Arizona Legal Cannabis Market Size, Share & Trends Analysis Report By Source (Marijuana, Hemp), By Derivatives (CBD, THC, Others), By Cultivation, By End-use (Recreational, Medical), And Segment Forecasts, 2024 - 2030

Market Size & Trends

The Arizona legal cannabis market size was valued at USD 1.26 billion in 2023 and is expected to grow at a compound annual growth rate (CAGR) of 14.4% from 2024 to 2030. Increasing burden of chronic pain and rising demand for effective pain management therapies are boosting the growth of the market. Moreover, rising awareness and the legalization of cannabis consumption is expected to accelerate the demand for cannabis in Arizona over the forecast period.

Legalization Timelines

• 1996: The Drug Medicalization, Prevention, and Control Act was passed in Arizona after receiving 65% votes. This drug policy reform, also known as Proposition 200, allowed doctors to recommend or prescribe Schedule I drugs or cannabis for patients with debilitating or terminal illnesses. The initiative also required probation instead of jail time for individuals who were nonviolently using drugs for personal reasons.

• November 2002: A medical marijuana initiative called Proposition 203 was put to vote; however, it failed with 42.7% votes. The initiative was aimed to not only legalize medical cannabis but also to decriminalize recreational use. It included provisions such as: (a) Allowing patients to have up to 2 ounces of cannabis and grow two plants for personal use. (b) Setting up a state-run program for distributing medical marijuana to patients. (c) Making the possession of up to 2 ounces of cannabis for any purpose a civil offense punishable by a fine of USD 250. (d) Implementing new sentencing reforms for non-violent drug offenses, building upon the reforms established in 1996.

• December 2010: Arizona voters approved the Arizona Medical Marijuana Act, legalizing medical cannabis for patients with qualifying medical conditions. The Arizona Medical Marijuana Act, also known as Proposition 203, was a proposal to legalize medical cannabis. With 50.1% of the votes in favor, the initiative was approved by voters. It grants patients with a doctor's recommendation the right to possess up to 2.5 ounces of cannabis to treat specific qualifying medical conditions. The initiative also limits the number of dispensaries to 124 and stipulates that only patients who live more than 25 miles away from a dispensary can grow their own cannabis.

• 2016: Arizona voters rejected a ballot initiative to legalize recreational marijuana. The Arizona Marijuana Legalization Initiative, or Proposition 205, was a proposal to legalize recreational cannabis in the state. Despite receiving 48.7% votes, the initiative failed. If passed, it would have allowed adults to possess up to one ounce of marijuana and grow as many as six plants for personal use. The initiative also included plans for a commercial distribution and tax system for marijuana, with the extra tax revenue funding public schools and substance abuse programs.

• In November 2020, Arizona voters approved Proposition 207, legalizing recreational use of cannabis for adults over the age of 21. Proposition 207 passed, legalizing recreational cannabis use. In December 2020, the proposition was enacted, making it legal for adults over 21 to possess, use, and grow limited amounts of cannabis.

• Ongoing: The state continues to regulate and oversee the marijuana industry, including setting standards for testing, labeling, and enforcing rules related to advertising, packaging, and product safety. However, cannabis remains illegal under federal law and may have potential legal consequences for individuals traveling across state lines with cannabis or working in federal facilities.

Marijuana tax revenue, Arizona, 2021

Regulations and Norms

Medical marijuana is legal in Arizona since 2010, after the approval of the Arizona Medical Marijuana Act. The law allows patients with qualifying medical conditions to utilize medical marijuana with a recommendation from a licensed physician. Some of the qualifying conditions for the use of medical cannabis include cancer, glaucoma, Crohn's disease, and Post-Traumatic Stress Disorder (PTSD).

Patients are required to obtain a medical marijuana card from the Arizona Department of Health Services to purchase and use medical marijuana legally. The department is responsible for regulating and overseeing the state's medical marijuana program, including setting standards for testing and labeling and enforcing rules related to advertising, packaging, and product safety.

Recreational Use

• Legal age for possession of cannabis is 21 and above

• Adults 21 years or older have the right to possess one ounce of marijuana and grow as many as six plants in their homes

• Public use or consumption of cannabis in an open place is prohibited in Arizona

• Licensed retail outlets can operate only between 8 am and midnight

• Tax of 16% is placed on the use of marijuana products

Medical Use

In Arizona, cannabis, both medical and recreational, is regulated by the Arizona Department of Health Services (ADHS). The ADHS sets standards for testing, labeling, advertising, packaging, and product safety of cannabis products, as well as enforcing rules related to these areas.

Retail marijuana dispensaries are required to be licensed by ADHS and are the only places where adults can legally purchase recreational marijuana. Products are required to meet strict quality & safety standards, including being tested for potency and contaminants.

Medical cannabis patients with a qualifying medical condition and a medical cannabis card issued by the ADHS are allowed to purchase medical cannabis from licensed dispensaries. Medical cannabis products must also meet quality & safety standards and be labeled accordingly.

Arizona Legal Cannabis Market Report Scope

Arizona Legal Cannabis Market Report Segmentation

This report forecasts revenue growth at country levels and provides an analysis on industry trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research, Inc. has segmented the Arizona legal cannabis market report based on source, product type, cultivation and end-use:

• Source Outlook (Revenue, USD Million, 2018 - 2030)

  • Hemp

    • Hemp CBD

    • Industrial Hemp

  • Marijuana

    • Flower

    • Oil and Tinctures

• Derivatives Outlook (Revenue, USD Million, 2018 - 2030)

  • CBD

  • THC

  • Others

• Cultivation Outlook (Revenue, USD Million, 2018 - 2030)

  • Indoor Cultivation

  • Greenhouse Cultivation

  • Outdoor Cultivation

• End-use Outlook (Revenue, USD Million, 2018 - 2030)

  • Industrial Use

  • Medical Use

    • Chronic Pain

    • Depression and Anxiety

    • Arthritis

    • Post-traumatic Stress Disorder (PTSD)

    • Cancer

    • Migraines

    • Epilepsy

    • Alzheimer’s

    • Multiple Sclerosis

    • AIDS

    • Amyotrophic Lateral Sclerosis

    • Tourette’s

    • Diabetes

    • Parkinson's

    • Glaucoma

    • Others

  • Recreational Use