Arizona Marijuana Sales Surpassed $1.4 Billion In 2023, With Bulk Of Transactions Coming From Adult-Use Buyers

Recreational sales amounted for more than 76% of the total, an increase from the 70% of sales it represented in 2022. In 2021, the first year adult-use recreational sales were legal, they were just 45 percent of the total.

By David Abbott, Arizona Mirror

Arizona cannabis sales totaled more than $1.4 billion for the third consecutive year in 2023, as medical sales continued to tank and recreational buyers made up an overwhelming share of the sales.

The maturation of the market has followed a trajectory throughout the brief history of the passage of the Smart and Safe Arizona Act, Prop. 207, in 2020, leaving medical sales in the dust at less than one-third that of the recreational market.

Recreational marijuana sales for 2023 totaled about $1.1 billion, and medical contributed $348 million for total 2023 sales reaching $1.43 billion. Recreational sales amounted for more than 76 percent of the total, an increase from the 70 percent of sales it represented in 2022. In 2021, the first year adult-use recreational sales were legal, they were just 45 percent of the total.

Since January 2021, recreational sales have totaled $2.8 billion, while medical has brought in slightly more than half that at $1.65 billion.

The medical market dropped below $40 million in July 2022, and has not come near that mark in the ensuing months. Medical sales reached a peak of $73.4 million in April 2021, but since the inception of the dual market, medical sales have reached new lows seemingly every month.

Recreational sales, which began in late January 2021, have fluctuated between $80 million and $93.5 million since July 2022. Since then, they hit a high-water mark of $100 million in March 2023 settling in at the mid- to lower-$80 million range.

But recreational sales did dip in January 2024, registering just $76.8 million, the lowest since February 2022’s $72.8 million. It is the first time since June 2022 that monthly recreational marijuana sales fell below $80 million.

The medical side has seen consecutive record-worst months, coming in at $25.4 million in December 2023 and just $21.5 million in January 2024.

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

In January, medical sales contributed $1.8 million in sales tax revenue and recreational was nearly $12.3 million in excise tax, with an additional $6 million in state sales tax. For the entirety of  2023, the recreational market contributed $172.8 million in excise tax; since January 2021, recreational sales have generated more than $451 million in excise taxes.

One-third of revenue raised by the excise tax is dedicated to community college and provisional community college districts; 3 percent to public safety, including police, fire departments, fire districts and first responders; 25 percent to the Arizona Highway User Revenue Fund; and 10 percent 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 has reported a steady decline in medical cannabis program participation, as the number of qualifying patients continues to drop every month.

As of February, there were 111,168 qualifying patient cardholders, a drop from January’s 113,694, which was in turn 2,000 patients below the 115,914 in December 2023. At the height of the medical market, there were 299,054 qualifying patients.

In February, Arizona medical cannabis consumers purchased 4,754 pounds of marijuana in various forms, down from 4,808 reported in January. So far this year, Arizona medical marijuana patients have purchased 9,562 pounds.

This story was first published by Arizona Mirror.

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Photo courtesy of Chris Wallis // Side Pocket Images.