State

First month’s legal marijuana sales generate $7.3 million in tax revenue

An additional $3.1M comes from sales taxes on adult-use cannabis

Customers wait in line Jan. 2 outside of HCI Alternatives in Springfield to buy marijuana for recreational use. The Illinois Department of Revenue reported Monday that the first month of legalized adult-use cannabis sales in the state generated $7.3 million in cannabis tax revenue for the state, plus another $3.1 million in retail sales taxes that are shared between the state and local governments.
Customers wait in line Jan. 2 outside of HCI Alternatives in Springfield to buy marijuana for recreational use. The Illinois Department of Revenue reported Monday that the first month of legalized adult-use cannabis sales in the state generated $7.3 million in cannabis tax revenue for the state, plus another $3.1 million in retail sales taxes that are shared between the state and local governments.

SPRINGFIELD – The Illinois Department of Revenue reported Monday that the first month of legalized adult-use cannabis sales in the state generated $7.3 million in cannabis tax revenue for the state, plus an additional $3.1 million in retail sales taxes that are shared between the state and local governments.

“Today marks another milestone in the successful launch of Illinois’ legal cannabis industry,” Toi Hutchinson, a senior adviser on cannabis policy to Gov. JB Pritzker, said in a statement.

Last year, at Pritzker’s urging, lawmakers passed a bill legalizing the production and sale of adult-use recreational marijuana. The law took effect Jan. 1.

Under that law, marijuana cultivators pay a 7% privilege tax on their sales to dispensaries. Retail sales, in turn, are subject to retail sales taxes as well as a special cannabis tax that ranges from 10 to 25%, depending on the type of product being sold and its THC content. 

Those taxes are in addition to the retail sales taxes levied by the state and the local governments where the sales occur, but they do not apply to products that are taxed under the state’s medical marijuana program.

Pritzker’s budget office had estimated that marijuana sales would generate $28 million in the final half of the current fiscal year, which ends June 30. The Department of Revenue said Monday’s report showed the state is on pace to surpass that estimate.

The state’s share of the revenue is divided among several funds:

• 35% goes to the state general fund.

• 25% goes into a special fund for community development projects in areas with high arrest and poverty rates that were disproportionately affected by the “war on drugs.”

• 20% goes to the Department of Human Services for substance abuse and prevention programs and mental health.

• 10% is put into the Budget Stabilization Fund to pay down the state’s backlog of unpaid bills.

• 8% goes to local governments to support crime prevention, training and interdiction efforts.

• And 2% is used to fund public education campaigns and to support data collection and analysis of the public health impacts of legalizing recreational marijuana.

“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,” Hutchinson said in her statement.

“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.”

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