We already knew that Illinois’ cannabis industry saw massive sales during its first month in action — $39,247,840.83 worth of product sold, to be exact. But now the state’s Department of Revenue has released its figures on taxes, and it’s official that Illinois is also experiencing a windfall; $7.3 million in tax revenue from January cannabis sales alone.
That blows the state’s estimates out of the water. Last week, Governor J.B. Pritzker’s office released figures forecasting the equivalent of $4.67 million a month in state cannabis revenues.
Pritzker’s cannabis advisor Toi Hutchinson hyped the revenue’s role in reversing injustices wrought by cannabis prohibition-related policing.
“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,” Hutchinson said.
With tax rates for the sale of many marijuana-infused products set at 20 percent, Illinois has one of the highest cannabis tax rates in the country.
That money is earmarked for important destinations, though the way that the revenue will be spent varies from jurisdiction to jurisdiction when it comes to local taxes.
In Peoria County, weed taxes will go towards accelerating the expungement of cannabis-related crimes. In the town of Springfield, local officials will send the money collected by local taxes to city fire and police pensions, as well as underwriting development that is planned for the city’s east side.
State marijuana taxes are a different story. That money is funneled into the government’s cannabis regulation fund, and then sent out to a number of areas including the general revenue fund, which gets 35 percent.
Other recipients include the “Restore, Reinvest, and Renew Program”, a restorative justice project that looks to tackle gun violence and poverty that will absorb a quarter of the state’s cannabis tax revenues.
The rest of state taxes will largely be used to fund programs addressing substance abuse and mental health, crime prevention, cannabis education campaigns, and law enforcement training.
Cannabis Had A Booming Start In Illinois
Cannabis was legalized in the state last summer, when legislators passed the Illinois Cannabis Regulation and Tax Act.
On January 1st, the first day of recreational sales alone, customers left cannabis stores with $3.2 million worth of product.
Another factor that may have led to the high sales was the fact that residents from Iowa, Indiana, Kentucky, and Missouri — which have yet to regulate adult use cannabis — had headed into Illinois to buy during the opening weeks of the industry. Illinois is currently the only Mid-West state to regulate adult use cannabis besides Michigan.
The numbers could have been even higher — at the beginning of January, multiple dispensaries reported that consumer demand was so high that they had run out of product, or had to institute limits on the amount of cannabis customers could purchase.
In response, many of the state’s grow facilities are expanding their operations. Increased supply, however, could have the effect of decreasing tax revenues as cannabis retail prices drop.