Photo: Charles Rex Arbogast | AP
Cannabis sales in Illinois are booming, but the taxes the state takes in won’t fix Illinois’ financial challenges, the latest figures show.
Depending on the potency of the product, it can have taxes of 40 percent or more. Since the adult-use program began in Illinois, dispensaries have sold more than $431 million worth of cannabis products. The state has taken in more than $106 million in revenue.
That may sound like a lot of revenue, but with a state budget of more than $40 billion, it’s a “drop in the bucket,” said Nick Niforatos, executive vice president of Smart Approaches to Marijuana.
“When you look at the legislation they passed last year to legalize marijuana recreationally the money does go kind of all over the place, and so you’re taking a very small number and really making it even smaller by putting into some of these programs,” Niforatos said.
Thirty-five percent of the revenue, or around $35 million so far, is earmarked for general state spending. Despite that, the state’s budget still has a $6 billion hole.
“So when we’re talking about $5 billion in borrowing versus a $100 million, cannabis is not going to make up much of our budget at all, unfortunately,” said state Rep. Joe Sosnowski, R-Rockford.
Ten percent of the revenue, or around $10 million, will go to the state’s backlog of bills, which as of Friday was $8.4 billion.
A quarter of the goes to a new program with grants for nonprofit community groups in certain areas, 20 percent for substance abuse and mental health services, eight percent for local law enforcement and two percent for public cannabis education and safety campaigns.
Niforatos said the way the state has managed the cannabis business licensing has been a “disaster.”
“Yes the industry is making a bunch of money and all these investors who are overwhelmingly white and already millionaires are making a lot of money but minority communities have kind of been kicked to the curb and the tax revenues have been extremely disappointing,” Niforatos said.
There are 56 cannabis dispensaries, most were already in place under the medical program that started years ago.