Medical Marijuana Tax Structure in Illinois
Medical marijuana is taxed at the 1% pharmaceutical rate.
In addition, a 7% privilege tax is imposed on cultivation centers and dispensaries. Revenue generated from this privilege tax is deposited in the Compassionate Use and Medical Cannabis Fund, which supports the administration and enforcement of the Act.
Revenue from Early Sales
Wholesale medical cannabis sales in Illinois totaled about $1.5 million during the first two months of legal sales.
This means Illinois collected approximately $107,000 in taxes during this time, with wholesalers paying a 7% tax to the state.
Retail Performance
- Patients purchased about $1.7 million worth of medical cannabis during November and December.
- The average retail price was $14 to $15 per gram.
Registered Patients and Participation
As of Nov. 9, 2015, Illinois’ medical cannabis pilot program had about 3,300 registered patients, according to the Illinois Department of Public Health (DPH).
However, dispensaries only served 2,815 patients during November and December.
Economic and Political Implications
The new revenue stream is timely, given Illinois’ massive debt and pension crisis.
State lawmakers have not yet shown signs of supporting recreational marijuana legalization, but the medical marijuana tax revenue may influence future political decisions.
Comparison with Other States
- States with legalized recreational marijuana are experiencing strong cannabis-related tax revenues.
- Colorado collected approximately $70 million in marijuana tax revenue during the last fiscal year.
- This is nearly double the $42 million Colorado collected from liquor taxes during the same period.
Frequently Asked Questions
What is the tax rate for medical marijuana in Illinois?
Medical marijuana in Illinois is taxed at a reduced 1% pharmaceutical rate. Additionally, a 7% privilege tax is applied to cultivation centers and dispensaries, which helps fund the state’s medical cannabis program.
Where does the tax revenue from medical marijuana go?
The 7% privilege tax revenue is deposited into the Compassionate Use and Medical Cannabis Fund. This fund supports the administration and enforcement of the Illinois Medical Cannabis Program.
How much medical cannabis was sold during the early months of legalization?
During the first two months of legal sales, wholesale medical cannabis transactions totaled approximately $1.5 million, while retail sales reached about $1.7 million.
How many patients participated in Illinois’ medical cannabis program in 2015?
As of November 9, 2015, there were about 3,300 registered patients. However, dispensaries served only 2,815 patients during November and December of that year.
How does Illinois’ cannabis tax revenue compare with other states?
Illinois’ early cannabis tax revenue was modest, especially compared to states like Colorado, which collected around $70 million from marijuana taxes in one fiscal year—nearly double what it collected from liquor taxes.