Arizona Cannabis Market Faces Decline In Sales Though Valuations Remain Strong
Arizona’s cannabis market, once hailed as a rising star in the industry, is now grappling with significant challenges. Despite the continued strength in asset valuations, the state has seen a marked decline in both medical marijuana and adult-use cannabis sales. Between August 2022 and July 2024, the market’s peak was in March 2023, with sales reaching approximately $127.29 million. As reported the Green Market Report, by July 2024, sales had dropped to around $90.32 million, representing a year-over-year decline of 14.5%, according to cannabis data firm Headset.
The drop in sales is evident in both the adult-use and medical marijuana sectors. Adult-use cannabis sales, which hit $87 million in February and March of this year, fell to $71 million by June. Medical marijuana sales, which reached $23 million at the beginning of the year, slipped to just $18 million in June.
Over-Saturation And Falling Prices
A contributing factor to the sales decline is the growing number of dispensaries in the state. Arizona, which once prided itself in capping dispensary licenses, has seen an increase of 13.5% in operating dispensaries from June 2023 to June 2024. The state now has 168 dispensaries, up from 148, intensifying competition in an already challenging market.
This increased competition has coincided with a …