Illinois officially earns more tax revenue from weeds than alcohol
Illinois’ legal weed industry now makes more money for the state than the long-established alcohol market, according to new tax records.
The Prairie State legal weed industry only opened its doors last January, but has since grown exponentially, even amid a global pandemic and recession. The legal pot traders set new sales records month after month and ended up selling weeds worth an impressive $ 670 million late last year.
The trend towards record-breaking sales will continue through 2021. That January, legal weed shops sold $ 88.8 million worth of legal weed, more than any month in 2020. In March, the state broke that record with nearly $ 110 million in adult sales. Those record-breaking months brought the state $ 86,537,000 in legal weed tax revenue, surpassing the $ 72,281,000 raised from liquor sales over the same period.
This marks the first time in state history that weed tax revenues dwarf alcohol tax revenues, but it probably won’t be the last. Last year, the Treasury Department levied $ 205.4 million in weed taxes, making it the fourth largest pot tax earner in the entire United States. If demand continues to grow as fast as it has before, Illinois is projected to have over $ 1 billion in adult weed sales in 2021, which will add even more to that tax figure.
While some adult-consuming states are using cannabis tax revenues to recover from the economic damage caused by the pandemic, Illinois is investing its weed taxes in communities ravaged by the war on drugs. Last summer, the state used $ 31.5 million in pot taxes to fund its Restoration, Reinvestment and Renewal Program, which provides legal aid and youth development programs to low-income communities.
Last fall, the state used more of its pot tax revenue to start New Leaf Illinois, a legal assistance program to help people with previous convictions clear their criminal records. Individual cities in Illinois also use weed taxes to promote social justice. Just last month, the City of Evanston allocated $ 400,000 in pot tax revenues to fund a program that provides eligible black households with housing grants.
Overall, U.S. states with legal weeds raised over $ 3 billion in cannabis taxes for medical purposes and for adults last year, up 58 percent from 2019. That number is expected to continue to grow in 2021 as existing markets mature and Vermont and New Jersey could start selling adult weed this year as well. Over the next three years, New York, Montana, New Mexico, and Virginia also plan to start adult sales and collect their own statutory weed tax revenues.