Arizona Sells over $1,400,000,000 Worth of Cannabis in the First 12 Months of Legalization
Arizona is following the precedent of other legal states by shattering records only a year into establishing a legal cannabis industry. The Grand Canyon state has set a new record by making total sales worth about $1.4 billion during the first year of sales. Residents did not waste much time before settling comfortably into the budding recreational industry.
Arizona is one of eighteen states in the United States of America with a legal adult-use cannabis industry. The legislation was approved by voters in November 2020, during the last general elections. About 59% of Arizonian voters supported the Prop 207 measure by voting yes on the ballots. The measure is known as the Smart and Safe Arizona Act.
Recreational Cannabis Sales in Arizona
For a cannabis market only a few days into its second year, Arizona’s cannabis sector has fared very well. Recently published data from the state’s Revenue department revealed that the state generated over $630 million from the adult-use market in its first year. The sales in question started on January 22.
According to the Arizona Mirror, the generated revenue is almost equal to the total sum generated by the state’s medical cannabis industry. The medical sector made about $700 million within the same duration, despite being active since 2011.
It is a big deal for a new cannabis industry to realize over $1 billion in its first year of legal sales. The bulk of the realized revenue was invested in education and health services throughout the year. The more cannabis lovers purchased cannabis from legal stores; the more greens entered the health and education sectors. About $190 million has been gotten as taxes from these sales.
Comparing Arizona’s Medical and Recreational Cannabis Industries
The state’s new recreational industry is racing to catch up with the medical cannabis industry.
December’s records show that recreational use sales were higher than medical cannabis. This was the second time this occurred, the first being in November. In December, the recreational industry sold cannabis worth $67.2 million, while the medical industry brought in about $53 million. Throughout the previous months, medical cannabis sales surpassed adult-use sales. The numbers only became identical in November.
The biggest medical sale in a month was about $73 million. It was recorded in March and April. Whereas recreational cannabis sales averaged $50 million, they only crossed the $60 million mark for the first time in November. The medical users purchased about $60.3 million worth of cannabis-derived medical products, while their recreational counterparts spent $60.2 million.
The first time recreational sales got within a $10 million radius of medical sales was in October. Estimates show that both sectors had a $7 million difference, with medical cannabis being on top. The data gathered over the last 11 months could prove that the adult-use market will surpass the medical program in terms of sales and demand in a few years.
Contribution of Cannabis Sales To The State’s Economy
The Smart and Safe Arizona Cannabis Act, also called Proposition 207, makes provisions for how generated taxes are spent. The recreational cannabis market has made solid tax contributions each month since February 2021.
207 states that the state is entitled to a 16% excise tax on all sales made in the recreational market. There is also a standard sales tax. In contrast, medical patients remit a 6% excise tax. Some local jurisdictions also demand an extra 2% or more on all cannabis sales.
The taxes collected are rightly donated to disadvantaged communities, educational facilities, and law enforcement agencies. 33% of the generated funds are allocated to provisional community college areas and their resident colleges. 31% is dedicated to state safety agencies, including the police, fire departments, and the first responder unit. The Arizona Highway User Revenue Fund receives up to 25%. The rest is donated to the justice reinvestment fund to provide health care, employment workshops, and other basic social amenities in communities that have most felt the impact of cannabis criminalization.
From January to December 2021, the tax revenue generated from both the cannabis sectors in Arizona was over $190,450,000. About $58,000,172 from medical, $44,530,400 from adult-use, and $92,990,000 from excise taxes.
Executive Director of the Arizona Dispensaries Association, Samuel Richard, could not hide his excitement about the sector’s recent record. In a press release, he said that the new record is a momentous achievement for Arizona. Not all legal recreational states could produce over $1.2 billion in sales revenue within their first eleven months of operations. This rare feat in Arizona shows that adult-use organization was the right move. Arizonans have proven that they strongly support the industry and have faith in the economic benefits that will follow.
In truth, very few people believed the stage could realize this amount in the first year. Everyone’s expectations for 2021’s recreational sales were exceeded. Even states like Washington, Nevada, Oregon, and Colorado, with higher populations and cannabis lovers, couldn’t make up to $1.2 million in their first year of operations.
Important Information About Props 207
The Smart and Safe Act only serves the state of Arizona. According to federal laws, cannabis remains an illegal substance. Note that cannabis is only legal for residents over the age of 21. The law permits the possession of up to 1 ounce of cannabis flowers and 5 grams of marijuana concentrates. Violations of provisions included in the recreational cannabis legislation are punishable by fines and, in the worst cases, convictions.
The bill further improves citizens’ rights by prohibiting warrantless searches by law enforcement. The new law explicitly stated that the smell of raw or processed weed is not enough reason to suspect a resident of a crime.
Arizona’s recreational market is on track to surpass $2 billion in sales by the end of this year. This means that dozens of communities and colleges throughout the state will benefit and be improved for residents and students, respectively. Cannabis is one of the biggest businesses in the state. With more progressive regulations, the state’s cannabis sector would continue to grow bigger and better.