Illinois’ adult-use cannabis industry is successful, but strained by lack of supply

Bethan Rose Jenkins, Cannabis News Writer/Editorial

During the first six months of legal recreational cannabis sales in Illinois, the state managed to harvest $52 million in revenue. While it’s clear that the market has thrived since the Cannabis Regulation and Tax Act was enacted in January, supply concerns are lingering for both the medical and adult-use markets.

Something that has triggered supply problems in recreational avenues is the fact that dispensary owners were restricted from selling cannabis flower/smokable flower until March 13 of this year. Operators were informed about this in a letter sent by the state’s regulatory agency – the Illinois Department of Financial and Professional Regulation – on January 10.

“We need to see data on a regular basis so we can understand what’s actually happening, and we need to see accountability on cultivators. Dispensaries can’t be held accountable if they just can’t get the product,” said State Senator Heather Steans, D-Chicago, who also aired her concerns regarding supply issues for Illinois’ medical cannabis market back in January.

State regulators should have issued more cultivation licenses for cannabis in Illinois

Considering the fact that Illinois has experienced a recent surge in the cannabis demographic, Sen. Steans’ comments are relevant. State regulators may have saved themselves – not to mention consumers and merchants – hassle if they had distributed more licenses among cannabis cultivators prior to the recreational industry’s launch at the start of 2020. 

As of September 2019, 17 medical cannabis cultivators were serving the medical cannabis market in Illinois. With the coronavirus (COVID-19) pandemic delaying the awarding of 75 adult-use licenses in April 2020 – three months after the adult-use industry’s launch – supply has unequivocally been suffocated.

“We have continuously exceeded the state’s requirements to supply product to all dispensaries and, as our capacity increases, we will increase what we supply to all of the dispensaries,” reads an emailed statement from Green Thumb Industries (GTI) — one of a number of vertically-integrated multi-state operators that serve the ever-growing cannabis industry in Illinois. 

Aside from supply limitations and the expense of becoming a cultivator, dispensary owners are also struggling to afford the increasing price of weed. The average per-gram price of weed in Illinois has never dipped below $10; prices actually grew to $14 per gram this year from $11 in May of last year.

Cost further complicates things — craft growers are required to pay a license fee of $30,000 if they are accepted, in addition to a $5,000 application fee.

State regulators are reconsidering software choice to track cannabis supply in Illinois

In an attempt to resolve supply constraints, executive director of the Cannabis Business Association of Illinois, Pam Althoff, revealed to reporters that the state is in the process of reexploring software options to monitor inventory. Advanced inventory systems have been adopted in various other legal states, including Colorado, Massachusetts and Washington.

“We’re looking at the possibility of either upgrading and/or finding a new software vendor with a capacity to put all of this information online out on the web so that everyone – users, patients, interested parties – can actually see in real time how much cannabis is being produced as well as who they’re selling to,” explained Althoff.

Notwithstanding supply woes, cannabis sales in Illinois hit a record high in June, with 994,545 items being sold. Data published by the Illinois Department of Financial and Professional Regulation confirmed that this worked out at approximately $47.6 million worth of transactions. Of that amount, $12.39 million was sold to out-of-state residents.