Illinois’ out-of-state cannabis sales drop to 2-year low

Out-of-state cannabis sales fell to $31 million in February, the lowest since February 2021. Missouri starting recreational pot sales at a lower cost is a major factor.

Missouri has for years offered nearby Illinoisans cheaper gas and cigarettes. Now marijuana is on the list.

Missouri’s first month of selling recreational cannabis also meant Illinois’ out-of-state sales fell to $31 million, the lowest monthly total since February 2021.

Out-of-state sales make up nearly one-third of cannabis sales in Illinois. Missouri offers the lowest excise tax in the nation with a flat 6% sales tax. Illinois uses a scale that charges up to 25%, depending on the product.

The competition is taking a toll on Illinois cannabis business owners near the state border, whose sales fell 30% in February.

It’s not just business owners being penalized, but also Illinois towns that benefitted from cannabis revenue for two years. Collinsville City Manager Mitch Bair’s budgets had room for an extra $1.5 million thanks to cannabis revenue.

“It’s been really a great benefit to this community,” Bair said. “It’s been extra funding for capital projects and operations.”

With cheaper cannabis about 12 miles by interstate away, Collinsville will certainly lose some of that revenue.

“Well sure it’s bad for Collinsville,” Bair said.

Missourians previously had to drive to Illinois to buy recreational cannabis. Now Illinois’ high taxes will push Illinoisans in the opposite direction, where gas and cigarettes will also be cheaper because of lower Missouri taxes.

Illinois was recently rated the nation’s 8th-most sinful state, and state lawmakers like to impose sin taxes. Cannabis excise taxes brought in $445 million in fiscal year 2022.

It seems like a huge payday until you compare it to Illinois’ $140 billion pension debt, the highest in the nation.

There would be less need for sin taxes and more revenue available for public services were state lawmakers committed to reforming pension spending growth, which has increased by 584% since 2000. For reference, total spending has grown by 21% in that time and critical services for children, public safety and mental illness have been cut by 20%.

High taxes will always be an issue as long as spending increases at an irresponsible and unsustainable rate.