You are here
Home > News > Medical Weed Sales Continue To Decline in Arizona

Medical Weed Sales Continue To Decline in Arizona

Arizona’s gap between recreational cannabis and medical cannabis is Grand Canyon-sized. While sales of medicinal marijuana are declining, adult-use cannabis is on the rise. 

Arizona Department of Revenue has released October’s latest figures. This is the eighth straight month of decrease in taxable cannabis sales.

Adult-use cannabis sales, on the other hand, amounted to $73.8 million in October, a new high for the state’s recreational pot program. 

Those totals mark the continuation of a trend for the Grand Canyon State’s dual cannabis markets. 

Arizona voters legalized medical marijuana in 2010. Sales began in January 2021. Arizona voters also approved recreational cannabis legalization in 2020. Sales will begin in January 2021. 

In the 11 first months of 2021 medical cannabis sales surpassed recreational sales.

That December, adult-use sales were $70,317.105, while sales of medical marijuana totaled $57,971,859 that month. 

Since then, recreational pot sales have outsold medical sales in every month. 

As the AZ Mirror noted this week, the “crumbling of the medical program follows a pattern other states have seen with medical markets outpaced by recreational sales in the wake of legalization.”

More information is available at the outlet about divergent selling trends 

“The state collects 16% excise tax on recreational sales in addition to the standard sales tax; medical patients pay roughly 6% in state sales tax, levied as a Transaction Privilege Tax on cannabis outlets. All marijuana sales are subject to an additional charge by the local authorities at 2%. One-third of recreational taxes collected are dedicated to community college and provisional community college districts; 31% to public safety — police, fire departments, fire districts, first responders — 25% to the Arizona Highway User Revenue Fund, and 10% to the justice reinvestment fund, 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 medical market has continued to bleed both sales and participants, following a trend in some states that have legalized adult-use cannabis years after establishing medical cannabis markets.”

Arizona was among four states that approved 2020 measures to legalize recreational marijuana. New Jersey, South Dakota and Montana were the others.

The measure, Proposition 207, required the state to “promote the ownership and operation of marijuana establishments and marijuana testing facilities by individuals from communities disproportionately impacted by the enforcement of previous marijuana laws,” a mandate that, among other things, designated the first two dozen dispensary licenses to individuals hailing from communities that have been affected by the War on Drugs.

Arizona’s Department of Health Services required those applicants to participate in classes in order “to ensure that social equity applicants are prepared for the application process and the challenges of running a marijuana business.”

Those classes, per the department, were led by veterans of the cannabis industry, and included “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.”

Arizona’s potential cannabis dispensary owner are now aware of the class. This is the social equity class. 

The provision is part of the legalization measure for recreational pot that was passed by the voters last year. The measure, Proposition 207, called on the state to “promote the ownership and operation of marijuana establishments and marijuana testing facilities by individuals from communities disproportionately impacted by the enforcement of previous marijuana laws.”

What that means in practice: Arizona’s Department of Health Services will award 26 dispensary licenses to individuals from those communities particularly affected by long standing anti-pot laws. 

Per the department: “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.”