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Marijuana tax bringing in more money than projected in first year

Marijuana Legalization
Posted at 10:35 AM, Jan 22, 2022
and last updated 2022-01-22 12:35:28-05

PHOENIX — Arizona’s law legalizing recreational marijuana use for adults is a year old and it didn’t take long before a backstreet business turned into a mainstream industry.

Combined with medical marijuana sales, Arizona’s cannabis industry now exceeds $1 billion in revenue. At dispensaries like Harvest in Tempe, business is brisk.

“We saw a program that jumped in a way we hadn't seen in any other place across the country. We expect that to continue to grow over the next few years,” said Steve White, President of Trulieve, which owns Harvest.

Trulieve sells cannabis products in eight states. It operates 17 dispensaries across Arizona and plans on opening three more in 2022, making it the largest seller of marijuana in Arizona.

Arizona collects two taxes off cannabis sales, a transaction privilege tax and a 16% excise tax. According to the Arizona Department of Revenue, the state’s collected close to $200 million in taxes in 2021 from medical and recreational marijuana sales. “Let’s put it this way,” White said, “it’s a whole lot greater than people predicted it would be in the state of Arizona.”

When voters passed Prop 207 in 2020 legalizing recreational marijuana, the marijuana industry estimated the state would generate $135 million in combined medical and recreational marijuana tax revenue.

Prop 207 dedicated excise tax revenues to help community colleges, municipal police, and fire districts, the Highway User Fund, Justice Reinvestment Fund, and the Attorney General.

In 2021 the Maricopa County Community College District said it received $17.1 million from the marijuana excise tax. Money MCCCD says it’s using to benefit, among other things, trade and technical training at its colleges.