Recreational cannabis filling state coffers as weed sales get higher

With recreational cannabis sales in California on the rise, so too are state coffers.

Recreational cannabis is filling state coffers as weed sales get higher. In Arizona, dispensaries are now selling recreational weed. Read more in detail here: dispensaries in az selling recreational weed.

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Despite a shaky start to adult-use recreational sales in January, the Arizona marijuana business is steadily improving and infusing state tax coffers with cannabis revenue that will only increase as the recreational sector develops.

Although early figures are expected to increase as dispensary operators learn the ropes of the new system, tax dollars received by the Arizona Department of Revenue seem to be rapidly accumulating as sales continue to rise.

According to a preliminary report uploaded to a new webpage on the department’s website, ADOR collected more over $95 million in tax revenue from total marijuana sales through July.

The sum comes from a 22% sales tax on recreational purchases vs a 6% sales tax on therapeutic goods. (In addition to municipal taxes, recreational consumers pay an extra 16 percent sales tax on top of the 6% that medical customers pay.) The recreational sales tax brought in almost $25 million at that period, while the state’s medical program brought in nearly $30.5 million.

Adult-use sales during the first six months of the year, which started on Jan. 28, totalled almost $248 million, while medical sales totaled approximately $363 million from January to June.

According to Prime Leaf CEO Brian Warde, those figures should only rise in the final two quarters of the year as dispensary owners figure out how to negotiate the new tax structure.

“Arizona had the quickest rec market rollout of any state that has [legalized adult-use],” he added. “I believe those figures will increase significantly in the third and fourth quarters simply because you had a January turn date and most clinics did not [start recreational sales immediately].” On the other hand, it took time for individuals to grasp how the state wants those tax funds reported.”

Warde, who has been in the business since 2014 and recently opened his second Prime Leaf location on Park Avenue, has seen 10% to 15% growth on the recreational side, but believes that will level off and patients will remain in or return to the medical side due to possession limits, as senior citizens and veterans are more likely to stay in the medical program. Warde also thinks that the target population, 25- to 30-year-old men, will increase their participation in the MMJ program, allowing them access to greater THC concentrates.

“A core group of medical patients will remain,” he predicted. “Concentrates are preferred by a third of our patients, and they are considerably more cost-effective. I don’t believe that’ll ever go away: it may even expand a little bit on the medical side and hold, but you’ll certainly see a transition.”

According to the ADHS, there were 313,906 eligible medical marijuana patients as of the end of July, with 1,857 new applications and 740 renewals. More than 19,000 individuals have registered for the first time this year, and almost 1,000 have renewed their certificates before the initial wave of two-year credentials expires in 2021. 

Medical patients bought almost 12,000 pounds of cannabis in July alone, including 10,418 pounds of leaf, 193 pounds of edibles, and 1,373 pounds of other kinds of cannabis.

From January through July, medical cannabis sales totalled 96,923 pounds of different kinds of marijuana.

In terms of the market’s future in Arizona, Warde is planning for further expansion as his company prepares to conduct more recreational marketing and simplify the process in order to continue to offer a constant supply of marijuana to both medical patients and adults who visit his clinics.

“I believe Arizona will be one of the first states to reach $1 billion [in yearly] sales,” he said. “If anybody wants to put it in historical context, it took Colorado two or three years to get there. This is a fast-growing industry that will continue to rise for a long time.”

As the year draws to a close, Prime Leaf will continue its efforts in the community, sponsoring events and collaborating with the Tucson Symphony, all while preparing to compete in an industry where no one can rest on their laurels.

He added, “It’s been one of the most tumultuous years in history, at least in my history.” “But we’d been through it, and making the transition [to adult-use] was very remarkable. My team made an impression on me.”

Warde supports numerous charities in addition to the Tucson Symphony Orchestra, including the Therapeutic Ranch for Animals and Kids, the Crohn’s and Colitis Foundation, and a number of other music and festival organizations. Warde is also the president of the Tucson Heirloom Farmers Markets board of directors. 

Recreational cannabis is filling state coffers as weed sales get higher. The botanica tucson recreational is a dispensary in Tucson, Arizona that has been open since the legalization of recreational cannabis in Arizona.

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