Arizona's adult-use cannabis sales are 57% higher than they were this time last year, boosting the state to become one of the top three legal weed markets in the US.
Between September 1, 2021 and September 1 of this year, legal pot shops sold $638.8 million worth of recreational cannabis products, according to the state Department of Revenue. That sum is up 56.8% from the $407.3 million that adult-use shops made during the previous year. But despite this massive sales spike, Arizona's total weed sales have only climbed by 6.3% year-to-date. Legal pot shops moved $1.05 billion worth of bud from last September to this September, compared with $987 million the prior year.
The primary reason that Arizona's overall weed sales are growing so modestly is that the medical marijuana market is shrinking almost as rapidly as the recreational market is growing. Revenue officials report that dispensaries only sold $410 million worth of medicine between September 2021 and this September, a 27% decline from the $579.5 million sold the previous year. The state's monthly medical pot sales have been consistently declining every single month since March, hitting a low of $32.5 million this September.
The shift from medical to adult-use sales is great news for state tax collectors, though. Medical marijuana sales are only taxed at a modest 5.6% rate, but recreational sales are hit with a 16% excise tax and a 2% local tax. In the 2022 fiscal year, Arizona raked in nearly $256 million in combined medical and adult-use cannabis tax revenue - a massive 244% increase over the $74.4 million collected in FY 2021. And in the current fiscal year, which is only half over, the state has already collected another $111.5 million in weed taxes.
Arizona has collected a total of $441.8 million worth of legal cannabis tax revenue between the start of the 2021 fiscal year and this November. Out of this total, $92.8 million went to the state general fund, and another $15 million went to fund the state's public school system. A third of the remaining taxes go to cops, fire departments, and first responders, a quarter goes to the highway revenue fund, and another 10% goes to community justice reinvestment programs.
It hasn't even been two years since Arizona began selling adult-use weed, but the Land of Enchantment now boasts the second-largest legal weed market in the US. Or maybe the third-largest, depending on how you look at the stats. Colorado, the other contender for the country's second-biggest weed market, made $1.176 billion in retail sales through this September, just edging out Arizona. But when adding excise taxes into the mix, Arizona's year-to-date total spiked to $1.74 billion, beating Colorado's combined total of $1.36 billion.
But neither of these states can hold a candle to California. In the first three quarters of 2022, the Golden State sold just over $4 billion worth of legal weed and collected over $853 million in weed tax revenue. Arizona and Colorado combined can't even match that princely sum.