Adult-use cannabis taxes top liquor taxes despite sales dip in August

[September 04, 2021]  By Greg Bishop

(The Center Square) – Cannabis sales for the month of August dipped $5.8 million from the month before, bucking a consistent trend, but the governor’s lead advisor for the industry said things will continue to evolve.

In July, nearly $128 million of adult-use cannabis was sold. The following month, $122 million was sold. The only other declines month to month were in February 2021 and 2020, and a slight decline from October to November 2020.

It’s unclear if demand has peaked. Before Augusts’ sales numbers were revealed, Toi Hutchinson, the senior advisor for cannabis control to Gov. J.B. Pritzker, said that is something the law she helped craft as a state Senator requires review.

“The biggest thing is we designed this to study at every step of the way so that we could try to make the best policy decisions we could make with no breadcrumbs from any other state,” she said.

She couldn't say what the ceiling was for sales.

“I could not even begin to tell you,” Hutchison said. “I will tell you that in February we surpassed liquor tax money.”

So far in fiscal year 2022, liquor taxes remitted to the comptroller were $59.6 million. Adult-use cannabis taxes were $77.3 million. In fiscal year 2021, adult use cannabis taxes totaled $317 million. Liquor taxes totaled $312.1 million.

Toi Hutchinson, the senior advisor for Cannabis Control to Gov. J.B. Pritzker, talks about cannabis

• Greg Bishop / The Center Square

However, since legal sales begin in January 2020 the state has collected $447.2 million in cannabis taxes. In that same timeframe, the state collected nearly $517 million in liquor taxes.

State sales taxes on cannabis can be 40% or higher, depending on the potency of the product. Tax revenue the state collects is split several ways with some going to general funds, backlogged bills and police and health programs. A quarter of every cannabis tax dollar goes to certain community groups.

With more licenses being awarded by state regulators for different types of cannabis operations, Hutchinson predicts major evolution in the industry.

“I think that what we’re going to see in the next five years is something that looks drastically different than what it is today,” she said. “It’s ever evolving. It’s ever changing. This is brand new.”