Arizona Marijuana Taxes Reach Nearly $200 Million in First Eight Months of 2025, About $1 Billion in Sales

Arizona taxes recreational marijuana with a 16% excise tax on top of the standard state and local sales taxes, while medical marijuana is taxed only at the regular sales tax rate. In total, the state garnered $21,593,029 from around $107 million in licensed cannabis sales. The total cannabis tax revenue for 2025 now stands at $190,942,844, coming from nearly $1 billion in sales. Revenue from the excise tax is divided into several funds: the largest share goes to community colleges and public safety, while portions are directed toward the state’s Highway User Fund, justice reinvestment programs, and the Arizona Department of Health Services. The sales tax portions, meanwhile, are split between the state general fund, local governments, and education.

Voters approved recreational marijuana in November 2020 with Proposition 207, and the first licensed recreational sales began on January 22, 2021. Arizona’s swift rollout made it one of the fastest states to move from voter approval to retail sales.

Since legalization, marijuana has become a steady source of state revenue. In 2024, Arizona collected nearly $290 million in marijuana taxes.