United StatesIllinois

State collects $52 million from recreational cannabis sales in first half of 2020

In this Tuesday, Jan. 14, 2020, photo, cannabis flowers hang in a drying room at Revolution Global’s cannabis cultivation center in Delavan, Ill. 

(The Center Square) – The state collected $52 million in the first six months of the year from taxes on recreational cannabis sales, but Gov. J.B. Pritzker said the COVID-19 pandemic delayed a key aspect of Illinois cannabis law designed to give minorities a bigger stake in the industry.

Social equity applicants were set to get cannabis business licenses on May 1, but that was pushed back as the state focused on reducing the spread of COVID-19.

“The result of that has been a massive interruption of what we intend to have happened here,” Pritzker said during a news conference Wednesday. “Now, no new licenses are given until these social equity licenses are given, so we want to make sure that we’re getting accomplished as fast as possible, the people of color having the opportunity to enter this industry – to own, to work – in this industry.”

Pritzker said that over the next six weeks or so he believes there will be progress made toward granting licenses to social equity applicants.

“It’s an absolute goal of ours,” he said.

Since Jan. 1, when legal recreational cannabis sales began in Illinois, the state has brought in $52 million from taxes on the sale of adult-use cannabis and an additional $34.7 million from excise taxes. Pritzker said that was nearly double what the state had initially projected.

“Illinois has done more to put justice and equity at the forefront of this industry than any other state in the nation, and we’re ensuring that communities that have been hurt by the war on drugs have the opportunity to participate,” Gov. J.B. Pritzker said in a statement on Tuesday. “Since January, over $239 million has been spent on recreational cannabis in Illinois translating to $52 million in tax revenue.”

In addition to excise taxes, the Illinois Department of Revenue collected $18 million in sales taxes that will be shared with local governments. In total, the department estimates $25.9 million will be directed to the state’s General Fund from sales and excise taxes.

The state adult-use cannabis law directs 25% of revenues collected from recreational cannabis sales to be either reinvested through the Restore, Reinvest and Renew Program in communities that have been disproportionately affected by the war on drugs by the justice system, used to address substance abuse and prevention and mental health concerns, or sent to local governments for crime prevention programs.

The Restore, Reinvest and Renew Program recently announced $31.5 million in grants available to organizations in underserved communities. The Restore, Reinvest and Renew Program will allocate 25 percent of the state’s cannabis tax revenue to areas identified as hard-hit by drug problems. Local governments, nonprofit organizations, businesses and other community associations may apply for the grants, with a July 20 deadline approaching.

“My understanding is that they have received tremendous early indicators that there is incredible interest throughout the state,” said Rockford Mayor Tom McNamara, who recently joined the program’s board. “I think we’re going to see a host of really creative programs.”

The state law also created a path to expunge criminal records.

“By expunging hundreds of thousands of cannabis-related records, reinvesting the money spent on adult-use cannabis in Illinois into communities that are suffering, and making equity a central focus of the cannabis licensure process, the administration is ensuring that no community is left out or left behind,” said Toi Hutchinson, senior advisor to the governor for cannabis control.

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