$1 Billion in Cannabis Sales Reached in Arizona

Adult-use cannabis was legalized in Arizona in 2020 (1). In September 2023, the Grand Canyon state reached $1 billion dollars in cannabis sales and since that time, have surpassed their revenue numbers for the year (2). According to reports from the Arizona Department of Revenue (ADOR) (2), medical cannabis sales are around one-third of adult-use recreational. This tendency has shown itself repeatedly throughout the year and made history in Arizona for the lowest medical cannabis sales to be reported (2).

In September 2023, sales for medical use were under $27 million. The previous month (August 2023) were reported to be $28.7 million in cannabis sales (2). The adult-use program in the state first started in January 2021 (2) and has battled with the medical-use program, often outdoing it since recreational cannabis’s introduction.

Since April 2021 where it was documented to be $73.4 million, medical cannabis has only decreased in sales (2). The highest sales in 2023 in Arizona was $30 million hit in June. The previous year (June 2022) reached $40 million. Since June 2022, medical cannabis sales have not hit or outdone those numbers (2).

The Arizona Department of Revenue constantly updates their revenue numbers. For example, the department originally stated that July 2023 medical cannabis revenue was $26.1 million but increased the month’s total to $27.3 million (2). In regard to recreational cannabis sales, the same month was originally reported as being $77.4 million but has since been updated to $80.5 million (2).

According to the AZ Mirror (2), “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. That was the first month that recreational sales outpaced medical sales. The state has collected $2.4 million and $2.2 million in taxes from medical sales in August and September, respectively, and $13.7 million and $12.8 million from recreational sales.”

Arizona receives $16% of excise tax stemming from recreational cannabis sales, on top of the standard sales tax (2). AZ Mirror reported that medical cannabis patients end up paying an estimated 6% in state sales tax and local governments are able to enforce cannabis sales, regardless of recreational or medical use, an additional 2% sales tax (2).

The AZ Mirror also reported that Arizona’s taxes are used in a variety of ways (2), “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.”

References

1. Adult Use Marijuana https://azdor.gov/business/transaction-privilege-tax/adult-use-marijuana#:~:text=Proposition%20207%2C%20the%20Safe%20and,in%20Arizona%20Revised%20Statutes%20(A.R.S.) (accessed Dec 11, 2023).
2. Abbott, D. Arizona Marijuana Sales Surpass $1 Billion in 2023 https://www.azmirror.com/blog/arizona-marijuana-sales-surpass-1-billion-in-2023/ (accessed Dec 11, 2023).