Cannabis is officially a billion dollar business in the state of Arizona.
Voters in the Grand Canyon State passed a measure at the ballot in 2020 that made recreational pot legal for adults ages 21 and older. Medical cannabis, meanwhile, has been legal in the state since 2010.
That made 2021 the first year with both markets open for business, and the results were lucrative for Arizona.
According to figures released by the state Department of Revenue, medical and recreational cannabis sales combined to generate more than $1.23 billion in revenue last year.
“Rarely does an industry produce over $1.2 billion in revenue in its first year. This number shows that the legalization of cannabis is something Arizonans believe strongly in and the many benefits it contributes to the state’s economy,” said Samuel Richard, the Executive Director of the Arizona Dispensaries Association (ADA), as quoted by azfamily.com.
The Department of Revenue provided a detailed breakdown of the sales data, revealing that recreational adult-use pot brought in $528,001,278 in revenue, while medical cannabis generated $703,803,194.
According to the figures, November brought in $60,299,191 in adult-use sales, making it the highest-grossing month for recreational pot. It was also the only month of the year in which recreational sales topped $60 million.
April was the top month for medical cannabis, with $72,944,477 generated then. Complete sales figures for December were not provided.
Moreover, the state raked in $196,447,570 in taxes on the combined sales last year, and that does not include sales in December.
According to the Arizona Department of Revenue, “there is a transaction privilege tax (TPT) rate and an excise tax (16 percent) on the retail sales” of adult use recreational cannabis in the state.
In 2020, 60 percent of Arizona voters approved Proposition 207, a ballot initiative that legalized recreational pot use in the state. (Arizona was one of four states that year where voters approved legalization measures at the ballot, joining Montana, South Dakota and New Jersey in moving to end prohibition.)
In August, Arizona launched a social equity program for aspiring cannabis dispensary owners as part of Prop 207’s commitment to “promote the ownership and operation of marijuana establishments and marijuana testing facilities by individuals from communities disproportionately impacted by the enforcement of previous marijuana laws.”
Through the program, the state’s Department of Health Services will award 26 dispensary licenses to applicants who come from communities most adversely affected by anti-drug policies.
“The social equity ownership program is intended to promote the ownership and operation of licensed Marijuana Establishments by individuals from communities disproportionately impacted by the enforcement of previous marijuana laws,” the Department of Health Services explained. “Social equity license holders will be required to comply with all statutes and rules that govern Adult-Use Marijuana Establishment licenses, including obtaining approval to operate before opening their retail location. Additionally, social equity license holders will be required to develop and implement policies to document how the Marijuana Establishment will provide a benefit to one or more communities disproportionately affected by the enforcement of Arizona’s previous marijuana laws.”
But that effort has also faced scrutiny, with a group of female investors filing a lawsuit in November targeting the program. The plaintiffs, a pair of organizations known as the Greater Phoenix Urban League and Acre 41, assert that the rules governing the program are inconsistent with the goals of Prop 207.
Defendants in the suit are the state of Arizona, Republican Gov. Doug Ducey, the state Department of Health Services and Don Herrington, the director of the Department of Health Services.
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