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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.
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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.
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This post was originally authored and published by Jim Small from AZ Mirror via RSS Feed. Join today to get your news feed on Nationwide Report®.
