The Illinois Department of Revenue has revealed that the Buckeye State generated over $2 billion in legal cannabis sales and almost $500m in tax revenue last year. Illinois legalized recreational cannabis use on January 1, 2020, becoming the 11th state to allow adult-use cannabis and the first state to legalize the controversial drug via a state legislature instead of a ballot initiative.
Recreational cannabis operators in Illinois earned $1.72 billion in total last year, with over $153 million worth of sales occurring in December. Medical marijuana sales for the year 2024, on the other hand, reached $285 million. Illinois earned $473.8 million from taxing recreational cannabis sales, while medical cannabis sales earned the state $16.3 million in tax.
Illinois’ cannabis regulation oversight officer Erin Johnson says that the increasing number of dispensaries boosted competition, increased product availability, and allowed for better consumer prices. State records show that cannabis consumers in Illinois bought over 56.3 million marijuana items through 2024. 49 million items consisted of recreational cannabis products while nearly 7.3 million items were purchased by medical marijuana patients.
Recreational cannabis sales comprised the majority of statewide cannabis sales for 2024 at 77.6%. However, the number of consumers from neighboring states will decline over the next few years as more states move to legalize marijuana. Even so, Illinois has more than enough domestic demand for cannabis.
The state currently has 244 licensed recreational marijuana dispensaries while over 100 applicants are trying to gain retail licenses. And like many other U.S. states with regulated cannabis markets, the licensed retailers are being undercut by black market sellers. These illicit retailers aren’t subject to the taxes, fees, and requirements that typically make legal cannabis expensive, allowing them to sell their products at much lower price points.
Regulated sellers have been pressuring regulators to crack down on unregulated hemp-infused products that are sold at numerous vape and tobacco shops across Illinois. In states with somewhat mature cannabis markets like California and Colorado, state-sanctioned cannabis operators lose tens of millions of dollars to the black market annually.
Illinois Governor JB Pritzker has verbalized his support using legislative action to curb black market sales. Pritzker notes that while he is pleased with the state’s legal cannabis sales, the unregulated hemp market is undermining and undercutting licensed cannabis businesses.
Unlike illicit sellers, these firms pay steep taxes, comply with cannabis regulations, and put their products through rigorous testing. Black market sellers also risk consumers’ health by flooding the cannabis market with potentially unsafe products.
This boom in cannabis sales registered in Illinois will likely be celebrated by the entire marijuana industry, including companies like Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) since any success registered by any legal market is a win for all.
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