Arizona Smoke Shops Struggle as New THC Enforcement Tightens Shutter on Business

A lawsuit has been filed against the attorney general to reverse a recent decision impacting THC product sales.

TEMPE, Ariz. — Businesses selling THC products that aren’t licensed dispensaries now face significant penalties, including felony charges and potential fines up to $20,000. This enforcement action, announced by Attorney General Kris Mayes in March, took effect recently and has already affected local businesses.

Joanna Materon, manager of Main on Mill Smoke Shop in Tempe, reported drastic changes. Shelves that once held THC-infused products, including edibles and creams, are now nearly empty. “We definitely lost those few customers that we had,” she stated, noting a decline in sales among elderly customers seeking lower-THC alternatives.

Other businesses, like Wake and Bakery, have also been impacted, placing signs announcing the temporary suspension of cannabinoid sales.

Tina Ulman, CEO of Grow Up Co-Op, which markets these products, expressed her frustration. “I personally have lost every single client,” she said, adding that layoffs have been necessary due to the sudden market shift.

Many consumers preferred low-THC options for their manageable effects. “Not everyone wants a 30 or 80% product from a dispensary,” Ulman explained. “People want something that will give them a small effect, but where they still feel in control.”

Attorney General Mayes is pursuing unlicensed sellers under Proposition 207, which legalized cannabis in Arizona in 2020. She emphasized the need for regulations to prevent minors from accessing high-THC products.

However, industry representatives contest this interpretation. Julie Gunnigle, an attorney for the hemp sector, described the situation as “prohibition 2.0,” arguing that selling low-THC products is legal under the 2018 Federal Farm Bill. She pointed out the significant economic impact, noting that about 8,000 jobs and $300 million in wages are at stake.

As legal proceedings unfold, businesses like Materon’s are opting for caution, refraining from selling THC products to avoid further complications.