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Overall, tax receipts grew by 10% in Illinois last year, with
all the growth coming despite the state being slow to distribute
new licenses after legalizing recreational marijuana sales in
2020. In addition, the state charges some of the highest taxes
in the country at nearly 40% when local taxes are included,
compared to just 10% for Michigan.
“In Illinois the growth rate will be predicated on lowering
prices and generating greater access. It’s critical that they
open more stores and increase the supply in the market,” Whitney
Economics founder Beau Whitney told Crain’s Chicago Business.
By Whitney’s estimations, 48% of Illinois marijuana users had
been converted to the legal market as of 2022, compared to 75%
of marijuana users in Michigan, which saw a 20% jump from the
year before and took $326 million in taxes to rank No.4 overall
in that category.
Even with it being much easier to get a license to grow or sell
marijuana in Michigan and the state having a lower tax rate and
higher overall sales than Illinois, Whitney said the gap between
the two states isn’t likely to change much anytime soon.
"Illinois has greater upside," he said. "In Michigan, their
growth rates will slow and eventually level off. In three to
five years, it will be dependent on population growth.”
In the end, Whitney estimates that overall medical and
recreational marijuana sales will grow by about 21% this year to
$2.3 billion, while growth in Michigan will be at around 4% to
$2.5 billion.
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