Java annotation processing for Android unit testing (w/ Dagger)

I am attempting to set up Android unit tests in Android Studio 1.0 using DI from Dagger version 1.2.2.

Whenever I run my tests and I attempt to instantiate an ObjectGraph with my test module, I get the following error/stacktrace:

java.lang.IllegalStateException: Module adapter for class java.util.Arrays$ArrayList could not be loaded. Please ensure that code generation was run for this module.
at dagger.internal.FailoverLoader$1.create(FailoverLoader.java:45)
at dagger.internal.FailoverLoader$1.create(FailoverLoader.java:40)
at dagger.internal.Memoizer.get(Memoizer.java:56)
at dagger.internal.FailoverLoader.getModuleAdapter(FailoverLoader.java:57)
at dagger.internal.Modules.loadModules(Modules.java:43)
at dagger.ObjectGraph$DaggerObjectGraph.makeGraph(ObjectGraph.java:174)
at dagger.ObjectGraph$DaggerObjectGraph.access$000(ObjectGraph.java:138)
at dagger.ObjectGraph.create(ObjectGraph.java:129)
at com.company.app.HttpRequestManagerTest.setUp(HttpRequestManagerTest.java:35)
at android.test.AndroidTestRunner.runTest(AndroidTestRunner.java:191)
at android.test.AndroidTestRunner.runTest(AndroidTestRunner.java:176)
at android.test.InstrumentationTestRunner.onStart(InstrumentationTestRunner.java:555)
at android.app.Instrumentation$InstrumentationThread.run(Instrumentation.java:1837)

Here is the breaking code (@ ObjectGraph.create):

@Override
public void setUp() throws Exception {
    super.setUp();
    setContext(new MockContext());
    mObjectGraph = ObjectGraph.create(Arrays.asList(new TestModule()));
    mObjectGraph.inject(this);
}

Diving deeper, here is the TestModule:

package com.company.app.provider;

import dagger.Module;

@Module(
        overrides = true,
        library = true
)
public class TestModule {

}

It seems as though it's indicating that Java annotation processing is not active, but I don't think that's the case as I'm using other annotations such as @Override in my code without issues. I'm wondering if somehow the Dagger annotation processor is not being applied to the test build. Here is my build.gradle for what it's worth:

apply plugin: 'com.android.application'

android {
    compileSdkVersion 21
    buildToolsVersion "21.1.1"

    defaultConfig {
        applicationId "com.company.app"
        minSdkVersion 14
        targetSdkVersion 21
        versionCode 1
        versionName "1.0"
    }
    buildTypes {
        release {
            minifyEnabled false
            proguardFiles getDefaultProguardFile('proguard-android.txt'), 'proguard-rules.pro'
        }
    }
    packagingOptions {
        pickFirst 'META-INF/services/javax.annotation.processing.Processor'
    }
}

ext {
    daggerVersion = '1.2.2'
    mockitoVersion = '2.0.3-beta'
    powerMockVersion = '1.5.4'
}

dependencies {
    compile fileTree(dir: 'libs', include: ['*.jar'])
    compile 'com.android.support:appcompat-v7:21.0.3'
    compile 'com.android.support:support-v13:21.0.0'
    compile 'io.realm:realm-android:0.77.0'
    compile 'com.squareup.okhttp:okhttp:2.2.0'
    compile 'com.jakewharton:butterknife:6.0.0'
    compile "com.squareup.dagger:dagger:$daggerVersion"
    provided "com.squareup.dagger:dagger-compiler:$daggerVersion"
    androidTestCompile "org.mockito:mockito-core:$mockitoVersion"
}

The only fishy thing I could find here was the pickFirst 'META-INF/services/javax.annotation.processing.Processor', but that is necessary to overcome a known Butterknife issue.

Any input is greatly appreciated, thanks!