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AZ cannabis sales dipped at the end of spring

By: - August 22, 2023 2:08 pm

Photo by Kevork Djansezian | Getty Images

Arizona’s marijuana market trended downward in May, according to the latest numbers released by the Arizona Department of Revenue, as adult-use, recreational sales dipped to $82.9 million, while medical cannabis sales dropped to just $28.3 million, the lowest since recreational sales began in January 2021.

Medical sales have declined consistently since reaching a peak of $73.3 million in April 2021. By July of that year, medical cannabis sales dropped below $40 million for the first time. The market has never recovered. 

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Since September 2022, medical sales have hovered around $30 million. 

The recreational market has nearly tripled those figures for several months in 2023, and the trend has continued through the most recent report.

Recreational sales were initially estimated at more than $100 million in March, but ADOR revised that total down by about $1 million in May. At the same time, it increased estimated sales in April from $86.5 million to $90.1 million.

May’s total was the lowest since September 2022, when ADOR reported sales at $80.9 million.

Since recreational sales began 29 months ago, the medical market has sold $1.4 billion in product, while the recreational side has surpassed $2 billion in sales. The Smart and Safe Arizona Act, which voters approved in 2020, legalized marijuana possession and use for adults over the age of 21.

The first time combined medical and recreational sales hit the $100 million mark was in March 2021, when medical sales were slightly more than $73 million and recreational hit $59 million.

Since then, overall cannabis sales have topped $100 million every month.

The last time recreational and medical sales were anywhere near equal was October 2021, when adult-use sales were $65.8 million and medical sales were $64.4 million.

Taxes collected on recreational sales in May were $13.3 million and the total for both programs was $15.6 million.

The state collects a 16% excise tax on recreational sales in addition to the standard sales tax; medical patients pay roughly 6% in state sales tax. Local jurisdictions charge an additional 2% or so for all marijuana sales.

The excise tax on adult-use marijuana sales has yielded about $182.3 million so far in 2023. In 2021, recreational cannabis generated $32.9 for eleven months of sales, and in 2022 that number jumped to $132.8 million. Since the program launched, the state has collected more than $348 million in marijuana excise taxes.

One-third of those taxes are dedicated to community college and provisional community college districts; 31% to public safety, including police, fire departments, fire districts and first responders; 25% to the Arizona Highway User Revenue Fund; and 10% to the justice reinvestment fund, which is dedicated to providing public health services, counseling, job training and other social services for communities that have been adversely affected and disproportionately impacted by marijuana arrests and criminalization.

The Arizona Department of Health Services reports that, as of July, there were 126,938 qualifying patient cardholders, down from 127,288 in May and less than half of the 299,054 qualifying patients reported in January 2021 at the beginning of recreational sales.

Through July, Arizona medical cannabis consumers have purchased 4,620.7 pounds of marijuana in various forms. The total for June was 4,761.85 lbs.

***CORRECTION: An earlier version of this story incorrectly stated that Arizona adults must be at least 18 to legally use cannabis; the correct legal age is 21.

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David Abbott
David Abbott

David Abbott is a freelance journalist living in Tucson. He originally came to Tucson while serving in the Air Force from 1978 to 1982, but left to seek his fortunes in California where his passion for journalism took hold. His editorial career has taken him from Northern California to rural Arizona as a writer, editor and newspaper production manager for several weekly newspapers, magazines and assorted publications. After accepting a position as editor of the Arizona Silver Belt in Globe in 2018, he returned to Tucson the following year to enjoy the mountains and write about cannabis and community news.

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