Arizona collected more tax revenue on marijuana than on alcohol and tobacco combined, March data shows
Arizona generated more tax revenue for the state’s general fund from legal marijuana sales than from tobacco and alcohol combined last month, according to state data released last week.
According to the Arizona Joint Legislative Budget Committee (JLBC), tax deposits to the state’s general fund for medical and adult-use cannabis reached about $6.3 million in March, up from $1.7 million. dollars for tobacco and $3.7 million for alcohol sales.
Beyond that $6.3 million in cannabis taxes for the general fund, marijuana excise taxes separately topped $11.9 million last month, for a total of $18.2 million. dollars in marijuana revenue, most of which goes to the state, with smaller portions distributed to cities and counties.
Advocates and stakeholders are touting the March numbers. Not only do they highlight the economic opportunity of legalization, but the hope is that providing regulated access to cannabis will mean fewer people will use more dangerous drugs like alcohol and tobacco.
New JLBC numbers have been released.
Tax receipts by industry in March:
Tobacco: $1.7 million
Alcohol: $3.7 million
Cannabis: $6.3 million
Happy 420, Arizona taxpayers!
— Arizona Association of Dispensaries (@az_dispensaries) April 20, 2022
To this end, liquor tax revenue was $1.4 million lower than the JLBC projections, but the analysis did not attempt to provide an explanation or suggest that a substitution was at stake.
The report also notes that the state has separately collected $149.7 million in marijuana tax revenue so far this fiscal year.
“These numbers clearly indicate that Arizonans have fully embraced legal cannabis,” Samuel Richard, executive director of the Arizona Dispensaries Association, told Marijuana Moment. “And despite overly restrictive regulations and decades of flawed social policy as impediments, tax revenue far exceeds other recreational categories like tobacco and alcohol.”
“Can you imagine what the fiscal impact would be if the government were a partner in our success, rather than an adversary? he said.
The State Department of Revenue (DOR) reported earlier this year that Arizona recorded more than $1.4 billion in cannabis sales in the first year of implementing the use by the adults. This figure includes total sales of recreational and medical marijuana.
While it’s unclear to what extent legalizing marijuana might impact alcohol consumption or sales, Arizona isn’t the only state to see significant changes in state revenue. so-called “sin tax” after the reformation.
The Institute on Taxation and Economic Policy released an analysis last week that looked at 11 states that have legalized marijuana for adult use and found that on average, “cannabis revenues have exceeded alcohol by 20% ” in 2021.
Massachusetts collects more tax revenue from marijuana than from alcohol, according to state data released in January. As of December 2021, the state had collected $51.3 million in alcohol taxes and $74.2 million in cannabis taxes midway through the fiscal year.
Illinois also saw cannabis taxes beat alcohol for the first time last year, with the state collecting about $100 million more from adult-use marijuana than alcohol in 2021. And news Data shows that the Illinois adult-use market had its second-highest monthly cannabis sales in March, reaching $131 million.
For what it’s worth, a recent poll found that more Americans think it would be good if people switched to marijuana and drank less alcohol than they think substance substitution would be bad.
When asked in the YouGov survey, 27% agreed it would be ideal if people consumed more cannabis instead of alcohol, while 20% said it would be a bad idea.
Voters in Austin, Texas can officially start voting on the local marijuana decriminalization initiative