Combined adult-use and medical cannabis sales in Arizona reached a staggering $1.43 billion in 2023, according to a report by AZ Mirror. This marks the third consecutive year that legal cannabis sales in the state have surpassed the $1.4 billion mark.
Of the total sales, adult-use cannabis accounted for a substantial $1.1 billion, while medical cannabis sales amounted to $348 million. Notably, adult-use sales represented 76% of the state’s cannabis market in 2023, a significant increase from 70% the previous year and 45% in 2021, the first year of adult-use sales in Arizona.
The report also highlights a concerning trend in medical cannabis sales, which have dwindled to record lows, constituting less than a third of the state’s overall cannabis sales. This decline is indicative of the shifting consumer preferences towards the adult-use market.
In terms of taxation, the state collected $172.8 million in excise taxes from adult-use cannabis sales in 2023. These taxes are divided among various sectors, with 31% allocated to public safety, 25% to the Highway User Revenue Fund, and 10% to the Justice Reinvestment Fund.
However, alongside the booming cannabis market, the Arizona Department of Health Services reported a notable decrease in registered medical cannabis patients since the implementation of adult-use legalization. In February alone, the number of qualifying medical cannabis patients dropped to 111,168, down from 113,694 in January and 115,914 in December. This decline represents a nearly 63% decrease from the peak enrollment of 299,054 registered patients.
Medical cannabis patients in Arizona are subject to a 6% tax on sales, while adult-use cannabis products are subjected to a 16% excise tax in addition to the state’s 5.6% sales tax.
The surge in cannabis sales underscores the significant economic impact of the cannabis industry in Arizona and highlights the dominance of the adult-use market in shaping consumer behavior.
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