Recreational cannabis sales in Illinois top almost $35 million in February

Bethan Rose Jenkins, Cannabis News Writer/Editorial

January was a successful month for Illinois, which reaped revenue close to the amount of $40 million during its first official month of legal sales. February was also a successful month in regards to adult-use cannabis sales in Illinois, despite the fact that revenue was $5 million less than the month prior; almost $34,805,072.01 in recorded transactions. 

Based on a report released by Gov. JB Pritzker’s office at the end of February, tax revenue from adult-use cannabis sales in Illinois exceeded $10 million in January. The most recent sales figures which equate to more than a million dollars of legal cannabis being sold on a daily basis are based on the sale of 831,600 items being sold in statewide dispensaries. However, it should be noted that the latest figures are non-inclusive of taxes.

Adult-use cannabis sales in Illinois launched with almighty success

On January 1, 2020, recreational cannabis sales in Illinois kicked off. The turnout was impressive, with hordes of residents eagerly clustering in the freezing cold for their chance to buy legal bud. Cannabis sales revenue exceeding $39 million was a welcome after-effect; $7.3 million in cannabis tax revenue was pulled in, in addition to $3.1 million in retail sales tax revenue.

Something that wasn’t such a welcome after-effect of recreational cannabis sales in Illinois although predictable was the lack of supply that occured; numerous stores were forced to close their doors to recreational customers and, instead, focus on serving the medical consumer demographic. Consumers and dispensary owners were frustrated by stock shortages; vape products and flower products have dried up to the point that operators are now considering interstate commerce.

“Today marks another milestone in the successful launch of Illinois’ legal cannabis industry. Our goal has been to build the nation’s most socially equitable program that includes new opportunities for the communities most harmed by the failed war on drugs,” said the senior advisor to Governor Pritzker for cannabis control, Toi Hutchinson. “Revenue raised in this first month will soon begin flowing back into those communities to begin repairing the damage done by the failed policies of the past and creating new opportunities for those who have been left behind for far too long.” 

An overview of cannabis tax rates in Illinois

Two taxes are imposed on legal adult-use cannabis in Illinois a seven percent growers tax and a multi-tiered retail product tax. Revenues benefit communities that have been hardest hit by the failed “war on drugs”. Additionally, tax funds are used to afford regulatory oversight, as well as to fund mental health and anti-drug programs.

Based on Gov. Pritzker’s predictions, the state’s legal cannabis market has the potential to generate a minimum of $28 million in taxes by the end of the fiscal year; June 30. This projection is expected to inflate 453 percent by June 2021; topping $127 million for the fiscal year 2021.

Listed below are the purchaser excise taxes for recreational cannabis in Illinois:

  • 10 percent of the purchase price for cannabis containing 35 percent or less of the psychoactive compound THC (tetrahydrocannabinol)
  • 25 percent of the purchase price for all cannabis containing more than 35 percent THC
  • 20 percent of the purchase price for all cannabis-infused goods, including edibles

Cannabis tax revenue in Illinois not including administrative costs is allocated in the following ways:

  • Two percent for the Drug Treatment Fund
  • Eight percent for the Local Government Distributive Fund 
  • 10 percent for the Budget Stabilization Fund 
  • 20 percent for the Department of Human Services Community Services Fund 
  • 25 percent for the Criminal Justice Information Projects Fund 
  • 35 percent for the General Revenue Fund

A Cannabis Cultivation Privilege Tax of 0.7 percent is also imposed on the gross receipts of cannabis sold by craft growers and cultivators to dispensaries.