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Arizona’s Legal Marijuana Sales Passed $1 Billion Mark For 2023 In September, New Data Shows



Since January 2021, when recreational sales began, the cannabis industry has generated more than $4 billion, with about $2.5 billion coming from recreational sales.

By David Abbott, Arizona Mirror

Cannabis sales in Arizona passed the $1 billion mark for the year in September, as the medical and recreational markets continued a familiar pattern that appears to have solidified over the past several months.

Data from the Arizona Department of Revenue (ADOR) for August and September reports that medical sales remain about one-third that of adult-use recreational, a trend that has persisted throughout the year—and led to the lowest medical use sales figure ever.

Medical sales in September were slightly less than $27 million, a dip from August’s $28.7 million in sales. The latest total represents the lowest in medical sales since competition with the recreational program began in January 2021, after ADOR adjusted the previous low of $26.1 million in July up to $27.3 million.

The last time medical sales were above $30 million was in June, and since June 2022, the medical market has not surpassed $40 million. Medical sales have declined consistently since a peak of $73.4 million in April 2021.

Recreational sales have been more than $80 million since dipping below $90 million in May, following a market record of $100 million in March. ADOR reports that recreational sales were $85.8 million in August and slightly above $80 million in September.

Since the first time the recreational market passed the $80 million threshold in March 2022, it has only failed to reach that mark twice: once in May 2022 at $79.3 million and June 2022 at $77.2 million.

Those numbers may change, though, as ADOR generally adjusts recent months’ numbers with each new report. For instance, ADOR initially reported that medical sales in July were $26.1 million, but the most recent release increased that total to $27.3 million, while recreational sales in July were previously estimated to be $77.4 million, but now are pegged at $80.5 million.

So far in 2023, medical cannabis sales overall totaled $267 million and Arizonans have bought nearly $797 million in recreational marijuana, for a total year-to-date of almost $1.1 billion through September. Since January 2021, when recreational sales began, the cannabis industry has generated more than $4 billion, with about $2.5 billion coming from recreational sales.

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.

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.

The excise tax on adult-use marijuana sales has yielded about $174.5 million so far in 2023. In 2021, recreational cannabis generated $32.9 million 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 $391 million in marijuana excise taxes.

One-third of those taxes are dedicated to community college and provisional community college districts; 31 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 reports on medical cannabis program participation monthly and is generally two to three months ahead of ADOR.

As of October, there were 121,047 qualifying patient cardholders, down from 123,796 in September. At the height of the medical market, there were 299,054 qualifying in January 2021 before the advent of recreational sales.

In October, Arizona medical cannabis consumers purchased 4,474.75 pounds of marijuana in various forms, down from 4,621,28 reported in September. The year to date total through October, was 47,075.6 pounds.

This story was first published by Arizona Mirror.

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