Written By: Larry Mishkin
A few years ago, when I would attend marijuana conferences around the country, everyone with whom I spoke always seemed ready to talk business opportunities until they heard I was from Illinois. After that, talk quickly turned away from anything cannabis to Al Capone, Michael Jordan, the Cubs, whatever. This was not very surprising given the well documented struggles of Illinois’s medical marijuana market which topped out at about 45,000 patients out of a pool of almost 350,000 state residents who qualified for “patient” status.
The Overwhelming Success of Illinois’s Adult Use Marijuana Market
Everyone would tell me, “just wait for adult use” or “call me when there is a viable market.” Well, lately, my phone is ringing off the hook and all of these “call me” contacts are calling me. What changed? The overwhelming success of Illinois’s adult use marijuana market which launched on January 1st this year.
Interestingly, the market is currently operating with fewer dispensaries than allowed by law (53 adult use dispensaries out of a possible 104 available to current medical license holders) and a very limited supply of product (while waiting for the adult use cultivators who hold medical licenses to get their adult use cultivation centers constructed and fully operational). As a result, those dispensaries that are open are forced to operate on limited hours due to a shortage of product. In addition, Illinois was in lockdown for the end of March and all of April. Nevertheless, in the first four months of the program sales totaled almost $147.2 million with the state recognizing over $40 million in tax revenue (based on an excise tax between 10 – 25% depending on product potency).
Marijuana Declared Essential
In May, with the state still locked down, sales totaled $44.3 million, a single month record. Just as impressive is the fact that twenty five percent of the May adult use revenue came from sales to out of state residents. Illinois’s geographical location of being bordered by five states, none of whom have an adult use market, has long been expected to provide a boost to the Illinois market and now those projections are coming true, even during a lockdown. While credit should be given to Gov. Pritzker for declaring marijuana to be an “essential” item thereby allowing the dispensaries (adult use and medical) to remain open, there is no escaping the fact that the Illinois market is finally showing its true colors and establishing this state as a major player in the adult use industry.
With the adult use market so strong in this state under current circumstances, one can easily imagine that once the lockdowns end, the medical license holders get up and running on the adult use side, the 75 pending adult use dispensary licenses are awarded and start operating and the 40 pending craft grow licenses are awarded and start contributing to a larger statewide supply, the Illinois market could produce sales numbers superior to every state except California (it IS the 5th largest economy in the world).
That’s a big difference in just a few years.