Arizona’s Cannabis Industry Sees Decline in Sales in 2024
The Arizona Department of Health Services has reported a significant drop in combined medical and recreational marijuana sales in 2024, with total sales reaching just over $1.1 billion. This marks a decline from the nearly $1.4 billion recorded in both 2022 and 2023.
Industry experts attribute the decline to shifting consumer behavior and increased market competition. Michael Shew, Operations Director at Earth’s Healing dispensary in Tucson, notes that customers are becoming more price-sensitive and are seeking out cheaper alternatives.
One factor contributing to the decline is the proliferation of unregulated sales. Shew explains that some consumers are opting for illegal or unlicensed sellers, which can offer lower prices but also pose health risks.
Despite the decline in sales, consumers are benefiting from lower prices. According to data from Headset.io, the average price of cannabis products in Arizona dropped from $19.92 in January 2024 to $18.37 in January 2025.
The decline in sales also has implications for institutions that benefit from marijuana tax revenues. Arizona imposes a 16% excise tax on recreational marijuana sales, with a portion allocated to community colleges. In 2024, the state collected $245.3 million in marijuana taxes, with $151.2 million from excise taxes and $75.7 million from recreational sales taxes.
Pima Community College, which receives approximately 3% of its operating budget from marijuana tax revenues, is concerned about potential fluctuations in this funding. David Bea, Vice Chancellor of Finance at PCC, notes that a decline in funding could result in cuts to programs such as workforce training and development.
Looking ahead, industry representatives anticipate continued challenges in 2025. However, they also expect a potential uptick in sales during the 4/20 holiday, a date traditionally associated with increased cannabis consumption.
Overall, the decline in Arizona’s cannabis industry is a complex issue with multiple factors contributing to the decline. While consumers are benefiting from lower prices, institutions that rely on marijuana tax revenues are facing uncertainty and potential funding cuts.
