Less Than 100,000 Patients Enroll in Arizona MMJ Program
Arizona’s legal cannabis market has changed substantially since the legalization of medical marijuana back in 2010, and with the launch of recreational weed ten years later, in 2020. However, less than 100,000 patients registered with the state medical program this summer, which in its best days accommodated three times more users than that. Recreational sales are also staggering, with figures repeatedly failing to surpass the $100,000 monthly threshold.
Arizona’s medical cannabis market has been stagnating ever since the Grand Canyon State legalized adult-use marijuana. However, over the summer, Arizona’s medical marijuana seems to have reached new lows. The number of patients who use the state program to treat qualifying conditions fell under 100,000, which points to the fact that the recreational market is doing much better (though it also has problems), and perhaps changing consumer behavior.
Arizona is among the top ten most successful legal marijuana markets in the U.S. Its medical market was launched in 2012 with the passage of Proposition 203 in 2010. Before enacting recreational marijuana legislation, Arizona had almost 300,000 qualifying patients registered with the state program. It’s easy to assume that many of those medical users have in the meantime switched to recreational purchases for various reasons.
The total number of registered state marijuana patients dropped from 100,753 in May this year to 97,610 in June. In July, the number of medical patients went down further and is now below 95,000, the Arizona Department of Health Services reported.
The drop in enrolled patients using the state’s MMJ program is also reflected in decreased profits in the medical segment of the Arizona marijuana market.
Revenue from medical marijuana sales in Arizona fell below $20 million in the summer. The all-time high of $73.4 million in April 2021 now seems like a hazy memory.
It’s not all that brilliant in the recreational sector either. Sales of recreational marijuana generated $73.8 million in June, the lowest figure reported since February 2022. In its best months, Arizona recreational marijuana sales have easily topped $100,000, but last time something like that happened was in the spring of 2023.
The combined Arizona cannabis market has declined about 14.5% during the past two years, according to the analytical firm Headset. A similar scale of decline has also been observed in neighboring Colorado, however. Therefore, it could be a pattern with the older legal markets.
Why Is the Arizona Cannabis Market Losing Profits?
A major contributing factor in the decline of sales in Arizona’s legal marijuana may be the increased number of dispensaries, which in turn is pushing prices to fall.
Arizona has limited dispensary licenses, but between June 2023 and June 2024, the number of licensed retailers grew for 13.5%. The state reportedly gained 20 new marijuana dispensaries, from 148 to 168, which might not seem so much but it has anyway created a more competitive environment.
The presence of more retailers has led to a drop in wholesale prices. If cannabis products on average cost nearly $21 in the summer of 2023, now the average is slightly below $19.
While those would be some of the main challenges, industry insiders are confident that the market continues to be strong, in particular when considering the valuation of cannabis real estate and assets.
Drew Mathews, CEO of Green Life Business Group, has pointed out that a retail license in Arizona can still sell for around $8 million, even when the business hasn’t been set up yet.
“Arizona is still by far one of the best markets and retains its value due to the limited licenses,” Mathews said in a recent statement. “The values in Arizona are definitely unique in that regard, considering how long the market has been around,” he added.
For now, the best month for Arizona’s adult-use marijuana sales remains March 2023, when the Arizona Department of Revenue reported a total of $103.5 million in profits. Whether Arizona businesses build the same success in the near future it’s unlikely, but better days may always be around the corner.
Also read on Soft Secrets:
- Michigan Shifts to Surprise Inspections on Pot Businesses
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Stephen Andrews
