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Arizona Cannabis: Recreational Sales Sky-High While Medical Sales Plummet

Current trends in Arizona’s two cannabis markets are divergent.

For the Grand Canyon State’s newly launched recreational pot industry, business is booming. Arizona’s medical cannabis decade-old market, meanwhile, continues to see lagging sales.

Citing figures from Arizona’s Department of Revenue, the AZ Mirror reports that “sales of medical cannabis dipped to slightly less than $45 million in May, their lowest total since January 2021, when adults were first allowed to purchase marijuana for recreational use,” while “initial estimates from tax collectors peg recreational sales at $76.5 million, the fifth time adult-use sales surpassed the $70 million mark.”

In addition, the state Department of Revenue “revised April’s sales upward to $81.2 million, up from the initial estimate of $75.5 million, making it the best sales month yet for recreational cannabis,” according to the AZ Mirror, topping the previous record of $80.4 million in March.

However, sales of medical cannabis have declined while sales of recreational marijuana have risen.

“Medical cannabis sales dropped precipitously for the seventh month in a row to slightly less than $45 million in May, only the second time in the past year medical sales dropped below the $50 million mark,” the AZ Mirror reported. “Preliminary numbers for June indicate $33.7 million in medical sales with recreational sales already on pace to hit another record, with $66.4 million reported so far.”

Arizona approved medical marijuana in 2010. The first sale was made two years later. The 2020 ballot initiative that legalized recreational marijuana for adult 21-plus was approved by the voters. The first adult-use sale began January 2021.

The first year saw medical marijuana sales surpass recreational cannabis sales. According to the state, its two cannabis sectors combined generated more than $1Billion in revenue by 2021. Medical sales generated $703,803,194, while recreational sales brought in $528,000,000,278.

“Rarely does an industry produce over $1.2 billion in revenue in its first year. This number shows that the legalization of cannabis is something Arizonans believe strongly in and the many benefits it contributes to the state’s economy,” said Samuel Richard, the Executive Director of the Arizona Dispensaries Association (ADA), after those figures were released in January.

Much like in other states that have also legalized adult-use cannabis, Arizona’s new recreational law contains social equity provisions designed to provide individuals from communities disproportionately affected by the War on Drugs with opportunities to the regulated pot industry.

Arizona has plans to issue dispensary licenses for individuals adversely affected by the state’s previous marijuana laws. And last summer, Arizona introduced classes for social equity applicants “to ensure that social equity applicants are prepared for the application process and the challenges of running a marijuana business,” the state’s Department of Health Services said at the time.

The classes entailed “two days of content and education focused on a number of aspects of operating an adult-use marijuana business, including legal requirements, business practices, regulatory compliance, and fundraising, as well as marketing and strategic growth.”

“The social equity ownership program is intended to promote the ownership and operation of licensed Marijuana Establishments by individuals from communities disproportionately impacted by the enforcement of previous marijuana laws,” the department said in the announcement last August. “Social equity license holders will be required to comply with all statutes and rules that govern Adult-Use Marijuana Establishment licenses, including obtaining approval to operate before opening their retail location. Additionally, social equity license holders will be required to develop and implement policies to document how the Marijuana Establishment will provide a benefit to one or more communities disproportionately affected by the enforcement of Arizona’s previous marijuana laws.”