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The state’s adult-use marijuana sales fell to $73.1 million in November, the lowest monthly total since September and a sign of continuing market contraction.
Medical marijuana sales also
declined, reaching $16.5 million in November — the lowest on record
since legal recreational cannabis sales began — and continuing a
multiyear trend of shrinking medical cannabis revenue as patients
increasingly turn to the recreational market.
The latest figures
from the Arizona Department of Revenue highlight a broader downturn in
Arizona’s cannabis market. Through November, recreational dispensaries
recorded $906 million in sales while medical dispensaries logged $224
million, putting the market on track to finish well below the $1.42 billion in total sales seen in 2023 and $1.43 billion in 2022.
The decline is particularly stark in the medical sector, which has seen sales plummet
37.3% from 2023 levels and 57% since 2022. Adult-use sales are down
14.5% from 2023, when the market hit a peak of $1.06 billion in
recreational sales.
Tax collections reflect this downward
trend. Through November, Arizona collected $245.3 million in marijuana
taxes, including $151.2 million in excise taxes, $75.7 million from
recreational sales, and $18.5 million from medical sales.
Under the terms of Proposition 207,
which voters approved in 2020, 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.
One-third of revenue raised by the
excise tax is 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 revenue department’s latest sales
and tax report also included substantial upward revisions to previously
reported figures. October’s adult-use sales were adjusted up by $7.2
million to $82.5 million, while September saw a $7.9 million upward
revision to $75.2 million. These revisions follow a pattern of
significant adjustments as late tax returns are processed.
Arizona’s market contraction mirrors
trends seen in other mature cannabis markets. Colorado, which legalized
recreational use in 2012, saw its first significant year-over-year
decline in 2022. Oregon experienced similar market adjustments, with
price compression and competition leading to decreased revenue even as
unit sales remained stable.
The downturn likely reflects several
factors common to maturing cannabis markets: price compression from
increased competition, market saturation following initial legalization
excitement and reduced cannabis tourism as neighboring states legalize
sales.
“}]] Arizona’s adult-use marijuana sales fell to $73.1 million in November, the lowest monthly total since September and a sign of continuing market contraction. Read More
