First month of recreational cannabis sales in Illinois surge to almost $40 million


January was a successful month for the adult-use cannabis market in Illinois, with dispensaries selling over $1 million worth of products every single day. This amounted to almost $40 million in recreational cannabis sales revenue in Illinois, where the market launched on New Year’s Day.

Illinois was the 11th U.S. state to legalize recreational cannabis. During the first official month of sales, dispensaries pulled in a total of $39,247,840.83. Of that amount, more than $8 million came from customers visiting from other states.

The state which is home to approximately 13 million people generated fewer sales than it was capable of, due to supply constraints; just one week after sales kicked off, suppliers reported that stock was running low. 

High taxes attributed to impressive adult-use cannabis sales in Illinois

One of the major drivers pushing January’s figures for recreational cannabis sales in Illinois towards the $40 million mark is the extortionate tax rate. With tax rates exceeding 40 percent not including the seven percent state wholesale tax Illinois has the second-highest tax rate in the U.S. adult-use market. Currently, as of February 2020, 11 U.S. states have legalized cannabis for recreational purposes.

Despite the high tax rates imposed on adult-use cannabis sales in Illinois, lawmakers feel hopeful about the industry’s future. Governor J. B. Pritzker’s senior advisor for cannabis control, Toi Hutchinson, believes that the industry will continue to benefit residents in disproportionately-impacted communities who wish to become “cannapreneurs”.

“The successful launch of the Illinois legal cannabis industry represents new opportunities for entrepreneurs and the very communities that have historically been harmed by the failed war on drugs,” Hutchinson in a recent press release.

In December, Gov. Pritzker excused 11,000 low-level cannabis convictions for residents in the state of Illinois, where individuals who have been negatively impacted by cannabis prohibition can participate as part of the Social Equity program.

Product shortages present an ongoing issue for Illinois’ cannabis market

While $40 million is an impressive figure for the first month of legal adult-use cannabis sales in Illinois, numbers could be higher if supply predicaments are straightened out. However, things don’t look too good; a study of Illinois’ legal weed market was commissioned by lawmakers last year, revealing that cannabis supply issues in Illinois could continue for more than a year. 

In an attempt to overcome stock shortages, some stores are believed to be sourcing more than 40 percent of their recreational cannabis products from a single cultivator. Since it is illegal to do this, adult-use dispensary owners have been warned that they could be slapped with citations and fines to the amount of $20,000; should they fail to rectify their violations.

“Some adult use dispensaries have inventory from a single cultivator center entity in excess of the 40 percent limit mandated by [state law],” reads an excerpt from a letter sent to dispensaries by the Illinois Department of Financial and Professional Regulation

Moreover, dispensaries are being informed to serve patients with medical cannabis which was legalized in August 2013 as a priority over social consumers. By law, cannabis dispensaries in Illinois are required to maintain a 30-day supply to fulfil patient demand. In July 2019, 76,939 people had enrolled in the program; based on data published by the Marijuana Policy Project (MPP).

The post First month of recreational cannabis sales in Illinois surge to almost $40 million appeared first on Cannabis News Box.