The Illinois Department of Revenue (IDR) has announced the revenue totals for the first month of adult-use cannabis sales in the state.
Legal sales of adult-use cannabis commenced in Illinois on Wednesday, January 1, 2020.
According to IDR, adult-use cannabis sales generated $7,332,058 in cannabis tax revenue during January, as well as an additional $3,147,928.29 in retail sales tax revenue.
Earlier in February, the Illinois Department of Financial and Professional Regulations announced that retailers had sold nearly $40 million worth of cannabis products (972,045 items) in the first month of legal cannabis sales.
Estimates from Governor J.B Pritzker’s latest budget put cannabis tax revenue from the remainder of the fiscal year, ending June 13, 2020, at somewhere around $28 million.
IDR estimates that the state will surpass estimates, provided that adult-use cannabis sales remain steady over the next few months.
“Today marks another milestone in the successful launch of Illinois’ legal cannabis industry,” said Senior Advisor to Governor Pritzker for Cannabis Control Toi Hutchinson. “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.”
Illinois collects a portion of cannabis revenue through a variable excise rate that is dependent on the type of cannabis product as well as its potency.
Additional revenue comes from a 7 percent cultivator excise tax that is imposed when retailers purchase cannabis to sell.
Revenues are expected to increase to $127 million in Fiscal Year 2021, $46 million of which will be routed to General Funds.
Minus administrative costs, 35 percent of state revenue is allocated for the General Revenue Fund, 25 percent is for criminal justice information projects to support the R3 program, 20 percent is for the Department of Human Services Community Services Fund to address substance abuse problems and mental health issues, and 10 percent is for the Budget Stabilization Fund to pay a backlog of unpaid bills.
Eight percent of revenue will go toward the Local Government Distributive Fund to support crime prevention programs, and two percent is designated for the Drug Treatment Fund for public education campaigns and analysis of the public health impacts of legalizing adult-use cannabis.