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- Arizona cannabis sales dropped nearly 10% in 2024, totaling $1.3 billion.
- Medical marijuana sales declined 40% from 2021 to 2024.
- Recreational cannabis taxes contributed over $170 million to state revenue in 2024.
- Shift toward premium and DIY rolling reflects changing consumer habits.
- Experts say the trend signals a national market recalibration, not collapse.
The cannabis business in Arizona is changing a lot. Legalization used to cause fast growth, but now things like how customers are acting, how the market is changing, and rules from the government have made sales go down. The medical marijuana market is getting smaller fast, and even though recreational cannabis is still bigger, it's not growing as fast anymore. But this drop in sales also means there are chances for customers who are smart and businesses that can change. This article looks at why cannabis sales are down in Arizona, what customers are doing, and what businesses can do to do well as things change.
Sales by the Numbers: What’s Happening in Arizona?
Let's look at the numbers. The cannabis market in Arizona made $1.3 billion in total money in 2024. This is less than it made just two years before, which was $1.5 billion. That drop of almost 10% is making retailers, growers, and people who make the rules worried (Associated Press, 2024). Even though recreational cannabis sales are still most of the sales, they are also starting to slow down and not grow as fast.
Here’s a quick look at the sales:
| Year | Medical Sales | Recreational Sales | Total Sales |
|---|---|---|---|
| 2021 | $733 million | $953 million | $1.68 billion |
| 2022 | $518 million | $982 million | $1.5 billion |
| 2023 | $284 million | $1.14 billion | $1.42 billion |
| 2024 | $243 million | $1.06 billion | $1.3 billion |
What's really surprising is how much medical marijuana sales have dropped. They're down almost 67% since 2021. Recreational sales help a bit, but they aren't growing as fast as they used to. The cannabis business in Arizona seems to be becoming more stable, like what's happening in the whole country.
Medical Marijuana: A Market in Crisis?
Medical marijuana used to be a big part of cannabis sales in Arizona, but now fewer people are using it and it's making less money. Just three years ago, people using medical cannabis bought almost half—48%—of all the cannabis sold in the state. Now, they only buy 19% (Associated Press, 2024). This drop is worrying, but it makes sense because of a few things.
Why the Decline?
Recreational Availability
In 2020, Proposition 207 passed and made cannabis legal for adults. Now anyone over 21 can buy cannabis products without a medical card. Many people who used to get medical marijuana think it's easier to just buy recreational cannabis, so they don't bother to get a doctor's note and pay for a medical card.
Cost of Medical Licensing
In Arizona, you have to pay $150 each year for a medical marijuana card ($75 for some people who pay less). But people buying recreational cannabis only pay a 16% tax. For people who only use cannabis sometimes, it doesn't make sense to get a medical card anymore because of the cost.
Fewer Product Offerings
Dispensaries are trying to sell more recreational products because they make more money from them. Because of this, they have less of the medical products that patients need. Patients who need special medical products, like CBD oils or sleep aids with CBN, can't find them as easily anymore.
Changing Demographics
Younger people are also part of why medical marijuana sales are down. Younger people are usually okay with using the recreational system. They want things to be fast and easy, and they like buying things quickly off the shelf. Older people might want to talk to a doctor and have a plan for how much to take.
Loss of Institutional Support
Because fewer people are using medical marijuana, there are fewer places to get help and information. Clinics that helped people with cannabis therapy are closing, so new patients can't get advice.
Consequences for Patients
Even though it's easier to buy recreational cannabis, it might not be good for people who really need it for medical reasons. Recreational stores don't usually help with things like figuring out the right amount to take, making long-term treatment plans, or giving personal care. For patients who have long-term illnesses like epilepsy, PTSD, or pain from cancer, this change in the market can feel like they are being left behind.
The Recreational Cannabis Market: Maturing, Not Exploding
Recreational cannabis has been the main thing driving the cannabis business in Arizona for the past few years. In 2024, it's 81% of all sales (Associated Press, 2024). But even this big part of the market is starting to slow down a little. Sales are going down a bit, which suggests that the excitement when it first became legal is going away.
Key Market Forces At Play
Price Compression
Many growers and stores have opened up, so there's a lot of cannabis available. When there's more supply than people buying, prices go down for both stores and growers. Customers like lower prices, but businesses make less money.
Retail Saturation
There are now hundreds of stores that sell cannabis in Arizona. Cities like Phoenix, Tucson, and Flagstaff have a lot of stores. Customers don't always go to the same store. Many stores have discounts and deals every day, so many customers just go to whichever store has the lowest price.
Reduced Novelty
When cannabis first became legal, some sales were from people who were just curious and wanted to try it. Now, most of those people have already tried it, so there are fewer new customers. The customers who keep buying cannabis want good quality, good prices, and products that are always the same. They don't just want something new and different.
Increased Competition from Neighboring States
States near Arizona, like New Mexico and California, also sell cannabis. Some people go to those states to buy cannabis because it's cheaper there, especially if they are buying a lot.
National Parallels: Arizona Isn’t Alone
What's happening in Arizona is similar to what's happening in other places where cannabis has been legal for a while
- California: Prices dropped a lot, which caused people to lose their jobs and farms to close.
- Colorado: Growth has stopped after growing steadily for years. Many businesses are joining together or closing.
- Oregon: There's too much cannabis, which has made prices low and caused problems for businesses.
In all of these places, things changed when growth slowed down. Now, businesses need to be more efficient and come up with new ideas.
Cannabis Taxes: Still a Win for Arizona
Even though sales are slowing down, the cannabis business still made $190 million in taxes for Arizona in 2024 (Associated Press, 2024). Recreational cannabis made over $170 million from the state's 16% tax, and medical cannabis made over $20 million more from lower taxes.
Where That Money Goes
-
Community Colleges
A lot of the tax money goes to schools. It pays for job training, fixing buildings, and helping students pay for classes. -
Public Safety
Police get money for training and programs that help the community, including programs that try to fix the harm caused by old cannabis laws. -
Roads and Transit
Money from cannabis taxes is being used to pay for roads and public transportation, especially in areas that don't have much money. -
Equity Programs
Arizona's law says that some of the tax money should go to help groups that were hurt the most by old drug laws. This includes programs that help people clear their criminal records and programs that give money to small businesses.
Even though sales are down a little, cannabis taxes still bring in a lot of money that is important for Arizona.
Consumer Behavior: Smarter, Slower, More Intentional
How much people pay for things, how the market has changed, and changes in culture have all changed how people use cannabis in Arizona now. It's not just how much they buy, but also how they buy it.
Changing Habits at a Glance
-
Buying Less, But Better
People are not buying as much cannabis, but they are buying better quality items that will last longer. -
DIY Rolling & Craft Smoking
More people are rolling their own joints and blunts. It saves money, lets them choose exactly what they want, and makes them feel like they made something themselves. -
Cannabis as a Ritual, Not a Rush
Social media and cannabis groups are now talking about making cannabis use an experience. This means setting the right mood, picking the right types of cannabis, and making sure it burns just right. -
Maximizing Every Gram
Tools like CannaMolds from Purple Rose Supply help people pack cannabis tightly into rolls that burn slowly. This makes each smoke last longer and feel stronger but smoother.
People are now focusing on making cannabis use a better experience instead of just buying a lot of it to have fun quickly.
What Arizona’s Cannabis Trends Mean Nationally
What's happening with cannabis in Arizona is not just happening there. It shows what might happen in the rest of the U.S. market
- Market Consolidation: Smaller businesses are being bought by bigger ones or closing because they can't compete.
- Consumer Maturation: There are fewer people trying cannabis for the first time, so most buyers know what they want.
- Focus on Wellness: Cannabis for health reasons (like CBN, CBD, and small amounts of edibles) is becoming more popular than just using it to get high.
- Craft Revival: As mass-produced cannabis becomes boring, special, high-quality, or handmade products are becoming popular again.
For new markets like Missouri, New York, and Virginia, Arizona shows some important things: keep selling different medical products, don't let there be too many stores, and help local people learn about cannabis.
Cannagar Culture: Redefining the Premium Experience
Because prices are not going up anymore, rolling your own fancy cannabis smokes is becoming a popular new trend. In places like Los Angeles and Austin, "cannagar clubs" have become popular, and Arizona is starting to see this too.
Benefits Driving the Craze
-
Prolonged Burn
Cannagars that are made well can burn for up to 3 hours because the cannabis is packed in tightly. -
Aesthetic and Pride
People show off their cannagars online. Smoking them is becoming a way to show off and also something to enjoy personally. -
Personal Control Over Strains
When you make your own cannabis roll like a cigar, you can choose exactly what kind of cannabis to use to match your mood, music, or even food.
Purple Rose Supply is one of the main companies helping with this trend. They sell molds that make it easy for people who are new to smoking and people who have been rolling for a long time to join in.
Tips for Living Through a Changing Cannabis Market
Here's how to do well as the cannabis market in Arizona changes
- Get better smoking tools (buy tools that make smokes last longer and things you can use again)
- When you shop, think about what kind of cannabis you want, not just how strong it is
- Learn about terpenes and how much cannabis to use
- Join groups online or in your area to share tips and learn from others
- Talk to the people at the store. Ask them about rolling products and ways to use cannabis that make it better quality
If you know more about cannabis, you can make better choices, especially when money is tight.
Conclusion: It’s a Pivot, Not a Plunge
Cannabis sales in Arizona might be going down, but it's not a disaster. It's just changing. The drop in medical marijuana sales shows that we need to have different kinds of products and better rules. Recreational cannabis is still the main part of the market, but people are buying it in smarter ways and choosing more carefully.
Now is a chance to be creative. Businesses should focus on making good experiences instead of just selling a lot, making cannabis use a special thing instead of just something casual, and really connecting with the community instead of just trying to make quick money.
This is a time to change what we're doing, not to worry.
