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Arizona Cannabis Sales Hit More Than $1.23B for First 11 Months of 2021

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As we push forward into the next year, we look back at 2021 and observe the specific growth of the cannabis industry, both on a broad scale and also at the individual state level. Arizona’s adult-use sales began in January 2021, and now the state’s Department of Revenue reports more than $1.23 billion in combined cannabis sales through the first 11 months of the year.

For the first 11 months of 2021, the state collected total tax revenue, with $196,447,570 in $44,533,436 from recreational, $58,916,172 from medical and $92,997,962 from the excise tax.

 Adult-use cannabis sales hit a new high in the state in November, crossing $60 million for the first time. Medical sales varied through the year and topped out at about $73 million in March and April, eclipsing recreational sales from February through October. In November, the numbers were nearly identical, as the medical program brought in an estimated $60,365,545 in sales, with recreational bringing in $60,299,191. Sales between recreational and medical cannabis were within $7 million of each other by October, which was the first time recreational sales came within $10 million of medical sales.

Though, Arizona’s recreational cannabis market is still new, and it is expected to match the state’s medical program sales within the next few years.

In addition, the state reported the tax revenue collected from cannabis, which was similarly dense. Arizona collects 16 excise tax on recreational cannabis on top of the standard sales tax, and medical patients pay a 6 percent excise tax; local jurisdictions also charge approximately 2 percent for all cannabis sales.

In November alone, Arizona collected $5,055,950 in taxes, medical sitting slightly lower at $5,026,317. The excise tax reached $10,110,032, totaling $20,192,299 in tax revenue from November cannabis sales.

Part of the state’s adult-use cannabis program, as outlined in Proposition 207 approved in 2020 to legalize adult cannabis, was allocating taxes from recreational sales for specific uses. One-third is dedicated to community colleges and provisional community college districts; 31 percent goes to public safety, like police, fire departments, fire districts and first responders; 25 percent goes to the Arizona Highway User Revenue Fund and 10 percent to the justice reinvestment fund, dedicated to providing public health services, counseling, job training and other social services for communities adversely and disproportionately affected by cannabis criminalization.

Proposition 207 also included social equity cannabis dispensary licenses as part of the provision, promoting equal opportunity in the industry and helping folks from specific communities to enter the business on a level playing field. Though the state opened up 26 slots for business owners to apply for equity licenses, more than 1,500 business owners applied, with the Department of Health Services planning to review applications and announce in spring 2022 who is awarded the equity licenses.

It’s a testament to the excitement of not only consumers racing to buy legal cannabis, but business owners looking to get in on the budding new industry. And trends show this is clearly not unique to Arizona, rather that the global cannabis market has no plans of slowing down.

According to The Global Cannabis Report: Second Edition, published by Prohibition Partners, the combined global sales for CBD, medical and adult-use cannabis topped $37.4 billion in 2021 and could rise up to $102 billion by 2026. The report notes that the markets in the United States and Canada are the most important regions in the world for cannabis, though international markets in countries like Germany, Israel and Australia are predicted to develop significantly over the next five years.