Arizona cannabis retailers sold $1.6 billion worth of cannabis in 2021, putting the state second only to California as the country’s largest legal cannabis marketplace, according to a Cronkite News report.
Arizona earned $221.3 million in cannabis tax revenue in 2021, according to state Department of Revenue data outlined in the report. Additionally, Arizona generated $196.4 million in cannabis tax revenue during the first nine months of 2022, putting the state on track for about $22 million per month in cannabis excise taxes for the year. But experts said while the cannabis industry could play a significant role in generating state revenue, it has a long way to go before overtaking any of the traditional “five C’s” of Arizona’s traditional economy, meaning cattle, cotton, copper, citrus, and the climate (aka tourism).
Alexis Villacis Aveiga, assistant professor at the Morrison School of Agribusiness at Arizona State University, told Cronkite News that professional cannabis growers in Arizona typically face more difficulties and canopy restrictions than in other states due to its desert climate, which hinders outdoor cultivation.
“For example, we have 35,000 square feet of indoor cannabis and hemp. In California, there are over 4 million square feet, Colorado has over 2 million and Kentucky has around 200,000. So Arizona is pretty small compared to other states.” — Aveiga, via Cronkite News
Arizona voted to legalize adult-use cannabis in November 2020 and launched its legal market in January 2021, making it the quickest state at the time to move from voter approval to a fully-fledged recreational marketplace.
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