Arizona's cannabis sales are trending downward significantly, potentially affecting the budgets of agencies that benefit from marijuana tax revenue. The decline appears to be driven primarily by falling prices rather than a substantial decrease in users.
Monthly cannabis sales estimates from the Arizona Department of Revenue show a notable trend.
While sales topped $100 million twice - once in March 2023 and again a year later - recent months have seen a sharp decline. March 2024 estimates dropped to $92 million, and July's preliminary estimate fell to $71 million, though that figure may be revised upward next month.
Year-over-year estimates have been declining each month, turning negative in January 2023 and mostly remaining there since.
This sales decline directly impacts tax revenue distribution. When Arizona voters legalized recreational marijuana, they designated the revenue to support community colleges, local police and fire departments, the Highway User Fund, the Department of Health, and a small enforcement budget for the Attorney General.
All of these beneficiaries received less money in the last fiscal year, with community colleges and public safety funds each seeing a $2 million reduction.
Is decreased cannabis usage to blame? A recent Civic Science poll suggests only partially. The survey indicates that about 30% of adults use marijuana, with approximately half reporting daily use. However, adults saying they rarely or never use cannabis increased by three percentage points over the past year.
The primary factor appears to be significantly lower marijuana prices. In January 2024, a gram of cannabis sold for about $17. Now, that same amount costs around $11 - a 35% decrease.
This suggests the number of users hasn't changed dramatically, though growth may have stalled. The main issue is simply that marijuana is much cheaper now than before.
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