Medical marijuana sales crater as recreational cannabis sales stay sky high

Medical marijuana sales in Arizona continue to crater as recreational sales remain robust, according to tax and sales data compiled by the Arizona Department of Revenue.

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.

Meanwhile, initial estimates from tax collectors peg recreational sales at $76.5 million, the fifth time adult-use sales surpassed the $70 million mark.

And ADOR 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.

The previous record was $80.4 million in March.

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.

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.

Total sales for both programs in May were $121.5, with a revised total for April at $131.5 million. Total for the year, including the preliminary June numbers is already more than $1 billion, with six more months of reporting to come. Last year, the first year of recreational sales, Arizona consumers purchased more than $1.4 billion in legal cannabis products.

The Arizona Department of Health Services reports steady declines in the medical marijuana program through July, with total sales in poundage dropping from 9,273 lbs sold via nearly 600,000 transactions in January to about 5,600 lbs through roughly 350,000 transactions in July. The number of active cardholders in the state dropped once again from 191,682 in June to 158,154 in July.

ADOR has not released fiscal numbers beyond the preliminary June totals.

Total tax revenues for medical and recreational sales in May were reported at $24.3 million, with $13.4 million from the 16% marijuana excise tax imposed on recreational sales.

Year-to-date, the recreational excise tax has brought $177.3 million into the state’s tax coffers, which is divided by statute laid out in Proposition 207, which legalized adult-use, recreational cannabis in 2020.

One-third of 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.