October 14, 2019

August Cannabis Sales in Arizona Medical Program Establish New Record High for Second Month in a Row

The Arizona Department of Health Services (ADHS) recently released its monthly report on the state’s medical cannabis program for August 2019. Retail sales volume of flower – as well as all products combined – ascended to establish new record highs for the second consecutive month. Meanwhile, the state’s patient count slipped for the first time in recent memory. Arizona’s Spot Index continued to trend downward gradually in August, the second straight month in which it has been documented to do so.

As of August, Arizona’s medical cannabis program counted 204,271 patients on its rolls. That figure is down by 0.7% from the 205,609 patients registered in the program at the end of July. Previously, Arizona’s medical cannabis patient count had risen consistently through 2018 and the first seven months of this year.

According to ADHS numbers, 13,367 pounds of cannabis flower were sold through the state’s dispensaries in August, a figure that is up by 5.7% compared to the 12,650 pounds retailed to registered patients in July. August is the second consecutive month in which flower sales volume established a new record in Arizona’s medical cannabis market.

The ADHS report also includes sales volume figures for edibles and “marijuana other,” which constitutes extracts and non-edible infused products. August saw 497 pounds of edibles sold, up by 0.6% from 494 pounds sold the month prior.

“Marijuana other” products continued to see expansion in sales volume in August, though not of the magnitude observed in July. 881 pounds of “marijuana other” products were retailed in Arizona in August compared to 839 in July, an increase of 5%.

Combined sales volume of all product types reached 14,745 pounds in August, up by 5.4% from July’s total sales volume of 13,984 pounds. As was the case with flower sales volume, August’s overall sales volume is now the historic high for Arizona’s market, vaulting over the previous record set last month.

The ADHS report shows that demand was elevated on August 30, the Friday ahead of Labor Day weekend. Although sales on that Friday were higher than on any other Friday in August, they did not spike extremely high as they have been observed to do on some other holidays.

Sales volume of “marijuana other” products rose sharply as a state Supreme Court case on their legality drew attention and progressed. The case was decided in late May, with the court concluding that extracts and related products were legal in Arizona’s medical cannabis system.

Persistent growth in sales of “marijuana other” products recorded in ADHS report for August – three months after the case was decided – affirm our earlier hypothesis that increased demand for extracts since late last year has been due more to organic market forces rather than specific anxieties about their potential illegality.

It remains to be seen whether sales of “marijuana other” products will contract in September due to the current epidemic of illnesses related to vaping. Arizona is one of the country’s only regulated cannabis markets that does not currently require quality assurance and safety testing of products, which could decrease consumer confidence. Such testing is scheduled to begin late in 2020 under legislation passed earlier this year.

August 2019’s total sales volume is up by 36.2% year-over-year, relative to the 10,826 pounds of all product types sold to patients in August 2018. Considered on its own, August 2019’s flower sales volume is up by a slightly smaller proportion – 33.6% – compared to the 10,005 pounds retailed in the same month a year prior. The year-over-year growth rate in edibles sales volume for August 2019 was lower than that of flower at 28.1%. Meanwhile, the increase in sales volume of “marijuana other” products from August 2018 to 2019 was 103.5%.