One Year Later: The Impact of Going Rec in Arizona
By Raul Molina, Co-Founder and COO of Mint Cannabis
When Prop. 207 passed during the 2020 election, Arizonans wondered how the state would be impacted when cannabis dispensaries opened their doors to recreational use customers. Prior to this proposition passing, dispensaries in the Grand Canyon State could only serve medical cardholders.
Nearly two months after the election, qualified state-licensed dispensaries received the approval to begin conducting recreational sales. Lines wrapped around buildings as dispensaries welcomed new customers while prioritizing their existing customer base.
Now, one year later, the significance of Arizona residents voting to legalize cannabis has been broadly experienced and its effects are reverberating deeply.
The most widely anticipated benefit has been the increase in tax revenue among cities, counties, and the state. The Arizona Department of Revenue announced that total gross sales of cannabis reached more than $1.2 billion, surpassing the projected $300 million before December’s final numbers were even reported; 22% of the $1.2 billion came from recreational use. The Department of Revenue also reported that the first year of recreational adult-use cannabis revenue far surpassed neighboring states; Arizona generated $528 million, while first-year sales in Nevada topped at $425 million, followed by Oregon at $354 million and Colorado at $292 million.
And while the Arizona Dispensaries Association (ADA) expected cannabis tax revenue to be up to $140 million for the first year of legalization, actual recreational marijuana tax revenues collected through November 2021 topped $196 million. Nearly $45 million of that sum is expected to go into Arizona’s general fund, which supports more than 60 state agencies, including the Department of Education, which receives approximately 46% of the funding. In fact, more than $7.3 million from the education sales tax went toward supporting tutoring and workforce development funds, as well as to teacher compensation. And nearly $93 million collected through the marijuana excise tax went to funding community colleges, county health departments among other areas.
The ADA anticipates that that this number will continue to increase, and
may even eclipse alcohol tax revenues, which means sustained funding
for critical departments and agencies ranging from education and health
services to economic security and public safety.
To put these numbers in perspective, for the Town of Guadalupe alone, the annual cannabis tax revenue from the two dispensaries (Harvest and Mint Cannabis) operating within its boundaries is $1.24 million, which is 53% of the Town’s annual operating budget.
In addition to tax revenue across the state surpassing expectations, the move to recreational use has allowed dispensaries to do more to support the local communities they serve. At the Mint, serving our community is a cornerstone upon which our business was built. Since January 2021, we have had the honor of supporting the tireless work of nonprofit organizations that focus on cancer, wellness, veteran and homeless issues, all of which are important to sustaining a healthy, thriving community. We also have had the pleasure of collaborating with medical researchers exploring the benefits of medical marijuana to treat late-state cancer patients and veterans suffering from post-traumatic stress disorder.
Perhaps the most significant impact can be seen in on the stigma related to cannabis use. Recreational use pulled back the curtain and dispelled many myths about dispensaries. Preconceived notions about dispensaries shattered, as many who were skeptical about the industry realized that cannabis – recreational or medicinal – is in fact a highly regulated and extremely sophisticated sector. From attentive front-end staff and knowledgeable team members to specialized administrative support and seasoned management, the cannabis industry embraces the same professional tenets as one would see in other industries. Many businesses that once turned their backs to working with or benefitting from cannabis are now partners and supportive advocates.
In 12 short months – and through a pandemic, no less – the cannabis industry in Arizona has made incredible strides. Through the strong, mutually respectful working relationship between public and private entities, the industry has unequivocally demonstrated that legalizing marijuana can positively contribute to the fabric of our communities and build a stronger future for our state. However, our work is far from over when it comes to continuing to break down stigmas and taboos about the industry. Our goal is to further cement the industry as an essential service, much like a pharmacy, so that we can ultimately earn the respect of all Arizonans.
Raul Molina is Co-Founder and Chief Operating Officer of Mint Cannabis, which is headquartered in Arizona. The Mint is a multi-state operator of innovative retail cannabis dispensaries and growing facilities across the nation.