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420 with CNW – More Illinois Residents Opt for Medical Marijuana to Dodge High Taxes

To get more states to legalize marijuana, the cannabis community has been convincing the people as well as the leaders by estimating the amount of tax revenue states could generate from the sale of legal weed. And from the look of things, lawmakers are starting to heed their cries as more and more states move to legalize either medical or recreational marijuana, or even both. However, the tax imposed on marijuana sales is too high in some states such that consumers are opting to buy weed from the black market where it is affordable. For Illinois residents, the better option now seems to be legal medical marijuana which is taxed at a lower rate.

Recreational marijuana sales were launched at the beginning of the year in Illinois, and customers have gotten a sticker shock after seeing some of the highest marijuana sales taxes in the U.S. Some cannabis consumers have sworn to stick to the black market until the legal markets offer them affordable prices. However, some of the consumers have devised a way to avoid the high taxes by joining the state’s medical marijuana program, where taxes are much lower.

Local media outlets reported that since the beginning of January, more than 2,600 people have applied for medical marijuana cards. This represents a 34% increase in the total number that applied for medical marijuana cards in the first two weeks of December 2019. The report further said that the rise could be attributed to people wanting to participate in the legal marijuana system.

Most of the marijuana consumers are opposed to the high tax rates in the adult-use sector; thus, the reason they are opting to join the medical side. Additionally, since the products sold in the recreational and medical markets are the same, customers do not have to queue for long to be served when buying medical cannabis as is the case when buying recreational weed.

The Illinois tax system is complex, and the marijuana sales tax rates are high. The growers within the state of Illinois are expected to pay a 7% tax and a series of additional excise taxes depending on the type of product. Customers are also expected to pay fees depending on the type of product and potency. The fees imposed are as follows; for the consumer’s buds 10%, edibles 20%, and any products whose THC is 35% or more 25%, as well as additional state and local taxes.

Overall, the customers are expected to pay a 41% tax. The tax rate has forced many customers to turn to the illicit market. Ironically, instead of people turning to the legal market after the legalization of marijuana, most are buying from the black market.

However, for people to be issued with medical marijuana cards, they need to get a doctor’s certification saying that they have one or several of the illnesses in the qualifying conditions list, such as Alzheimer’s, and cancer as well as pain issues. The patient also has to pay an application fee of $100 to $250 so that they can start purchasing medical marijuana once their card arrives. Medical marijuana purchases are taxed at 1%.

Soon, the state of Illinois will have to consider reviewing its tax system as more and more people are securing medical marijuana cards to escape the high tax rates in the recreational market.

Experts believe that cannabis companies, such as Willow Biosciences Inc. (TSX: WLLW) (OTCQB: CANSF), would like to see states tax marijuana sales in a way that doesn’t make the products too expensive for consumers. A review of the tax regime in Illinois may therefore be warranted so that the black market isn’t inadvertently given a shot in the arm.

About CNW420

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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