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Legal cannabis sales in Illinois generate $7.3 million in tax revenue in first month – The Southern

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Harbory Line Wed. Jan 15

Patrons await the opening of recreational marijuana sales at the Harbory in Williamson County just before noon on Jan 15.

SPRINGFIELD — The Illinois Department of Revenue reported Monday that the first month of legalized adult-use cannabis sales in the state generated $7.3 million in cannabis tax revenue for the state, plus another $3.1 million in retail sales taxes that are shared between the state and local governments.

Graduated Tax Hutchinson Harmon

Democratic state Sens. Don Harmon, of Oak Park, and Toi Hutchinson, of Olympia Fields, speak during a May news conference in Springfield.

“Today marks another milestone in the successful launch of Illinois’ legal cannabis industry,” Toi Hutchinson, a senior adviser on cannabis policy to Gov. J.B. Pritzker, said in a statement.

Last year, at Pritzker’s urging, lawmakers passed a bill legalizing the production and sale of adult-use recreational cannabis. The law took effect Jan. 1.

With lines hundreds deep, Southern Illinoisans celebrate legal marijuana sales

Under that law, cannabis cultivators pay a 7% privilege tax on their sales to dispensaries. Retail sales, in turn, are subject to retail sales taxes as well as a special cannabis tax that ranges from 10% to 25%, depending on the type of product being sold and its THC content.

Those taxes are in addition to the retail sales taxes levied by the state and the local governments where the sales occur, but they do not apply to products that are taxed under the state’s medical marijuana program.

Pritzker’s budget office had estimated that cannabis sales would generate $28 million in the final half of the current fiscal year, which ends June 30. The Department of Revenue said Monday’s report showed the state is on pace to surpass that estimate.

Illinois releases recreational pot sales numbers: nearly $40 million in first 31 days

The state’s share of the revenue is divided among several funds:

  • 35% goes to the state general fund;
  • 25% goes into a special fund for community development projects in areas with high arrest and poverty rates that were disproportionately affected by the “war on drugs;”
  • 20% goes to the Department of Human Services for substance abuse and prevention programs and mental health;
  • 10% is put into the Budget Stabilization Fund to pay down the state’s backlog of unpaid bills;
  • 8% goes to local governments to support crime prevention, training and interdiction efforts; and
  • 2% is used to fund public education campaigns and to support data collection and analysis of the public health impacts of legalizing recreational cannabis.

“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,” Hutchinson said in her statement. “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.”

Written by homegrownreview

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