Regulated sales of marijuana in Arizona topped $1.4 billion last year, according to state data, marking the third year in a row that licensed weed sales have exceeded $1 billion in the Grand Canyon State. Sales of recreational marijuana totaled more than $1 billion in 2023, while sales of medical cannabis brought in nearly $350 million, the Arizona Mirror reported on Tuesday.

Arizona’s continued strong weed sales were welcome news for the state’s licensed cannabis businesses. Luke Flood, senior vice president and West regional leader for multistate operator Curaleaf, said, “Arizona has been a strong success story for us, and has become one of the top markets in the country for Curaleaf.” 

“Since the launch of adult use, we have seen a lot of consolidation in the market on the retail side, along with a multitude of new third-party brands and products coming into the market, resulting in a wider selection for consumers at an affordable price,” Flood wrote in an emailed statement. “Uniquely, Arizona offers one of the lowest prices per gram at the retail level in the country.”

Adult-Use Sales Dominate the Arizona Market

Adult-use cannabis sales came to $1.1 billion in 2023, according to data from the Arizona Department of Revenue (ADOR), or about 72% of the year’s total sales. The year before, recreational marijuana sales contributed 70% of the yearly total. In 2021, the year adult-use cannabis sales began in Arizona, recreational weed made up only 45% of the state’s total cannabis market.

“Reaching $1.4 billion in sales is a huge milestone for the state and I think it speaks to the wider efforts of de-stigmatization surrounding the plant,” Josh Hirschey, president of Arizona-based concentrate manufacturer Timeless, said in a statement.

“The consumer demand for high-quality cannabis is there and Arizona brands are strategic in navigating natural limitations to normalize the plant,” he added.

Monthly sales of recreational marijuana have totaled between about $80 million and $93.5 million since July 2022, peaking in March 2023 at $100 million. In January, adult-use sales dropped to $76.8 million, the first time in 18 months the figure was below $80 million.

Medical cannabis sales totaled $348 million last year as the market for medicinal weed in Arizona continues to decline. Medical sales hit a monthly sales record of $73.4 million in April 2021 and have steadily decreased nearly every month since then.

The decline in medicinal cannabis sales has coincided with a drop in the number of registered patients in Arizona’s medical marijuana program. Last month, the total number of medical marijuana cardholders was 111,168, down from the peak of 299,054.

Weed Taxes Fund Social Services

Arizona levies a 16% excise tax on adult-use cannabis sales in addition to the usual sales tax. Medical patients pay the sales tax of about 6%, depending on the area. Additionally, local jurisdictions add a tax of about 2% to all weed sales. 

Last year, cannabis excise taxes totaled $172.8 million. Since recreational marijuana sales began in January 2021, the marijuana excise tax has generated $451 million in revenue for the state.

Approximately one-third of Arizona’s marijuana tax revenue is earmarked for community college and provisional community college districts and 31% is dedicated to fire departments, fire districts, law enforcement and other first responders. One-fourth of state cannabis taxes are reserved for the Arizona Highway User Revenue Fund, while 10% is dedicated to the justice reinvestment fund supporting public health services, counseling, job training and other social services for communities that have been disproportionately affected by the War on Drugs.

Although Arizona’s cannabis market has begun to stabilize, many of the state’s weed retailers are still optimistic about this year. Eivan Shahara, CEO of Mint Cannabis, said the business is “anticipating an even busier 2024, as we prepare to employ more people to serve more customers at our additional dispensary locations.”

“The marijuana industry is blossoming into a significant job creator,” Shahara wrote in an email to High Times. “It’s estimated that the cannabis industry employs about 500,000 full-time equivalent positions in the U.S., with about 280 new jobs being added daily. This showcases a promising trend, as more than 100,000 new jobs were established in the previous year, making the cannabis industry one of America’s fastest-growing job sectors.”

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