First-Month Marijuana Sales Generate $10.5 Million In Tax Revenue

CHICAGO — The first month of recreational marijuana sales in Illinois generated more than $10 million in tax revenue, the Illinois Department of Revenue announced Monday. According to the agency, the state is on track to surpass a conservative cannabis tax revenue estimate for the first half of 2020 that Gov. JB Pritzker's administration included in its recently released budget.

Earlier this month, state regulators said non-medical consumers purchased more than $39 million worth of cannabis product in January. More than 972,000 items were sold. And shoppers from outside Illinois spent more than $8.6 million, according to the Illinois Department of Financial and Professional Regulation, which issued the 50th license to sell recreational marijuana on Feb. 14.

More than $7.3 million of the first month of cannabis tax revenue came from cannabis-specific taxes, which include a consumer tax rate that varies depending on THC potency as well as a 7 percent wholesale tax when cultivators sell to dispensaries.

The other nearly $3.15 million in revenue was generated by standard retail sales taxes. That money gets divided up between the state's general fund and the local governments of the communities where the money was spent, according to state tax collectors.

"Today marks another milestone in the successful launch of Illinois' legal cannabis industry," Pritzker's senior cannabis adviser Toi Hutchinson said in a release. "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."

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Under the Cannabis Regulation and Tax Act, 45 percent of adult-use cannabis tax revenue, after administrative fees are set aside, will be reinvested in places most harmed by cannabis prohibition. Co-sponsored by Hutchinson, a former state senator, the bill was the nation's first legislatively initiated retail marijuana legalization scheme.

"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," said the Olympia Fields Democrat.

The first month of tax revenue does not include the local cannabis retailer taxes, which can be up to 3 percent for incorporated municipalities with home rule authorities and 3.75 percent in unincorporated areas.

If local governments choose to permit recreational weed sales in town and pass an ordinance establishing the local tax prior to April 1, the state will begin enforcing and collecting the tax on July 1, 2020. As the only home rule county in the state, Cook County has also implemented its own 3 percent cannabis tax. That means cannabis customers in Chicago are set to pay sales tax rates of up to about 41 percent in the second half of the year.