Cannabis dispensaries in Illinois sold more than $1 million in sales per day in January, to a total of almost $40 million in the first month. Adult-use sales of cannabis took effect on New Year’s Day this year after Illinois became the 11th U.S. state to legalize recreational cannabis last June. And the first month of sales totaled $39,247,840.83, with over $8 million of those sales coming from out of state customers, according to the Chicago Tribune.
The near $40 million in sales is despite the fact that Illinois has the second-highest tax rate among the 11 states with legal adult-use cannabis. Additionally, Illinois has been dubbed the least tax-friendly state in the nation. Consumers in Chicago pay a tax of over 40%, which doesn’t even include a 7% state wholesale tax. Even though taxes are sky-high and experts have been predicting that the black market would thrive because of that, Illinois lawmakers think that the cannabis market will only continue to grow.
“The successful launch of the Illinois legal cannabis industry represents new opportunities for entrepreneurs and the very communities that have historically been harmed by the failed war on drugs,” Toi Hutchinson, Gov. J. B. Pritzker’s senior advisor for cannabis control, said in a press release.
Customers waited in line outside of dispensaries in Chicago for hours at the beginning of the year for their chance to purchase legal cannabis. Cannabis sales for January would have likely surpassed $40 million, had it not been for the fact that retail locations were running out of product after only a week of sales.
The lull in recreational sales is also due to the fact that dispensaries are required by law to maintain a 30-day supply in order to meet the needs of medical patients. In order to comply with the state law, dispensaries temporarily suspended sales to recreational customers so that patients could have proper access to the medicine they need.
But, even the limits placed on recreational sales were not enough to avoid product shortages. This is because cultivators had to wait until they got the confirmation that the governor would sign the bill to start growing at the level that would satisfy customer demand. Even as 2019 was a significant downturn for many publicly-traded cannabis stocks, this high demand in a market that is taxed at an extremely high rate should serve as proof that the cannabis industry as a whole will only continue to turn profits at record highs.