MJBizMag October 2020 - 15
The bottom line for Arizona: Some
strong independents and social equity
licensees will be in play, but MSOs
could easily dominate the state's
cannabis landscape after adult-use
marijuana is legalized.
A Rigged System?
One can make the argument that existing
MMJ operators took the initial risk,
invested a lot of money and therefore
should be rewarded with the inside
track in adult-use markets. It also
avoids the kind of litigation issues that
come with licensing rounds.
But the process also can make
it extremely difficult for additional
licensees to break in.
One of the most notable examples
is Florida's medical cannabis market,
where the first operator out of the
gate, Trulieve, continues to dominate
with a roughly 50% market share.
Illinois also gave existing MMJ
operators the first crack at the adultuse
market, which launched Jan. 1.
The state had contemplated a
relatively short head start: Regulators
intended to award additional retail
licenses in May and cultivation
and processing licenses in July.
But the coronavirus pandemic has
delayed those licensing rounds and
complicated the rollout of the state's
much-vaunted social equity program.
If the marijuana industry is intent
on providing more than just lip service
to diversity, it will need to figure
out a way to work with regulators to
fast-track social equity applicants,
perhaps as financially supported
microbusinesses.
Many of the adult-use license
applicants are incurring expenses
while they wait. The delays also could
make it more difficult for licensees to
break into what is rapidly becoming
an established adult-use market.
Of course, later entrants often
do well, learning from the failures
of others and taking advantage of
underserved areas and product
niches such as craft cannabis.
But overall, the scheme to fasttrack
MMJ operators looks as if it will
benefit MSOs the most. The giants will
dominate, perhaps even faster than
they would otherwise.
Jeff Smith covers politics and
regulations for Marijuana Business
Magazine. You can reach him at
jeff.smith@mjbizdaily.com.
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MJBizMag October 2020
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