Arizona’s cannabis industry experienced a nearly 10% drop in total sales in 2024, marking the second consecutive year of decline. Combined medical and recreational cannabis sales totaled $1.3 billion, down from $1.5 billion in 2022. This downturn is attributed to a significant decrease in medical marijuana sales and a softening recreational market.
Medical Marijuana Sales Plummet
Medical marijuana sales fell by almost 40% in 2024, totaling $243 million compared to over $733 million in 2021. This decline reflects a shift in consumer preference toward recreational cannabis, which now accounts for 81% of total sales, up from 48% in 2021.
Recreational Market Softens
Recreational cannabis sales reached nearly $1.1 billion in 2024, a decrease of approximately $43 million from the previous year. While still dominant, this slight decline indicates a maturing market facing challenges such as price compression and increased competition.
Tax Revenue Impact
The state collected nearly $190 million in cannabis-related taxes in 2024, with $170 million from the 16% excise tax on recreational sales and over $20 million from medical marijuana sales. Tax revenues support various public services, including community colleges, public safety, infrastructure, and social services for communities affected by prior marijuana criminalization.
