The first half of 2020 has been brutal. After being discovered in Wuhan, China in late 2019, the coronavirus quickly spread to Europe and the U.S., and by late March, billions of people across the world were under lockdown. All but the most essential businesses were ordered to shut down, and within a month, the U.S. was approaching Great Depression era levels of unemployment. The travel and service industries were especially hit, and they have shouldered most of the job losses.
One industry that seems to be weathering the health and economic crisis fairly well is cannabis. Deemed essential by most states with a legal cannabis program, the industry has continued operations amidst the lockdown orders, all the while posting record profits. Illinois, for instance, has collected almost $52.8 million in tax revenue over the past six months, more than double what Illinois Governor J.B. Pritzker originally predicted.
He predicted that the state would collect $28 million in cannabis tax revenue before June 30, but Illinois has seen rising recreational marijuana sales. In June alone, dispensaries sold a record $47.6 million worth of recreational cannabis, all while the state’s economy declines due to the coronavirus. Over the first six months of 2020, total recreational marijuana sales in Illinois topped $239.1 million, all while the state’s finances were stretched thin by the ongoing pandemic.
Of the $52.8 million collected by the taxman from cannabis sales, $34.7 million was from cannabis excise tax while $18 million was from tax on sales. The state intends to direct $25.9 million to a general fund which pays for most day-to-day operations while a portion of the remaining tax revenue will be reinvested in communities that were disproportionately affected by the war on drugs.
According to June’s briefing from the Commission on Government Forecasting and Accountability, Illinois’ general fund revenues ended the fiscal year with $1.1 billion less than last year. The Commission’s report states that the coronavirus crisis has hit three main tax revenue sources, personal income, corporate income and sales tax. Even the less lucrative taxes like cigarette and insurance taxes also suffered, so cannabis provided a much needed inflow of cash.
The trend has been similar in most states that allow cannabis. Cash flows from most industries have pretty much dried up, but cannabis has consistently brought in tax revenue, with states like Illinois making monthly sales records.
This news from Illinois is likely to be celebrated by the entire cannabis industry, including companies like Sugarmade, Inc. (OTCQB: SGMD), since it justifies what the industry has always said about the economic benefits of establishing regulated marijuana markets.
CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of two informative articles each business day. Our concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. Articles are released each business day at 4:20 a.m. and 4:20 p.m. Eastern – our tribute to the time synonymous with cannabis culture. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.
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