From Greg Miller, Executive Director, the National Institute of Cannabis Investors
It happened quickly, but Illinois lawmakers approved the legalization of recreational marijuana last Friday. It was the first instance where a legislature approved commercial sales. Those who are 21 or older may possess up to 30 grams, and adult visitors to the state may possess up to 15 grams. The state is also rolling out a unique tax structure. I’ve talked about how the right structures can get a legal market started on the right path. On Friday, look out for a report where I talk about one such market. If taxes are too high, we could end up with another California on our hands.
Cannabis Tax Structure
In Illinois, sales will be taxed at 10% for THC levels at or less than 35%. Cannabis-infused products will taxed at 20%, and 25% for THC concentrations of more than 35%. Municipalities can add special taxes up to 3%, and counties can add up to 3.75% in unincorporated areas. Now, I believe taxes should be between 10% to 16%. Anything else, like how California rolled things out, can cause trouble. If prices are too high, cannabis enthusiasts just turn to the black market. I’m still thinking about supertaxes on high-THC cannabis.
But I don’t want to be too hard on Illinois just starting out, because the important thing is they are moving forward with legalization. It’s going to become what I’m calling the “Marijuana Mecca” of the Midwest. I know Michigan has legalized recreational marijuana, but with Illinois, you get Chicago. The winters are rough, but it’s a great sports town, and the Windy City actually set a new tourism record for itself in 2018 with 58 million visitors.