Arizona’s Attorney General is cracking down on unlicensed THC sales, and it’s causing a major fight between the state and hemp retailers and distributors.
For years, THC-infused drinks, snacks, and gummies have been popping up at gas stations, liquor stores, and wellness shops. But now, the state says those products could be illegal.
While recreational marijuana is legal in Arizona, this threat of legal action and lawsuit is not about cannabis flower or THC products sold at dispensaries with marijuana retail licenses
Instead, they’re made with hemp-derived THC like Delta-8, products which operate in a legal gray area thanks to a loophole in federal law.
In a legal opinion in 2024. Arizona Attorney General Kris Mayes said these products are not legal to be sold by retailers that are not licensed marijuana establishments.
In a letter last month to law enforcement and retailers, Mayes clarified the state's stance and issued a warning
“All THC-infused edible products cannot be sold in Arizona by an unlicensed entity… federal law does not preempt Arizona's more stringent State laws," she wrote.
Retailers were given 30 days to pull these products or risk fines and even jail time, the deadline being April 24.
But in response, the Arizona hemp industry filed a lawsuit to block the AG's move, arguing that these products are federally legal and that small businesses will suffer.
Mohamed Lotfy, who owns Wake-N-Bakery in Tempe, says getting a marijuana license isn’t realistic for shops like his in comparison to large dispensaries.
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“The big difference is those people had to go through this process because they are selling a federally illegal item, so the state had to issue a special license for it, but we are selling completely federally compliant and legal items,” Lotfy said.
The Hemp Industry Trade Association's Executive Director, Sully Sullivan, says this could wipe out thousands of jobs and hurt consumers and businesses.
“Her letter effectively destroys the entire hemp industry, which is composed of thousands of businesses, thousands of employees," he said.
The Arizona Dispensaries Association supports the Attorney General, saying THC products should only be sold at licensed dispensaries.
The AG’s office isn’t commenting ahead of Thursday’s hearing, where a judge will decide if enforcement moves forward — or gets put on hold.
That hearing is set for 3 p.m.
