In 2018, as legalization of recreational use of marijuana for Illinois and Chicago was first being debated, LWV Chicago agreed to support a study of the issue in cities and states that had already moved for legalization. The results of that study show that other jurisdictions concentrated on distribution, taxation, and other market operations. Illinois is the first state to decriminalize marijuana use and address social equity. Our CBD Update series will continue to follow developments as the recreational marijuana market matures.
Pardons & Expungements
On December 31, a day before Illinois legalized recreational use of marijuana, Gov. J.B. Pritzker pardoned more than 11,000 individuals convicted of low-level pot-related offenses in 92 counties across the state. The pardons set in motion expungements of records for nonviolent misdemeanor convictions or Class 4 felonies involving 30 g of cannabis or less.
Those who were arrested but not convicted will have their records automatically expunged by the Illinois State Police. The first round of automatic expungements of records dating back to 2013 will be cleared by January 1, 2021.
As Tom Schuba reported in the Chicago Sun-Times, Illinois is the 11th state to legalize marijuana use, but it is the first to address past convictions.
Although marijuana use is legal in Illinois and Chicago, arrests may be made in certain circumstances. See the ACLU’s flyer to know your rights.
High Prices & Short Supplies
In the days just after legalization, an eighth of “medium” quality weed was priced at $70 at Chicago dispensaries. In contrast, an eighth of weed in Washington and Colorado dispensaries ran between $28 and $31. Why? Short supplies. There are fewer than 24 cultivators in Illinois, and they were built to meet the needs of the medical marijuana market. Observers say it will take months and millions of dollars for cultivators to expand their facilities for the recreational marijuana market.
Pot sales also carry a significant tax, which is based on potency, plus local and state sales taxes. Weed with a potency above 35% is taxed at 35.25% at a Chicago dispensary. Taxes in other states that have legalized recreational marijuana use vary widely, from single excise taxes to combinations of retail, excise and sales taxes.
Where do the tax dollars go?
Chicago does not have a dedicated fund for its tax revenue. Paul Stewart, Mayor Lori Lightfoot’s cannabis advisor, told City Council the city’s take could range from $3.5-10 million in the first year. This revenue will be divided in a number of ways:
35% for the General Revenue Fund
25% to the Restoring Our Communities Fund for community reinvestment departments
20% to a fund that will support mental health and substance abuse services
10% to the Budget Stabilization Fund to pay a backlog of unpaid bills
8% to the Illinois Law Enforcement Training and Standards Board to create a law enforcement grant program
2% to the Drug Treatment Fund to fund public education and awareness
According to Block Club Chicago's Justin Laurence, The Illinois Department of Revenue projects the state will raise more than $57 million in revenue and licensing fees in 2020. As the recreational marijuana market matures, revenue will rise. Estimates indicate that the state could collect $375 million in 2024 and up to $440 million and $657 million a year in future years, according to a study commissioned by the sponsor of the state’s legal weed bill.