Eye On Illinois: Marijuana business booming as state issues 149 new licenses

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On this day in 1937, President Franklin D. Roosevelt signed the Marihuana Tax Act, the culmination of a notorious anti-cannabis campaign from Harry Anslinger, founding commissioner of the Federal Bureau of Narcotics.

Anslinger’s racism and propagandist techniques are tentpoles of the country’s decades-long war on drugs, subjects well-suited for in-depth research beyond the scope of a daily newspaper column. But the anniversary of the law – overturned in 1969 – gives occasion to look at the staggering statistics of recreational marijuana sales in Illinois.

The Department of Financial and Professional Regulation keeps a table of monthly figures since sales became legal in January 2020. Now 30 months into the program, it appears this industry is indeed the cash cow proponents predicted, even though use and possession remains illegal under the 1970 Controlled Substances Act.

While December 2021 remains the busiest month in terms of items sold – 3,180,944 – the only other months to clear 3 million are the four most recent. From March 1 through June 30, legal sales totaled 12,177,883 units. Customers are on pace to buy about 4.5 million more items than in 2021 with annual sales likely to exceed $1 billion for the first time.

Last year the state missed that mark by about $37 million. This year’s pace would clear it by $37 million. And although the percentage of sales dollars attributed to out-of-state residents is down somewhat from last year, it still sits at nearly 30%. In raw dollars that’s $635,695 per day, or more than $232 million on the year. Illinoisans may cross the border to buy gas and fireworks, but marijuana is clearly part of the economic tradeoff.

The state fiscal year ends June 30. Calculating those 12 months shows $445 million in taxes on about $1.5 billion in sales. Local governments collected $83 million on recreational marijuana sales in the fiscal year ending June 30, 2021, and a whopping $146 million in the one ending June 30, 2022.

These numbers should continue to increase. On July 22, the state issued 149 additional dispensary licenses. All are conditional licenses awarded following three applicant lotteries last summer, with each recipient qualifying as a “social equity applicant,” as Gov. JB Pritzker’s administration attempts to engineer a program ensuring racial minorities aren’t excluded.

That’s not been the case so far, but the new licenses more than double the overall marketplace, or at least they will once everyone develops physical locations. It’s not hard to find applicants who lost serious money while the state bungled its rollout, and many industry observers have concerns about corporate consolidation and home grow limitations.

Anslinger wouldn’t recognize the modern marketplace. In a few years, Illinois’ status quo also might appear a distant memory.

Scott T. Holland writes about state government issues for Shaw Media. Follow him on Twitter @sth749. He can be reached at sholland@shawmedia.com.

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August 2, 2022 at 05:23AM

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