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Arizona’s recreational marijuana market showed signs of stabilization in October, with dispensaries selling $75.3 million in adult-use cannabis products, up from September’s $67.3 million, according to the latest data from the Arizona Department of Revenue.
The medical marijuana sector continued its long-term decline, with October sales falling to $16.9 million, marking one of the lowest monthly totals since Arizona voters approved recreational sales in 2020.
The latest revenue report also included substantial upward revisions to previous months’ data. September’s recreational sales were adjusted to $74.9 million, an increase of $7.6 million from initial estimates. And March sales were revised up by $3.1 million to $92.5 million, establishing a new peak for monthly recreational sales in 2024.
Through October, Arizona’s marijuana market has generated more than $1 billion in total sales for 2024, with recreational dispensaries recording approximately $808 million and medical dispensaries logging $204 million. However, the current sales pace suggests the market will fall significantly short of 2023’s total sales of $1.4 billion.
Even with the projected decline in overall sales, the shifting balance between medical and recreational sales has accelerated in 2024. While medical marijuana represented 21.5% of total sales in January, that share dropped to 17.5% by September. This continues a transformation that began when recreational sales launched in 2021, when medical marijuana — legal in Arizona since 2010 — initially dominated the market. Now, recreational sales consistently outpace medical sales by a roughly 4-to-1 margin.
Total marijuana tax collections reached $222.1 million through October, including $68.5 million from recreational sales and $136.6 million in excise taxes. Medical marijuana generated an additional $17 million in tax revenue. These figures represent a decline from both 2023 and 2022, when strong sales and a robust medical market drove higher tax collections.
The state collects a 16% excise tax on recreational sales in addition to the standard sales tax, while medical patients pay roughly 6% in state sales tax. Local jurisdictions add approximately 2% for all marijuana sales.
Tax revenue supports various state programs, with excise tax funds distributed among community colleges (33%), public safety (31%), highway projects (25%), and social services programs (10%) aimed at communities disproportionately impacted by marijuana criminalization.
The revenue department notes that recent months’ data may be revised as additional tax returns are processed, as demonstrated by the significant adjustments to previously reported figures in the November report.
This story was first published by Arizona Mirror, which is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity.
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