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Higher than expected: Illinois' $52.8M take from weed sales double what state projected

Ally Marotti, Chicago Tribune on

Published in Business News

Illinois collected almost $52.8 million in tax revenue during the first six months of recreational marijuana sales, marking a bright spot among the state's pandemic-scarred finances.

The figure nearly doubled Gov. J.B. Pritzker's budget estimates, which predicted the state would collect $28 million in cannabis tax revenue before June 30.

Recreational marijuana sales have continued to rise throughout the pandemic, while many other retailers saw sales drop off. Dispensaries set a monthly record in June, when they sold $47.6 million worth of recreational pot.

Total recreational marijuana sales in the first six months have topped $239.1 million.

Of the $52.8 million in tax revenue, the state collected about $34.7 million in cannabis excise taxes and $18 million in sales taxes, according to a news release from Pritzker's office. The sales tax revenue will be shared with local governments.

The state expects $25.9 million to go into its general fund, which pays for most day-to-day operations, and a portion is set to be reinvested into communities hit hard by the war on drugs.

The state's coffers needed the new flow of marijuana tax revenue. Illinois' general fund revenues ended the fiscal year June 30 with $1.1 billion less than last year, according to June's monthly briefing from the Commission on Government Forecasting and Accountability.

 

COVID-19 hit the state's three main tax revenue sources -- personal income, corporate income and sales taxes -- hard, according to the report. Less lucrative taxes, like cigarette and insurance taxes, also suffered.

Marijuana taxes vary by product and by the concentration of THC, the ingredient that gets users high, which is displayed on the packaging. Marijuana-infused products are taxed at 20%. All other marijuana with 35% THC or less is taxed at 10%, and marijuana with THC content higher than 35% is taxed at 25%.

That's in addition to standard state and local sales taxes. Municipalities also can collect up to 3% in marijuana taxes. Many, including Cook County, have decided to do so.

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