Pot Lotto: 13 Rural Dispensary Licenses Valued in Millions Will Be Chosen Today

An accounting firm hired by the state will conduct a lottery to chose the recipients of 13 new marijuana licenses.
An accounting firm hired by the state will conduct a lottery to chose the recipients of 13 new marijuana licenses. Image by Alejandro Garay from Pixabay
Thirteen lucky winners will be selected at random by the state this afternoon to become instant millionaires.

This isn't your classic lottery, however. The person pulling ping-pong balls from a lottery machine works for an accounting firm hired by the state Department of Health Services, and the prize is the right to manufacture and sell marijuana in one of Arizona's rural counties. The entrance fee is a bit more than the $2 for a Powerball ticket: It costs $25,000 just to apply, as well as proof of an additional $500,000 set aside in liquid capital and a confirmed, secure dispensary location.

The application fee will be well worth it for the 13 lucky, and financially flush, winners. The adult-use legalization measure that Arizona voters passed in November caps the number of recreational licenses the state can issue at roughly the current number of medical marijuana licenses.

DHS spokesperson Steve Elliott told Phoenix New Times last month that every medical dispensary in the state had secured a recreational license, meaning these 13 licenses will be the only chance to break into the market, until the state issues 26 "social equity" licenses at a to-be-determined date using to-be-determined criteria.

Demitri Downing, founder of MITA-AZ, the Arizona Marijuana Industry Trade Association, told New Times that he estimates the licenses are worth $5 million each, at a bare minimum.

"Some people I know are going to become millionaires and some people I know who are millionaires are going to become uber-millionaires," he said.

Downing estimates that around three-quarters of applicants are interested in the value of the licenses more than the value of running a cannabis business, but he said the new licenses are a plus for rural communities as existing licenses have gravitated to urban cores. He credited the DHS for using a transparent and random drawing to assign the licenses.

The new legalization law allows the state to issue licenses in counties that have less than two existing dispensaries. Apache, Gila, Greenlee, La Paz, and Santa Cruz counties will each get two new dispensary licenses, and Cochise, Graham, and Yuma counties will each get one.

The state has used similar lotteries to distribute licenses, including the initial 99 licenses, in the past.

In total, DHS received 355 completed applications for these 13 licenses. Each application is assigned a numbered ball, and the numbers will be drawn county-by-county at 3:30 p.m. today.

Press access is limited due to COVID-19, but you can watch a livestream here. Officials estimate that the event will take about 30 minutes. Phoenix New Times will update this article after the drawing.

Update: Here are the winners by county.

Apache - Apache County Dispensary LLC; Springerville Smoke, LLC
Cochise - Formula 420 Cannabis, LLC
Gila - Gila Dreams X, LLC; Lawrence Health Services LLC
Graham - Piper's Shop LLC
Greenlee - 101010 Management LLC, Sonoran Flower LLC
La Paz - AGI Management LLC, FJM Group LLC
Santa Cruz - Cactus Bloom Facilities Management LLC, MK Associates LLC
Yuma - Yuma County Dispensary LLC
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Erasmus Baxter is a staff writer for Phoenix New Times.
Contact: Erasmus Baxter