May 8, 2019

Sales of Cannabis Extracts Jumps 24% as Arizona Supreme Court Debates Legality of Products


The Arizona Department of Health Services (ADHS) recently released its monthly report on the state’s medical cannabis program for March 2019. Retail sales volume of flower – as well as all products combined – jumped to establish new record highs for the state’s market, topping the previous peak established in December 2018. Sales volume of extracts and non-edible infused products spiked sharply once again, possibly reflecting the legal uncertainty around such items. Despite record-setting demand, Arizona’s Spot Index declined for much of March, with the monthly average price off slightly compared to February’s.

As of March, Arizona’s medical cannabis program counted 193,672 patients on its rolls. That figure is up by 1% from the 191,683 patients registered in the program at the end of February. The rate of increase in the state’s patient count in March represents a slowdown compared to the 1.5% uptick in registered patients recorded the month prior. Arizona’s patient count is up by 19.2% year-over-year, compared to 162,528 patients counted as of March 2018.

According to ADHS numbers, 11,674 pounds of cannabis flower were sold through the state’s dispensaries in March, a figure that is up by 10.9% compared to the 10,527 pounds retailed to registered patients in February. March’s flower sales volume represents a new record for Arizona’s medical cannabis market, topping the previous peak of over 11,200 pounds documented in December 2018.

The ADHS report also includes sales volume figures for edibles and “marijuana other,” which constitutes extracts and non-edible infused products. March saw 546 pounds of edibles sold, up sharply from 474 pounds sold the month prior.

After increasing markedly since late last year, sales volume of “marijuana other” products exploded in March. 713 pounds of “marijuana other” products were retailed in Arizona in March, compared to 575 in February, an increase of 24%. The spike in sales is even more dramatic when one considers that extracts and concentrates are frequently sold in gram or half-gram increments. The Arizona Supreme Court last month heard oral arguments in a case that could result in cannabis extracts being declared definitively illegal in the state. It is possible the ongoing legal proceeding is driving increased demand for such products.

Combined sales volume of all product types reached 12,933 pounds in March, up by 11.7% from February’s total sales volume of 11,575 pounds. March’s overall sales volume also represents a new historic high for Arizona’s market, topping the previous record of 12,237 pounds of all product types recorded in December 2018.

March 2019’s total sales volume is up by 35.6% year-over-year, relative to the 9,535 pounds of all product types sold to patients in March 2018. Considered on its own, March 2019’s flower sales volume is up by a slightly smaller proportion – 34.4% – compared to the 8,687 pounds retailed in the same month a year prior. The year-over-year growth rate in edibles sales volume for March 2019 was lower than that of flower at 22.4%. Meanwhile, the increase in sales volume of “marijuana other” products from March 2018 to 2019 was 77.8%.

Perhaps in response to strong demand, Arizona’s Spot Index rose to reach its current annual peak in early March. However, it would close March down by 0.7% from the beginning of the month. For March overall, Arizona’s composite price was up by 1.1% from February.