According to the most recent report from the Arizona Department of Revenue, the state’s cannabis market lost close to $7 million in August as both medical marijuana and adult-use recreational sales declined by roughly $3.5 million each from the previous month.
However, the losses were partially offset since ADOR increased the totals for July by about $7 million.
Despite the general decline, cannabis sales reached $980 million in the first eight months of 2022 and are expected to reach or maybe surpass the $1.4 billion milestone before the year is over.
The market for medical marijuana continued to shrink steadily in August, with sales falling to $34.1 million from the previously reported $37.3 million in July. Despite not yet reaching the $71.3 million reported in July 2021 or the $73.3 million in March 2021, the biggest month since recreational sales started in January of that year, the present decrease in medical sales started in March.
Despite a small uptick in July, adult-use, recreational sales have decreased since reaching a record high of $81.2 million in April. According to updated sales projections for July, Arizonans spent $78.1 million. Sales decreased marginally to roughly $74.5 million in August.
The last time medicinal cannabis sales exceeded recreational marijuana sales was in September 2021. In that month, ADOR recorded medical sales of $63.4 million compared to recreational sales of $58.5 million; nevertheless, subsequent month-by-month reporting has shown the two programs moving in opposing ways.
The last month-over-month increase in medical sales was $65.1 million in October 2021, and recreational sales were $65.6 million. Since then, the programs have taken very divergent paths, with the recreational program currently outpacing medical sales by more than $40 million.
About $20.5 million in taxes from both medical and recreational sales were collected in August, with $11.9 million coming from the 16 percent cannabis excise tax that was applied to those transactions.
A total of $21.8 was added to the previous figures for July, including $12.5 million from the excise tax. The Proposition 207, which received voter approval, divides and distributes taxes.
Community colleges and provisional community college districts receive one-third of tax revenue; public safety—police, fire departments, fire districts, and first responders—receive 31 percent; the Arizona Highway User Revenue Fund receives 25 percent; and the Justice Reinvestment Fund receives 10 percent. The Justice Reinvestment Fund provides public health services, counseling, job training, and other social services for communities that have been negatively and disproportionately impacted.
The Arizona Department of Health Services publishes monthly reports on the medical marijuana program that include sales by the pound as well as the number of eligible patients in the state, in contrast to the ADOR, which offers monthly reports on cannabis sales and tax revenues.
The medical reports provide a preview of what is probably in store for medicinal marijuana sales because the ADHS reports are one month ahead of the ADOR financial reports.
The Arizona medical marijuana program’s participation and sales are continuing to drop, according to the September ADHS report. In the state, there were 136,010 cardholders in September as opposed to 144,678 in August. There were 191,682 active cardholders as of June.
Medical cannabis sales through September fell by almost half to 5,061 pounds from January’s 9,273 pounds via nearly 600,000 transactions.
With the approval of Prop 207, the Smart and Safe Arizona Act, Arizona voters authorized the use of cannabis for recreational purposes in 2020. After the Arizona Medical Marijuana Act was passed in 2010, the medical cannabis market officially launched in 2012.
