Illinois Cannabis Sales up for 2023, but Pace Slows

Illinois Cannabis Sales up for 2023, but Pace Slows

The numbers reflect the growing pains for the industry.

This story was republished with permission from Crain’s Chicago and written by John Pletz

Illinois recreational-marijuana sales were up 5% in 2023 to $1.6 billion, with the pace slowing from the year before, reflecting the industrywide slump in pricing and new competition from Missouri.

However, sales growth picked up late in the year and held steady at about 7% in recent months, according to the Illinois Department of Financial and Professional Regulation.

The number of cannabis-related products sold in Illinois grew even faster, at roughly 20% in the last few months of the year, reflecting growing demand but lower prices. For the year, the number of products sold grew 15% from 2022.

The numbers reflect the growing pains for the industry, which has struggled with falling prices and rising costs, and the sobering realization that the road to riches in weed is going to be longer than many expected.

An increase in retail outlets in Illinois helped fuel sales. After long delays from litigation and the pandemic, the state issued new licenses, and many of those stores began to open last year. There are 177 dispensaries in the state, and increase of more than 50%.

Sales to out-of-state residents dropped nearly 15% last year to $408 million after Missouri began sales of marijuana. Missouri’s tax on marijuana is about one-third of the rate in Illinois, which is among the highest in the nation.

“It’s validating to see cannabis revenue numbers continue to climb in Illinois, year over year,” says Jeremy Unruh, a senior vice president for Chicago-based PharmaCann, one of the state’s largest cannabis companies. “The pace has slowed, however. That slowdown is a clear sign that we must focus on shoring up leakage in the state’s revenue opportunity by adjusting the tax model to better compete with neighboring states and shuttering illicit operators who contribute no taxes at all to the state’s coffers.”

The state of Illinois collected $418 million in cannabis taxes last year.

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