Smoke Signals: Medical marijuana sales continue to decline while recreational sales bounce back

Medical cannabis sales dropped by about $4 million from January to February this year, while adult-use recreational gained a little more than $1 million, as sales statewide continue to lag behind a robust end-of-year surge in recreational sales in 2021.

Overall, sales for both programs totaled $121.2 million for the month of February.

While medical marijuana continues its multi-month decline since last October, recreational sales continue to hover just shy of the record $70 million attained in December 2021.

Recreational sales weighed in at $68.7 million in February, a slight increase from the $67.6 million sold in January. Meanwhile, medical sales continued to fall, with a $52.5 million total in February. That was the lowest monthly total for medical marijuana since recreational sales began in January 2021, when medical dropped to just $42 million in sales.

Medical cannabis sales in 2021 peaked in April, topping out at $73.8 million.

Adult-use recreational sales started 2021 slow, but picked up speed in the spring, as more dispensaries opened. Through the summer, sales hovered around $60 million per month, before climbing in the fall and winter.

Cannabis sales translated to $21.5 million in February taxes, with a little more than $11 million credited to the 16% excise tax on recreational marijuana. Medical marijuana patients pay just the sales tax. Local jurisdictions charge an additional 2% or so for all marijuana sales.

Sales taxes on all cannabis sales in the state totaled $10.3 million in February, with $4.6 million coming from medical and $5.6 million from recreational.

About $4.5 million of those taxes went into the state’s general fund, and $737,000 went to public schools.

Counties received about $995,000 of the excise tax and collected another $892,000 in sales taxes, while Arizona cities got $614,000 of the excise taxes and collected $2.5 million in sales taxes.

According to the State Treasurer’s office, which administers the state’s Smart and Safe Arizona Fund that voters created when they approved adult-use marijuana in 2020, community colleges across the state received $31 million in 2021.

Police, fire and sheriff’s departments received $30.2 million last year; the Arizona Highway User Revenue Fund received $24.4 million; the Justice Reinvestment Fund received $9.6 million and the Attorney General’s Office received $191,959. 

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