Medical-pot sales zoomed 42 percent in Ariz. last year

Sales of medical marijuana surged 42 percent in Arizona last year, with patients buying 61 tons of the plant, edibles and other products at licensed dispensaries, according to a new state report.

The Arizona Department of Health Services no longer provides dollar estimates in its monthly sales reports. But based on the retail prices advertised by major dispensaries in the Phoenix area, the industry took in more than $400 million in revenue for the year, not including sales of pipes and other non-drug merchandise.

That’s a conservative estimate based on marijuana selling for an average of $3,300 a pound. The actual fig-

ure could be much higher. A report commissioned last summer by dispensaries in the state estimated the average retail price at about $4,800 a pound, but that it will decline as farms get more efficient.

The increase in sales outpaced the growth in new medical-marijuana patients.

The Arizona Department of Health Services data show that the number of patients grew 22 percent to more than 186,000 in December. Patients pay a $150 fee to the state and about $100 to $200 to a medical professional to give them the needed certification.

“Two-hundred thousand patients at $300 an experience (to visit a doctor and pay the state fee) to be able to access this product legally, that tells you a great deal,” said Kevin DeMenna, lobbyist for the Arizona Dispensaries Association. “That is a high financial threshold, and it takes time to get this medical certification.”

Some high-end marijuana at dispensaries sells for as much as $5,000 a pound, while lower-end marijuana can be found for sale for about $2,100 a pound. Patients with certifications can only buy 2.5 ounces of marijuana every two weeks, so an ounce is usually the largest package size offered by Arizona dispensaries.

While the average amount of marijuana purchased by each cardholder is increasing, DeMenna said the figures can be misleading because of the rise of extracts and concentrated forms of the drug.

The sale of marijuana-infused gummy candies, baked goods, sodas and concentrated forms of marijuana that are smoked grew significantly more — 55 percent — than sales of dried marijuana flower, up 40 percent.

While measuring the weight of dried marijuana that cardholders buy is straightforward, the state uses a complicated formula to measure the weight of the plant used to make items such as vape cartridges.

“It really muddles the data,” DeMenna said of extracts.

A June analysis that the Dispensary Association commissioned from Rounds Consulting Group in Tempe estimates that sales growth in Arizona’s medical-marijuana industry should stay above 10 percent annually through 2027, though it will slow from the current pace.

“Product sales volume will continue at a strong pace, but the rate of growth will steadily slow over time as the base becomes larger,” the report said.

Medical-marijuana sales are subject to the state’s 5.6 sales tax, meaning the estimated $400 million in sales last year brought in $22.4 million in revenue to the state, not counting the additional city and county taxes that range from 0.25 percent to 4 percent.