Medical marijuana sales are down badly, and recreational sales have also taken a hit, according to preliminary sales and tax figures released for June by the Arizona Department of Revenue.
Arizona’s medical marijuana program continues its slide, with $33.7 million in sales and the state bringing in just less than $2.8 million in taxes, a record low for the program since the implementation of Prop. 207, which legalized adult-use recreational cannabis.
“I think that's far more concerning and something that's very much on our radar,” said Arizona Dispensary Association director Ryan Hermansky. “It's exceptionally important for Arizona to maintain a strong medical program.”
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Hermansky, also the owner of Noble Herb dispensary in Flagstaff, said he and others within the industry believe the medical program, first established in 2011, is worth supporting for a few reasons.
First, many medical card holders often have pain or other conditions that require more potent products to help treat symptoms.
Under the state’s current recreational restrictions, products can only contain a maximum of 100 milligrams of tetrahydrocannabinol, the main psychoactive compound found in cannabis.
“That is just not strong enough for some medical patients or some consumers that have been consuming for a long period of time. They need 200, 500 milligrams or more,” he said.
Second, there are workplace protections that come along with being in the medical program.
Jon Udell, interim co-director of Arizona NORML, a consumer advocacy group, explained how that can be a huge benefit for medical patients who might work a job that requires drug tests.
“A lot of folks who work in corporate jobs, their employers won't be okay with that,” Udell said. “And certainly… those patients don't deserve to be discriminated against based on the remedy they choose to alleviate whatever symptoms they're experiencing.”
Plus, medical card holders avoid paying the state’s 16% excise tax on recreational marijuana sales and can buy and possess more marijuana product.
Still, a July report from the Arizona Department of Health Services found that the number of active medical card holders is down to just over 150,000. That’s nearly 40,000 fewer card holders than was recorded by the department in June.
Hermansky believes part of the issue is the state’s young, but healthy and robust, recreational market. It’s cannablizing the medical program.
“That’s not uncommon,” he said. “You have to spend a certain amount per year. It's gonna make sense just mathematically to save on that tax and be able to purchase more, but not everybody hits that limit.”
Recreational sales nearly doubled up their medical counterparts, with $66.4 million in sales and nearly $16 million collected in associated taxes
Udell said he believes that there are two other barriers standing in the way off potential patients joining the program and current patients renewing their status: time and money.
First, a patient needs to be diagnosed by a physician. Then, a medical card, which is good for two years, is $300.
At least on the side of addressing the “time” element, Udell had one idea.
“We could look at doing something to limit the cost, time wise. We can look at just allowing for telemedicine. We're already doing that with so many, the other forms of medicine. It seems only natural to expand that to cannabis,” he said.
Still, even after eating into some of the medical program’s sales, the burgeoning recreational market is feeling a bit of a hit, too. That $66 million in sales is down from an all-time high of over $81 million in sales in April.
Both Udell and Hermansky said some of that drop-off can be chalked up to the good ole Arizona heat and resident’s propensity to head to cooler (or beach-adjacent) locations during the season.
“It’s a summer lull,” Hermansky said. “We opened nine years ago, nine and a half years ago, and you know, we've seen a summer drop off. Every. Year. So this is what we expect.”
Because the numbers are preliminary and likely to change, there will be an update to this story soon. Follow TucsonMarijuanaGuide.com for continuing coverage.
