PIMA COUNTY, Ariz. (KGUN) — Recreational marijuana sales in Arizona reached a record-breaking $1.1 billion in 2023, according to state reports. Pima County, home to over 20 marijuana dispensaries, collected over $4.5 million in tax revenue from these sales.
"The (state of Arizona's) recreational marijuana program is strong," said Mike Shew, Operations Director for Earth's Healing, one of the dispensaries in Pima County.
That was true for Earth's Healing as well.
"One thing we did see was an increase in patients from the previous years of 2020, 2021, and 2022," Shew said.
The excise tax on recreational sales is 16% in Arizona, and when combined with a 5% state sales tax, Pima County received over $3.5 million in excise tax alone in 2023.
The total tax revenue collected by the county from marijuana sales was $4.5 million when factoring in medical sales.
Here's how the tax revenue was allocated: $1 million to the county general fund, $1.3 million for highway maintenance, $1.4 million to the county sheriff's department, and nearly $800,000 to the county health department.
Part of the expansion of the recreational program has come at the expense of the state's nearly-decade old medical program.
"A lot of people that didn't want to get their medical card for one reason or another when it was only medical are now able to purchase," Shew added.
According to a recent article in the Arizona Mirror, recreational marijuana sales made up more than 76% of the total cannabis sales in 2023, up from 70% in 2022.
In contrast, medical sales contributed only $348 million, less than one-third of the total sales.
Since January 2021, recreational sales have totaled $2.8 billion, generating over $451 million in excise taxes. One-third of the excise tax revenue is dedicated to community college and provisional community college districts, 31% to public safety, 25% to the Arizona Highway User Revenue Fund, and 10% to the justice reinvestment fund.
The Arizona Department of Health Services reported a steady decline in medical cannabis program participation, with only 111,168 qualifying patient cardholders as of February, down from 299,054 at the peak of the medical market.
The increase in recreational marijuana sales and the decline in medical sales reflect a shift in consumer habits, with more people opting for recreational use. As the market continues to evolve, Pima County and other local jurisdictions are expected to benefit from the growing tax revenue generated by the cannabis industry.
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Eddie Celaya is a multimedia journalist at KGUN 9. Born in Tucson and raised in the Phoenix area, Eddie is a life-long Arizonan and graduate of the University of Arizona who loves the desert and mountains and hates the cold. Previously, Eddie worked in print media at the Arizona Daily Star. Share your story ideas with Eddie at edward.celaya@kgun9.com, or by connecting on Facebook or Instagram.
