Legal-weed taxes take revenue estimate higher
State clears $10M in first month, running well ahead of projected $28M for first half-year
Tax revenues for recreational cannabis are already exceeding projections. (Shutterstock)
By Ted Cox
Illinois cleared more than $10 million in tax revenue from legalized marijuana just in the first month, according to figures released Monday, putting the state well ahead of its projected pace of $28 million in pot taxes by the end of June.
The Illinois Department of Revenue released figures showing that the state made $7.3 million in cannabis-tax revenue alone in January, the first month of legalization, when the state made a total of $39.2 million in recreational sales. It added that Gov. Pritzker’s budget had projected $28 million in pot taxes for the first half-year, ending with the completion of the fiscal year at the end of June. “Today's announcement puts the state on track to surpass that estimate,” according to a department news release.
In addition, the state raked in $3.1 million from the more mundane retail sales tax in the first month of legal-weed sales, for a total revenue boost of $10.4 million.
"Today marks another milestone in the successful launch of Illinois's legal cannabis industry,” said Toi Hutchinson, the former state senator who now serves as Pritzker’s senior adviser for cannabis control. “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. 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.”
“Today marks another milestone in the successful launch of Illinois's legal cannabis industry.”
Illinois cannabis czarina Toi Hutchinson (One Illinois/Ted Cox)
Minus administrative fees, “45 percent of the adult-use cannabis tax revenue will be reinvested in communities disproportionately impacted by the failed war on drugs and used to fund substance-abuse and mental-health programs,” according to the Revenue Department. “The $3,147,928.29 in sales-tax revenue will be divided between the state's general revenue fund and the local governments where purchases were made.”
The state taxes legal cannabis based on potency of the consumer product, as well as a 7 percent cultivators’ excise tax imposed on wholesale transactions with dispensaries.
In his annual budget address last week, Pritzker projected $28 million in cannabis-tax revenue in the first six months of the year. Next year’s budget projects $127 million in overall tax revenue from pot sales, with $46 million going into the general fund, and the state would already appear to be on pace to meet if not top that.