Arizona Medical Cannabis Market

In December 2010, Arizona voters passed the Arizona Medical Marijuana Act (AMMA). The AMMA went into effect on April 14, 2011, making Arizona the 14th state to adopt a medical cannabis law.

Cannabis extracts – including concentrates, vaporizer cartridges and infused food and beverages – are considered legal under an Arizona Supreme Court ruling (May 2019) and the state’s medical marijuana dispensaries can sell them.

In 2020, 211,557 pounds have been sold in total, a 28% increase over the 165,722 pounds that were purchased in 2019, according to a report from the state Department of Health Services. There were 130 registered nonprofit medical cannabis dispensaries, with 123 operating facilities and almost 300,000 medical cannabis active qualifying patients.

• Medical cannabis sales in Arizona grew to about $580 million in 2019 according to the report.
• The Arizona cannabis market reached revenues of $750 million in 2020.

Under SB 1494, beginning Nov. 1, 2020, all medical cannabis products in dispensaries must be tested for potency and cannabis contaminants including mold, mildew, fungus, heavy metals, pesticides, herbicides, fungicides, artificial hormones and residual solvents.

Arizona Recreational Cannabis Market

On November 3, 2020, voters approved a proposition that legalizes recreational cannabis. Proposition 207 legalized the possession and use of cannabis for adults (age 21 years or older) in the state and placed a 16% tax on cannabis sales, in addition to the existing transaction privilege tax and use tax. The ballot initiative made the Arizona Department of Health Services (DHS) responsible for adopting rules to regulate cannabis, including the licensing of retail stores, cultivation facilities, and production facilities.

Recreational cannabis sales started in January 2021 and both programs, medical and recreational, have combined to $1.363 billion in cannabis sales in the first 12 months, including about $764 million in medical and $599 million in adult-use cannabis.

2022 generated $1.422 billion, including $519 million from medical cannabis sales and $903 million from recreational cannabis sales, with a growth rate of 50%.

In 2023, cannabis sales totaled $1.366 billion, with $348 million from medical cannabis sales and $1.018 billion from recreational cannabis sales, representing nearly 75% of total sales.

Arizona Cannabis Market Infographics

Arizona Hemp/CBD Industry