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Tuesday, May 30, 2023

Marijuana Sales Decline in the First Month of 2022

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The flow of money raining down from cannabis sales fell slightly in the first month of 2022, with recreational and medical sales dropping to $115 million.

It was the industry’s lowest total sales revenue since February 2021 — the first full month of sales since Arizona voters legalized marijuana for recreational use in November 2020 — when Arizonaans purchased $94 million of cannabis. At the time, a few dispensaries in the state had started recreational sales.

Arizonans bought $63.8 million of recreational marijuana products in January, and another $51.3 million of medical cannabis. Sales for the month were about $5 million less than in December.

Sam Richard, director of the Arizona Dispensary Association, said the December business registration may have more to do with the decline than slowing sales.

“It wasn’t a big dip as it was in December,” he said. “It was a ‘sharp rise.’” “It was something fresh and new over the holidays.”

On the adult use side, sales reached $63 million in October 2021 and increased to $69.4 million by December.

Tax dollars continue to come in, despite the decline in sales from month to month, with approximately $21.5 million in revenue collected from production tax on recreational cannabis and sales taxes in both programs. Sales tax revenue for the month was just over $10 million, while production tax revenue on the entertainment program totaled more than $11 million.

Of this total, about $4.5 million went to the State General Fund; $725,134 for tuition; $979,172 for county revenue sharing; and $604,278 for cities.

State city tax collections included nearly $2.5 million statewide, while counties collected a total of $85,202.

The state collects a 16% selective tax on recreational sales in addition to the standard sales tax. Medical marijuana patients only pay sales tax. Local jurisdictions charge an additional 2% or so fee on all marijuana sales.

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