Year one of legal adult-use cannabis in Arizona was a big hit, according to the Arizona Department of Revenue. 

State data confirms that money spent by adults aged 21 and older on dispensary-sold weed – both medical and recreational – surpassed $1.4 billion during launch year.

The Department noted that, although sales didn’t commence until January 22, 2022, the recreational market generated almost $650 million.

Conversely, Arizona’s medical cannabis market – which has been active since Proposition 203 passed in 2010 – pulled in $758 million worth of sales last year.

Arizona’s cannabis market generated $11.4 million during launch year

If we rewind to one year ago and acknowledge the early sales revenue for Arizona’s cannabis market, it’s clear that the market was always destined for big things.

Why, you ask? During the first 10 days of recreational sales, revenue amounted to a staggering $11.4 million.

Cannabis industry-focused data and analytics specialist Headset released the following key takeaways from a 2021 report into Arizona’s cannabis market:

• In comparison with January, market sales for February inflated 39 percent across the entire spectrum.
• The month of March saw market sales soar 29.6 percent.
• Cannabis flower sales accounted for approximately 47 percent of revenue in 2021, whereas vaporizer pens constituted 23.7 percent of the market.

Arizona’s cannabis market contributed over $100 million in excise tax

When Proposition 207 received voter approval in 2020, the legal framework outlined specific types of public use for taxes generated through the recreational sales avenue.

The results have been consistently impeccable, with recreational cannabis sales in Arizona collecting more than $104.1 million in excise tax by the time 2021 came to an end. Meanwhile, sales taxes bulked up the tax revenue fund with an additional $113.5 million.

Taking into account the $63.5 million in taxes earned through medical cannabis sales in Arizona, the state funneled almost $218 million to state coffers last year.

On top of the standard sales tax, a 16 percent excise tax is earned through recreational sales. Medical cannabis patients are only obliged to pay the sales tax. Meanwhile, an extra two percent is charged by local jurisdictions for all cannabis-related sales.

The state secured $196,447,570 in cannabis sales tax revenue during the first 11 months of last year. Of that amount, $92,997,962 stemmed from the excise tax, $58,916,172 came from medical cannabis sales and $44,533,436 from adult-use cannabis sales.

One-third of Arizona’s cannabis tax revenue is earmarked for community college and provisional community college districts; 31 percent is allocated to public safety services; 25 percent is sent to the Arizona Highway User Revenue Fund; 10 percent is issued to the justice reinvestment fund.