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.