Illinois’ legal marijuana industry experienced “unprecedented” growth in fiscal year 2023. The state’s Department of Financial and Professional Regulation reported that 28 new retail outlets were opened and sales of more than $1.5 Billion in total retail sales.
The total tax revenue for the industry fell in fiscal year 2023. It dropped to $420.9 from $435.1 million, a record.
According to separate Department of Revenue numbers, the legal cannabis sector brought in $451.9 millions for the state during fiscal year 2023. This period ran from July 1, 2020 to June 30, 2023. In the past, Illinois has made more money from cannabis than alcohol. This was about $316.3 millions during that time period.
The new report states that “Fiscal year 2023 saw an unprecedented growth in cannabis market, not seen since 2015 when the medical cannabis program was launched and in 2020 adult use cannabis became legal.” IDFPR expects that the market will continue to grow in the coming years, including Fiscal Year 2024.
Illinois Department of Financial and Professional Regulation
Over the course of the fiscal year, 200 licenses with conditions were granted. The department finalized the rules for the Social Equity Criteria Lottery in December 2022. This lottery is aimed at giving priority to people who are disproportionately affected by the drug war. Over 2,600 people applied for 55 social equity dispensary licences.
Cook County is the most populous county in the state.
Illinois Department of Financial and Professional Regulation
The agency reported that 28 new retailers opened in the state over the course of the fiscal year. These “ownership groups” are said to be independent from the existing medical cannabis dispensaries and the same-site dispensaries.
The report from last year noted that there was a shocking lack of diversity within Illinois’s legal marijuana industry. White people made up 88 percent majority owners, and 80 percent C-suite executives. The new report for 2023 does not have the same breakdown of demographics, but it touts an “increased level of diversity in dispensary ownership and employment as well as products offered”.
The state claims that veterans owned the majority of all 28 newly opened retail stores. According to self-reporting, five of these licenses were also majority owned and controlled by women.
The IDFPR report states that “with this new grouping of dispensaries, over 50% of the majority owners are people of color while almost 20% of them are women.”
The report states that, despite the fact that social equity retailers have only been in operation for a small fraction of a year (the first two licenses were issued on November 10th, 2022), they still generated $57,647.366.56 worth of sales during the FY2023.
Among employees, 26 percent identified as people of color, 48 percent identified as women or nonbinary, and 9 percent of employees identified as disabled, according to IDFPR, which cited an ongoing state diversity <a href="https://cannabis.illinois.gov/research-and-data/diversity-survey.html#:~:text=On%20May%203%2C%202023%2C%20the,page%20to%20request%20a%20link. The Cannabis Regulation Oversight Officer launched a survey in May.
According to the report, the total number of marijuana products that will be sold in fiscal 2023 is expected to increase as well, reaching nearly 45 millions. The report states that most product categories experienced growth. Infused liquids and topicals were the exceptions.
A quarter of cannabis sales were made to residents from outside the state. The report states that “this is not a market on which the industry should depend, but rather a piece of it.”
Illinois Department of Financial and Professional Regulation
IDFPR stated that it plans to issue 55 licenses for social equity in fiscal year 2024. It also intends to hire and onboard 8 new inspectors and processers “to reduce the time required to license businesses and individuals” and to increase public outreach. According to the report, IDFPR also plans to implement a new tracking program from seed to sale.
It said: “IDFPR is ready to continue granting dispensary licences, and is committed in promoting social equality, safety and growth within the regulated cannabis industry.”
DOR was required by law to include any recommendations to change the state tax rates on adult-use marijuana in its annual report, but chose not to. The report states that “the Department believes at this time the program is too young to make meaningful recommendations on tax rates.”
Illinois taxes cannabis products at a 20 percent rate, and the tax rate increases based on product potency. If local governments add an extra 3 percent tax, the effective rates can reach 40 percent.
According to state sales data recently released, retailers have sold adult-use cannabis products worth a record of $140 million in August. In September, the state broke its own record for individual products sold in the adult-use cannabis market. However, total sales were only $139.5 millions.
Gov. J.B. Pritzker highlighted the growth of the industry and the strong sales numbers in the last month while downplaying Illinois’s relatively high retail prices. Illinois, according to an Illinois Policy Institute analysis, is the third largest retail marijuana market in the United States after Michigan and California.
Pritzker said to The Center Square, “We have a growing sector, which, as you may know, I started in 2019. It has generated almost $450 millions for state and local governments.” “We want all industries to grow.”
Pritzker who backed legalization in the State, signed a recent bill that allows licensed marijuana businesses to take state tax deductions. This is a partial fix for Internal Revenue Service (IRS), tax code 280E.
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Photo by Philip Steffan.
The article Illinois Officials Highlight the ‘Unprecedented growth’ of legal marijuana market as Cannabis Revenue Exceeds Alcohol first appeared on Marijuana moment.
