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What MedMen’s Exit From Arizona’s Marijuana Market Means For Legalization In 2020



With MedMen announcing its plans to exit Arizona’s medical marijuana market last month, some observers are left wondering where that leaves a campaign to legalize cannabis for adult use in the state—an effort that has received substantial financial contributions from the company.

The multi-state marijuana dispensary chain said that it will be selling its three vertically integrated licenses in Arizona as part of a restructuring amid an economic downturn in the cannabis industry. While the company expects to generate tens of millions of dollars from the sales and plans to continue investments in various other state markets, it departure from Arizona comes at a pivotal time.

MedMen has donated $200,000 to Smart & Safe Arizona, the campaign working to put a recreational legalization measure on the state’s 2020 ballot. That’s a sizable chunk of the $1.6 million in contributions that the campaign has reported to the secretary of state’s office so far, with the company trailing only Harvest Enterprises Inc. and CuraLeaf in top contributions.

But in an email to Marijuana Moment, campaign manager Stacy Pearson said organizers don’t expect the development to have any effect on the legalization effort.

“MedMen’s sale of its Arizona licenses won’t impact the campaign,” Pearson said. “MedMen’s leadership provided guidance during the development of the initiative and fulfilled their financial commitment of $200k.”

“To date, the campaign has raised more than $1.6 million from 53 donors—the majority of which has been raised from in state dispensary owners,” she said.

Arizona might not be the biggest state with respect to the size of its marijuana industry, but medical cannabis sales did increase there by 41 percent from 2017 to 2018. Could it then be the case that the decision to leave the Grand Canyon State had something to do with MedMen’s expectations about the likelihood that adult-use legalization will qualify for the ballot and pass in November?

The company’s exit could be seen as a sign that executives don’t believe the legalization push in Arizona will be successful; if voters approve legalization this year, MedMen would presumably stand to benefit from the expansion of the state’s legal cannabis market to all adults over 21, instead of just patients with doctors’ recommendations.

If the company is turning to the past to predict the future, it is true that Arizonans narrowly rejected a recreational legalization initiative in 2016. But advocates have been optimistic that this time around—with big-dollar contributions coming in and a growing consensus that legalization is the right move—such a measure stands a much stronger chance of passing.

In a recent interview with Marijuana Business Daily, MedMen CEO Adam Bierman didn’t discuss the specific reasoning behind its sale of the Arizona licenses but said the company “made an error in judgment” by aggressively building its brand in a variety of state markets, and he added that the states its currently operating in “have the real estate that builds brands.”

Marijuana Moment reached out to Bierman for comment on whether politics played a role in MedMen’s market shift or whether it plans to continue to fund the legalization campaign, but a representative said the CEO could not be made available for an interview.

While Arizona might not be a growth target for the cannabis corporation at this point, MedMen did emphasize that it will continue investing in other markets such as Illinois, Nevada, New York and Florida.

In Florida, MedMen has contributed significant funds to Make It Legal Florida, an effort to put a marijuana legalization measure on the state’s 2020 ballot.

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Photo courtesy of Philip Steffan.

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