Now that Arizonans legalized marijuana via Prop 207, many recreational marijuana consumers are already considering becoming medical marijuana patients because it would save them 16% in excise tax per marijuana purchase at a dispensary — a tax not imposed on patients. In other words, patients save $16 per every $100 spent on marijuana compared to recreational buyers.
For example, if recreational dispensaries decide to sell an ounce of marijuana for $300, then the buyer will spend $373.80 total because of $73.80 (24.6%) in combined taxes, of which $48 is the 16% excise tax only imposed on recreational marijuana sales.
Medical marijuana patients can also purchase and possess more marijuana than recreational users and buy edibles with a higher potency. Prices will also be lower on medical marijuana purchases.
It is fairly easy and inexpensive to become a medical marijuana patient: every two years medical marijuana patients have to pay for a doctor appointment of approximately $150 and a state fee of $150. This investment can lead to massive savings at dispensaries.
Arizona Marijuana Taxes
Arizona’s sales tax rate is currently at 5.6%, and the state will also collect a 16% excise tax on all recreational cannabis sales. There are also city and county sales taxes to include. Below are examples of combined sales tax rates (for state, county and city taxes) for adult-use marijuana purchases versus medical marijuana purchases for Phoenix and Tucson.
Phoenix Recreational Marijuana Sales
8.6% sales tax plus 16% excise tax equals 24.6% total taxes on recreational marijuana sales in Phoenix, Arizona.
Phoenix Medical Marijuana Sales
8.6% sales tax is the total tax on medical marijuana sales in Phoenix, Arizona.
Tucson Recreational Marijuana Sales
8.7% sales tax plus 16% excise tax equals 24.7% total taxes on recreational marijuana sales in Tucson, Arizona.
Tucson Medical Marijuana Sales
8.7% sales tax is the total tax on medical marijuana sales in Tucson, Arizona.