The new legal adult-use marijuana industry in Illinois generated $10.5 million in tax revenue during the first month of trading.
There were long lines outside the state’s new legal pot shops when they opened their doors for the first time on January 1. Trading remained brisk throughout the month and dispensaries sold almost $40 million worth of flower and other cannabis products.
Gov. J. B. Pritzker’s office revealed that it will earn $7,332,058 in cannabis tax revenue and $3,147,928.29 in sales tax revenue for January. That puts it on course to smash its projections.
Last week, Pritzker said that Illinois expects to earn $28 million in cannabis tax revenue for the remainder of fiscal year 2020, which ends of June 30. That would equate to $4.67 million per month, but it made more than double that in January, despite a limited number of operational dispensaries and supply shortages.
Around 55% of the $7.3 million earned from the adult-use cannabis tax in January will go towards regulating the industry. The remaining 45% will be reinvested in communities disproportionately impacted by the failed war on drugs and used to fund substance abuse and mental health programs.
The $3.1 million in in sales tax revenue will be divided between the state’s general revenue fund – used to support public services – and the local governments where purchases were made.
“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 Toi Hutchinson, senior advisor to Gov. Pritzker when it comes to cannabis control.
Illinois imposes a 7% tax on gross receipts of any cultivator, and it then charges an excise tax on retail sales of cannabis. That stands at 10% if the THC content is below 35%, and goes up to 25% if the cannabis has a THC level above 35%, while the tax on edibles is 20%.
Total recreational cannabis sales reached $39.2 million in January, of which $8.6 million came from marijuana tourists visiting the state. Nevada was the only state to enjoy a stronger opening month of trading out if the other 10 states to legalize recreational cannabis sales.
The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Grizzle hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.