Arizona’s Recreational Marijuana Sales Plunge to Annual Low in November, Deepening Market Decline

The Arizona cannabis market continues to show signs of contraction, with adult-use marijuana sales plummeting to $73.1 million in November—the lowest figure recorded since September. This decline is part of a broader downturn affecting the state’s cannabis economy.

Medical marijuana sales also registered a notable decrease, falling to $16.5 million in November. This marks the lowest sales figures since the inception of legal recreational cannabis sales, reflecting a consistent trend where patients are increasingly favoring the recreational sector over medical options.

According to the Arizona Department of Revenue, the overall sales figures through November highlight a challenging year for the market. Recreational dispensaries have reported $906 million in sales, while medical dispensaries have managed only $224 million. This suggests a significant shortfall compared to the $1.42 billion total sales recorded in 2023 and $1.43 billion in 2022.

Specifically, the medical sector has seen a staggering 37.3% drop in sales compared to the previous year and a striking 57% reduction since 2022. For adult-use sales, November’s figures reveal a 14.5% decline from the previous year when recreational sales peaked at $1.06 billion.

The state’s tax revenue also reflects these declines, with total marijuana tax collections reaching $245.3 million through November. This includes $151.2 million in excise taxes, $75.7 million from recreational sales, and $18.5 million from medical sales.

Under Proposition 207, passed by voters in 2020, Arizona imposes a 16% excise tax on recreational cannabis, along with standard sales tax; medical patients face approximately 6% in state sales tax. Local governments typically add around 2% more for all marijuana transactions.

Revenue from the excise tax supports various public sectors, with one-third allocated to community colleges, 31% to public safety initiatives, 25% to the Arizona Highway User Revenue Fund, and 10% to the justice reinvestment fund aimed at supporting communities affected by marijuana-related incarceration.

The recent report from the revenue department also included upward revisions to previous monthly figures. Adult-use sales for October were adjusted upward by $7.2 million, reaching $82.5 million, while September’s sales were revised up by $7.9 million to $75.2 million. Such revisions are part of regular adjustments as late tax filings are processed.

This trend in Arizona mirrors patterns observed in other states with mature cannabis markets, such as Colorado and Oregon, both of which have faced declining revenues amid increased competition and market saturation. Contributing factors include price compression, dwindling cannabis tourism, and an overall adjustment in consumer behavior as states neighboring Arizona also legalize cannabis sales.