Northern Windfall: Wisconsin residents spend millions on pot in Illinois

For the state of Illinois, a thank you to its neighbors to the north might be in order. A newly released analysis says Illinois raked in millions of dollars in tax revenue from Wisconsin residents who crossed the border to buy legal marijuana.

The two Great Lakes states border each other — Wisconsin borders Illinois to the north — but they have very different cannabis laws.

Illinois legalized recreational marijuana in 2019 and a state-sanctioned adult-use market that launched in early 2020. The state also legalized medicinal cannabis in 2013.

Wisconsin, meanwhile, is one of the last remaining states where both recreational and medical marijuana are still illegal.

Wisconsin Democrats are determined to change that — including a lawmaker who released an analysis last week showing the state is losing millions of dollars in potential tax revenues to Illinois.

The Wisconsin Legislative Fiscal Bureau report “estimated that $36.1 million of Illinois’ cannabis tax revenue in fiscal year 2022 was attributable to the sale of cannabis to Wisconsin residents.”

The analysis “assumes that all sales to out-of-state residents in counties contiguous to Wisconsin were to Wisconsin residents, accounting for an estimated 7.8% of total Illinois-related cannabis tax revenue,” the statement reads Report “Sales made in counties contiguous to Wisconsin, $121.2 million, or 50.6% of those sales were to out-of-state residents.”

“Compared to statewide marijuana sales, approximately 7.8% of total cannabis sales revenue in Illinois came from sales to out-of-state residents in counties adjacent to Wisconsin in calendar year 2022,” the analysis said.

The report came at the request of Democratic state Senator Melissa Agard, who has campaigned for years on marijuana legalization proposals in the Wisconsin legislature.

Agard, the state Senate Democrat leader, expressed frustration with the results.

“It should upset every Wisconsin resident that our hard-earned tax dollars are pouring across the border into Illinois. This is revenue that could benefit Wisconsin’s public schools, transportation infrastructure and public safety. Instead, Illinois is benefiting from Republican obstruction and their prohibitionist stance on marijuana legalization,” Agard said in a statement last week.

Republicans hold the majority in both houses of the Wisconsin legislature, as they have for more than a decade, which has reduced the chances of legalization.

Wisconsin Democrats like Agard and the state’s Gov. Tony Evers overwhelmingly support an end to the ban.

“Republicans’ continued refusal to legalize marijuana is fiscally irresponsible. Wisconsinits paid more than $31 million in taxes alone to Illinois in 2022. Wisconsin’s potential revenue loss is even greater when we include taxes paid to Michigan and, in the near future, Minnesota. Wisconsin is losing significant tax dollars that could be used to make our communities stronger, safer and healthier,” Agard said in the statement.

“We are an island of prohibition and the people of our state are suffering as a result. As seen in our neighboring states, legalizing marijuana for responsible adult use will generate significant revenue for our high streets, safely regulate the existing illicit market, reinvest in our agriculture and agricultural heritage, support entrepreneurship and the massive and outrageous Addressing racial differences through marijuana prohibition,” Agard continued.

“The fundamental aspect of our work as legislators is to listen to the people we represent. The people of Wisconsin have urged lawmakers to take sensible actions that move our state forward. We know that legalizing cannabis for responsible adult use is very popular with Wisconsinians, including the majority of Republicans.”