fee waivers and reductions to social equity applicants. In Arizona, the normal application fee for an initial license is $25,000 this price includes both the application fee and initial licensing fee together. The cost to subsequently renew a license is $5,000.
Social Equity applicants submitting an application for an initial marijuana establishment license have a reduced nonrefundable application fee of $4,000 which also includes the initial license.
Direct Funding for Social Equity Applicants and Licensees
Arizona does appropriate money to support its social equity program. Arizona law designates $2,000,000 from the Medical Marijuana Fund to be transferred by November 30, 2020, to the Department of Health Services to develop and implement a social equity ownership program. It is unclear what amount will be given to the program annually.