Marijuana sales dip as Illinois’ high taxes boost illegal market

Illinois’ cannabis dispensaries are noticing a steady drop in sales after record-setting sales in December. High prices and a lack of supply likely push customers to street dealers.

Recreational marijuana in Illinois set record sales for nine consecutive months, up until January and February 2022.

February’s haul of $114 million was the lowest since last March. Price matters to consumers, and Illinois has some of the highest marijuana taxes in the nation. Those high prices potentially push people to illicit sellers.

New Frontier data estimated illegal sales in Illinois reached $2.23 billion for 2021 compared to $1.37 billion in legal sales.

The illegal market will continue to thrive as long as consumers face daunting price tags, said Andy Seeger, a cannabis industry analyst.

Lower costs for consumers will depend on state leaders “getting out of the way and really allowing competition,” Seeger said.

A botched licensing process that spurred multiple lawsuits has prevented many applicants from getting their permits.

“Right now it’s just a captive market in which the ability to grow … is just really monopolized,” Seeger said.

It’s a far cry from the promises Gov. J.B. Pritzker made when recreational sales started in 2020. Back then Pritzker claimed Illinois would have the most diverse cannabis industry in the nation.

On March 15, more than two years after legal marijuana sales started, Pritzker administration officials announced new rules to simplify the dispensary license application process.

Despite the new rules, high prices will still incentive consumers to buy from the illegal market, where marijuana is unregulated and could be laced with more dangerous substances.