Arkansas medical marijuana sales down 4% through June
Arkansas’ medical marijuana sales totaled $135.5 million in the first half of 2024, down from the $141 million in the same period of 2023, a year with record sales of $283 million, according to the state’s Department of Finance and Administration.
The Arkansas Department of Health reports 105,039 active patient cards as of July 23, up 7.9% compared with the 97,374 active patient cards as of Jan. 9. State tax revenue collection on medical marijuana during the second quarter was $7.9 million, bringing the total since the industry launched in 2019 to $136 million.
Taxes collected are 6.5% of regular state sales tax with each purchase by a patient and a 4% privilege tax on sales from cultivators to dispensaries. Most of the tax revenue is placed in the University of Arkansas for Medical Sciences National Cancer Designation Trust Fund. The state also collects a cultivator privilege tax, which means tax revenue is not always tied to how much product is bought by consumers at dispensaries and the price for the product sold to dispensary customers.
Arkansas medical marijuana sales set a new record in 2023 with a 2.53% increase over 2022. Following are the annual sales since 2019.
2023: $283 million
2022: $276.3 million
2021: $264.9 million
2020: $181.8 million
2019: $31.32 million
The top five dispensaries for product sold in the second quarter were Suite 443 in Hot Springs with 1,818 pounds, Natural Relief Dispensary in Sherwood with 1,709 pounds, CROP in Jonesboro with 1,122 pounds, High Bank Cannabis in Pine Bluff with 1,000 pounds, and The Source in Rogers with 841 pounds.
The constitutional amendment legalizing medical marijuana for 17 qualifying conditions and creating a state medical marijuana commission was approved by Arkansas voters 53% to 47% in November 2016.
Data analysis firm IBISWorld reports that the U.S. medical marijuana dispensary market has had a compounded annual growth rate of 21% in the past five years, with total U.S. sales estimated to reach $19.4 billion in 2024. IBISWorld said an emerging threat to medical marijuana companies is a trend among states to legalize some form of recreational marijuana.
“Many states begin by legalizing medical marijuana sales before eventually legalizing recreational marijuana sales as well,” IBISWorld noted. “When this occurs, medical dispensaries tend to experience a slowdown in the number of new patients they receive, as recreational consumers do not require a special license, which can be costly, and few provide sufficient benefits for consumers to be patients rather than traditional customers.”
According to Flowhub, a cannabis industry technology provider, 79% of Americans live in a county with at least one dispensary. The company also reports that there are 440,445 full-time equivalent jobs in the U.S. supported by legal cannabis, and the U.S. cannabis industry is expected to reach sales of almost $40 billion in 2024.