With 75 percent of votes counted, 60 percent of voters are favoring Proposition 207, the Smart and Safe Arizona Act.
Arizona's cannabis industry association celebrated an early victory after initial results came in showing the legal marijuana well ahead.
People at the Marijuana Industry Trade Association of Arizona Zoom watch party chanted "We love weed!" and popped bottles of champagne after initial results showed the initiative up 60 percent.
Sam Richard, executive director of the Arizona Dispensaries Association, initially urged caution but sounded confident as he left the party around 8:30 p.m.
"Congratulations to the industry, congratulations to patients... this is such a great night," Richard said.
The initiative would allow adults 21 and older to legally possess up to an ounce of marijuana and five grams of concentrates, and grow six plants. It also provides for the establishment of licensed dispensaries built on top of the current medical marijuana system.
Pro 207 campaign manager Stacy Pearson told Phoenix New Times, "I think the big message is that the war on drugs is a failure and Arizona voters know it." While COVID-19 prevented any gathering, she said they were celebrating via Zoom.
This is the second time Arizona has voted on an initiative to legalize recreational marijuana since authorizing the use of medical marijuana in 2010 by a razor-thin margin. The most recent effort, Proposition 205, fell short in 2016, with only 48.7 percent of voters supporting the measure against the 51.3 percent opposed.
This time around, the initiative drew less attention in a crowded field as many of its opponents focused on Proposition 208 instead. The campaign in favor of the measure raised a total of $5.5 million to the opposing campaign's $833,000, mainly pitting a small number of wealthy conservatives against the heft of Arizona's prosperous medical-marijuana industry.
Polls have consistently pegged Prop 207 as likely to pass, with even online betting site MyBookie.ag favoring it significantly as of Monday.
Getting on the ballot involved a costly legal fight that went all the way to the state Supreme Court, following a challenge by Arizonans for Health and Public Safety, which claimed the summary of the measure distributed to the 420,000 petition signers was misleading. The court unanimously denied the challenge.
Arizona will be the 12th state to approve recreational cannabis use by adults, including neighboring California, Nevada, and Colorado. Three other states are voting on marijuana legalization measures in this election: South Dakota, Montana, and New Jersey.
Kris Krane, the former associate director of the National Organization for the Reform of Marijuana Laws (NORML), who now owns a national cannabis investment firm, said that the presidential election might help Prop 207's chances.
"If only because presidential elections tend to turn out more young voters," he said. Even though the last presidential election was not enough to marijuana legalization the boost it needed, cannabis initiatives have tended to gain 1 percentage point of popularity each year, according to Krane. If legalization passes, Arizona will not be a pioneer, but is still an earlier adopter, he said
"It would arguably be the reddest state to go legal at this point," Krane said. (It would likely be Alaskans, who voted for recreational marijuana in 2014, who would argue with that.)
Passing the initiative would make a big difference for the average of nine people arrested by Phoenix police each day on charges of basic marijuana possession. Of those 3,400 people arrested each year, 90 percent are booked into jail, Phoenix New Times has found. An ACLU report from last year found that Black people were three times as likely to be arrested for marijuana possession as white people in Arizona.
The proposition would also allow people convicted of possession of certain amounts of marijuana or paraphernalia to petition the court for their record to be expunged. Prosecutors could also petition for expungement on behalf of the people they convicted on charges covered under the initiative.
The initiative also requires the state to devise a program to issue 26 licenses under a "social equity ownership" program that will promote ownership and operation of marijuana facilities by people from communities disproportionally impacted by current marijuana laws.
Some have criticized the initiative as not going far enough to address the racist impacts of marijuana prohibition, noting that people previously incarcerated for selling marijuana have been shut out of the industry in some states where legalization has passed. Statistics show that legalization has not been a cure-all to racial disproportionalities in marijuana offenses. While arrests overall have dropped in states with legalized marijuana, the racial imbalance within arrests has actually increased in some states.
Progressive group Living United for Change in Arizona (LUCHA) even took out ads to criticize portions of Prop 207 that allocate cannabis tax money to go to police and fire departments, and the lack of a clear path to expungement.
Jerrico Perez, a senior associate with the Vicente Sederberg LLP law firm who has handled recreational marijuana licensing in a number of states, said the biggest question will be how the "social equity" licenses play out. As the total number of licenses is capped and the state is required to issue recreational licenses to early applicants within 60 days, it's likely the only new businesses entering the market will be those issued through the social equity program.
"There's certainly not going to be a surplus of licenses," Perez said.
Prop 207 doesn't offer any specifics on the program besides the number of licenses, and the requirement for the state to figure out the rules. While much of the conversation around communities disproportionally affected by marijuana prohibition has centered on race, Perez said it's unlikely that will be explicitly factored into the license distribution, since similar efforts previously have been found unconstitutional in other states. Instead, it's possible that the state could establish licensee eligibility based on past marijuana convictions, or on ZIP codes.
With existing dispensaries having an up-to-six-month lead on anyone issued a social equity license, it will be up to the state to make sure the people receiving the new licenses aren't "straw men" for existing business interests and can stand on their own in the competitive market, Perez said. One bright point is that the cap on the number of licenses means the market is unlikely to be saturated, she said.
One other issue that still needs to play out is how local jurisdictions will accommodate marijuana businesses. They can ban or restrict businesses under the initiative, and last month, the town of Gilbert voted to ban new marijuana dispensaries, creating a de facto monopoly for the dispensary already there.
Update: Lisa James of Arizonans for Health and Public Safety released a statement at about 10:30 p.m:
"It is a sad day, not just because Arizona, especially Arizona’s children, will suffer the consequences of legalizing recreational marijuana – but also because Prop 207 was borne out of deceit and self-interest. The marijuana industry misled voters in order to pass this self-serving measure... Prop 207 may have won, but Arizonans lost."