Fennemore cannabis attorney Janet Jackim served as legal counsel to two Arizona-licensed medical and adult-use dispensaries in the sale of cannabis licenses, operations, and associated real estate, marking a significant milestone in Southern Arizona’s regulated cannabis market. These dispensaries were dually licensed to cultivate, manufacture, deliver, and sell to the public and to other wholesaling dispensaries, both medical and adult-use marijuana.
Other key deal terms included the long-term leasing of the dispensaries’ cultivation facility and seller-provided carryback financing. In anticipation of the then-pending rescheduling of medical marijuana from the Controlled Substances Act’s Schedule I to a Schedule III classification, smart negotiations delivered a greater purchase price to the sellers.
This sale marks a significant milestone for Arizona’s regulated cannabis market, consisting of only 180 dispensary licenses serving 5.6 million adults. No other license for cultivation, transport, or manufacturing is issued by the State. Consequently, many of the dispensaries are vertically integrated, owing and operating their cultivation and manufacturing facilities while also distributing marijuana to the public in a seed to sale continuum. Arizona is also referred to as a ‘closed’ marketplace, in that the State’s regulatory authority, the Arizona Department of Health Services, may only issue new dispensary licenses when the ratio of open and operating pharmacies to marijuana licensees exceeds 10:1. As a result, dispensary licenses are valuable.
Fennemore cannabis and real estate attorney Janet Jackim served as legal counsel to the sellers. “These consolidating transactions underscore continued investor confidence in well-established cannabis operators with proven track records and strategically located real estate,” said Jackim. “As a limited license state, Arizona remains one of the more robust cannabis markets in the United States, driven by consistent demand, few dispensary licenses, and a stable regulatory framework.”