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Posted on January 18, 2017 in Drugs

Arizona Medical Marijuana Sales to Reach $367 Million in 2016

It has been 7 years since the legalization of medical marijuana in Arizona with Proposition 203. In this time, sales have soared around the state. As the final sales numbers for medical marijuana in 2016 roll in, marijuana industry research groups predict Arizona medical marijuana sales to reach $367 million – a big jump from $215 million in 2015 and $110 million in 2014. Analysts expect Arizona medical marijuana sales to hit as high as $681 million in 2020, with a compound annual growth rate of about 17%. Had Proposition 205 passed last year’s ballot, experts say sales would have reached $1.2 billion in 2020.

About Proposition 205

Most recently in Arizona’s marijuana legal history was Proposition 205 (on the November 8, 2016, ballot). Prop 205, had it passed, would have legalized recreational use of marijuana in the state of Arizona. The Proposition failed with 51.32% voting no and 48.68% voting yes. Under the provisions of the proposed Prop 205, people 21 years old and older would have lawfully been able to possess and use one ounce or less of marijuana and grow up to six plants in their homes.

The measure would have created a Department of Marijuana Licenses and Control, which would have been in charge of regulating marijuana cultivation, manufacturing, and sales. Prop 205 would have allowed citizens over the age of 21 to possess, grow, and purchase marijuana from state-licensed facilities for personal use – without the need for a medical card. Using marijuana in a public place, using as a minor or unauthorized user, and possession over legal limits would have resulted in fines not to exceed $300 and/or community service.

Revenue from Prop 205 would have included a 15% tax levied on all marijuana sales in the state. The CEO of ArcView Group, the research group that forecast more than $1 billion in marijuana sales by 2020 with the passing of Prop 205, stated that businesses would be happy with a market with a 17% growth rate were it not for the fact that just a few thousand votes would have more than doubled this rate. Another research company CEO states that Arizona operators would have enjoyed a “significant opportunity for growth.” Instead, she states, they must prepare for a period of price declines and intense market competition.

What Marijuana Sales Mean for Arizona

Despite the failure of Prop 205 last year, Arizona still enjoyed remarkable marijuana sales growths in 2016. The monthly Arizona Medical Marijuana Program reports showed thousands of new applications to become cardholders every month, as well as thousands of renewal applications. Marijuana sales totaled 75,589.56 ounces in the month of May 2016, the most recent month for which the report is available. A drop in the price of medical marijuana likely contributed to the consistent sales surges. What do marijuana sales numbers mean for The Grand Canyon State? Millions of dollars enriching the state’s treasuries.

Patients spent about $215,101,250 on medical marijuana in Arizona in 2015. Factoring in state and city sales tax (about 9%), this means that legal marijuana in Arizona gave around $19.4 million to the state government. If you apply the same numbers to 2016’s predicted sales of $367 million, the AZ government will make approximately $33 million. Well-regulated medical marijuana programs in Arizona have generated millions for state and local governments.

The legalization of medical marijuana has created thousands of jobs in Arizona, given the state a new source of income, and decreased government spending on cannabis prohibition. Arizona can use the money it makes from marijuana taxation to fortify the education system. There seems to be no end in sight for the growth of medical cannabis sales in Arizona, with predictive analytics holding strong for the foreseeable future.