Ariz. Admin. Code § R9-18-303 - Applying for an Initial Marijuana Establishment License

A. To apply for an initial marijuana establishment license, an applicant shall electronically submit to the Department, during the application period specified according to R9-18-302(A)(1):
1. The following information in a Department-provided format:
a. The legal name of the proposed marijuana establishment;
b. The physical address of the proposed marijuana establishment's retail site;
c. The county in which the proposed marijuana establishment's retail site is located;
b.d. The following information for the applicant:
i. Name of the entity applying,
ii. Type of business organization,
iii. Arizona mailing address,
iv. Telephone number, and
v. E-mail address;
c.e. The name, residence address, and date of birth of each principal officer and each board member, according to R9-18-301;
d.f. The name, residence address, and, if applicable, date of birth of any person who is entitled to 10% or more of the profits of the proposed marijuana establishment;
e.g. Whether the applicant agrees to allow the Department to submit supplemental requests for information;
f.h. An attestation that, if the applicant is issued a marijuana establishment license, the proposed marijuana establishment will not operate until the proposed marijuana establishment is inspected and obtains an approval to operate from the Department;
g.i. An attestation that the applicant understands and will comply with the requirements in A.R.S. Title 36, Chapter 28.2, and this Chapter;
h.j. An attestation that information provided to the Department to apply for a marijuana establishment license is true and correct; and
i.k. The signatures of each principal officer and each board member of the proposed marijuana establishment according to R9-18-301 and the date signed;
2. Documentation that the applicant is in good standing with the Arizona Corporation Commission;

3. Documentation that the applicant is eligible to apply under A.R.S. § 36-2854(A)(9), as specified in subsection (B);

4.3. For each principal officer and each board member listed according to subsection (A)(1)(e), documentation of the principal officer's or board member's marijuana facility agent license;

5. An attestation from each principal officer and each board member listed according to subsection (A)(1)(c) that, neither the principal officer or board member nor the applicant have, directly or indirectly, entered or promised to enter into any agreements for a change in "ownership" as defined in subsection (E), that will cause the applicant to no longer qualify for a marijuana establishment license under subsection (B).

6.4. An attestation, in a Department-provided format, from each principal officer and each board member listed according to subsection (A)(1)(e) that the principal officer or board member:
a. does not have an excluded felony offense, as defined in A.R.S. § 36-2801;
b. Does not have a direct or indirect familial or financial relationship with a marijuana testing facility; and
c. Has not had an ownership interest in a licensed marijuana business that had the license revoked in another state;

7. An attestation from each principal officer and each board member listed according to subsection (A)(1)(c) that the applicant is eligible to apply under A.R.S. § 36-2854(A)(9), as specified in subsection (B);

8. An attestation from each principal officer and each board member listed according to subsection (A)(1)(c) that each principal officer or board member who meets the criteria in subsections (B)(1) and (2) cannot be removed from the principal officer's or board member's position without:

a. The written consent of the principal officer or board member, or

b. A court order for removal of the principal officer or board member; and

9.5. The application fee in R9-18-102(C) for a marijuana establishment license.

B. An applicant is eligible to apply for a marijuana establishment license under subsection (A) if:

1. Each principal officer and each board member according to R9-18-301, by November 17, 2021, has created a facility licensing portal account and accessed the Department-provided educational training course, and, by November 24, 2021, completed the Department-provided educational training course, through the Department's portal system, focusing on:

a. Forming and registering a business in Arizona, which may include:

i. Identifying potential exploitive or predatory offers,

ii. Benefits and drawbacks of different types of business structures,

iii. Purposes and importance of business documents,

iv. Having legal review of potential contracts and documents, and

v. Registering a business with the Arizona Corporation Commission and Arizona Department of Revenue;

b. Obtaining financial backing, which may include:

i. Fundraising and investors,

ii. Financial modeling to estimate past and potential revenue and expenses, and

iii. Creating an executive summary of a business plan;

c. The application and licensing process, which may include:

i. Eligibility,

ii. Application portal,

iii. Required documentation and fees,

iv. Availability of assistance with preparing applications,

v. Review of state laws and rules related to the operation of a marijuana establishment, and

vi. Ensuring compliance with state laws and rules related to the operation of a marijuana establishment; and

d. Information relevant to an applicant that is successful in obtaining a license for a marijuana establishment, which may include:

i. Identifying and obtaining an appropriate location;

ii. Location considerations specific to marijuana establishments;

iii. Employment-related information and considerations;

iv. Marketing, trademarks, and branding; and

v. Other information related to operating a marijuana establishment;

2. One or more of the principal officers or board members of the applying entity holds at least 51% ownership in the entity;

3. Each individual specified according to subsection (B)(2) as being one or more of the principal officers or board members of the applying entity holding an aggregate of at least 51% ownership in the entity meets at least three of the following four criteria:

a. Had an annual household income, as defined in A.A.C. R9-6-401, in at least three of the years 2016 through 2020 that, for the respective year, was less than 400% of the poverty level, as defined in A.A.C. R9-6-401, as shown by:

i. A copy of the applicable portion of an income tax return submitted to the U.S. Internal Revenue Service by the individual or an adult in the individual's household, as defined for the individual in A.A.C. R9-6-401, for the applicable tax year;

ii. If a copy of the applicable portion of an income tax return specified in subsection (B)(3)(a)(i) is not available, a transcript of the income tax return from the U.S. Internal Revenue Service; or

iii. If neither the individual nor an adult in the individual's household, as defined for the individual in A.A.C. R9-6-401, was required to file an income tax return for an applicable year, documentation showing the amount and source of all monetary payments received by the individual and each adult in the individual's household for the applicable tax year;

b. Has been adversely affected by the enforcement of previous marijuana laws because the individual:

i. Has been granted expungement pursuant to A.R.S. § 36-2862, as demonstrated by a copy of the expungement issued by the prosecuting state or jurisdiction; or

ii. Was convicted in Arizona of a violation of federal or state law related to marijuana or marijuana paraphernalia, as demonstrated by a copy of the court's conviction document issued by the prosecuting state or jurisdiction;

c. Has been adversely affected by the enforcement of previous marijuana laws because the individual is or was related during the time-frame specified to another individual who:

i. Was convicted in Arizona of a violation of federal or state laws related to marijuana or marijuana paraphernalia, or is or was eligible for expungement pursuant to A.R.S. § 36-2862, as demonstrated by court documents for the other individual issued by the prosecuting state or jurisdiction; and

ii. Is one of the following, as demonstrated by applicable documentation, specified by the Department, verifying the individual's relationship to the other individual on the date of application or at the time of conviction or the event making the other individual eligible for expungement pursuant to A.R.S. § 36-2862:

(1) Spouse, defined as an individual who is currently married to the other individual;

(2) Surviving spouse, defined as an individual to whom a deceased other individual was married at the time of the deceased other individual's death;

(3) Parent, defined as a biological, an adoptive, or a foster mother or father, including a stepmother or stepfather, whose parental rights are not terminated under A.R.S. Title 8, Chapter 4, Article 5;

(4) Child, defined as a parent's biological, adoptive, or foster child, including stepchild;

(5) Sibling, defined as a full- or half-, biological, adoptive, or foster sister or brother, including a stepsister or stepbrother; or

(6) Legal guardian, defined as a person appointed by a court of competent jurisdiction under A.R.S. Title 8, Chapter 4, Article 12; A.R.S. Title 14, Chapter 5; or another state's laws for the protection of minors and incapacitated persons; or

d. Has lived for at least three of the years 2016 through 2020 at one or more physical addresses each in an area that has been identified by the Department as being disproportionately affected by the enforcement of Arizona's previous marijuana laws, as demonstrated by applicable documentation specified by the Department; and

4. No individual listed according to (A)(1)(c) or (d) has entered into any pre-arranged, tentative, or final agreement or promise to sell or otherwise limit the ownership or interest of any individual listed according to (A)(1)(c) or (d) in the proposed marijuana establishment.

C.B. An applicant shall ensure that no principal officer or board member of the applying entity is a principal officer or board member on more than four other marijuana establishment license applications, for a total of no more than five marijuana establishment license applications, submitted according to subsection (A).
D.C. Before an entity with a marijuana establishment license begins operating a marijuana establishment, the entity shall apply for and obtain an approval to operate a marijuana establishment from the Department.

E. For purposes of subsection (B), "ownership" means that an individual has an interest in an applying entity that:

1. Entitles the individual to at least that portion of distributed profits of the applying entity that is proportional to the percentage of the individual's interest in the applying entity;

2. Ensures that the individual has a percentage of the voting rights in the applying entity that is proportional to the percentage of the individual's interest in the applying entity; and

3. Is not subject to restrictions or assignments of voting rights or other arrangements that causes or may cause benefits derived from the individual's interest in the applying entity to go to another individual due to any circumstance other than voluntary sale of the interest or the individual's death or incapacity.

Notes

Ariz. Admin. Code § R9-18-303
Adopted by final exempt rulemaking at 27 A.A.R. 111, effective 1/15/2021. Amended by exempt rulemaking at 27 A.A.R. 897, effective 6/1/2021. Amended by exempt rulemaking at 27 A.A.R. 2604, effective 10/13/2021. Amended by final exempt rulemaking at 27 A.A.R. 2764, effective 11/5/2021. Amended by final exempt rulemaking at 27 A.A.R. 2862, effective 11/5/2021. Amended by exempt rulemaking at 29 A.A.R. 2453, effective 10/1/2023.

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