Illinois: Pritzker Administration Announces Revenue Figures For First Month Of Adult Use Cannabis

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ILLINOIS: The Illinois Department of Revenue announced that adult-use cannabis sales generated $7,332,058 in cannabis tax revenue during the month of January, with an additional $3,147,928.29 generated in retail sales tax revenue. Governor Pritzker’s recently released budget conservatively estimated the state would collect $28 million in cannabis tax revenue during the remainder of the fiscal year, ending June 30, 2020. Today’s announcement puts the state on track to surpass that estimate.

Once administrative fees are accounted for, 45% of the adult-use cannabis tax revenue will be reinvested in communities disproportionately impacted by the failed war on drugs and used to fund substance abuse and mental health programs. The $3,147,928.29 in sales tax revenue will be divided between the state’s general revenue fund and the local governments where purchases were made.

“Today marks another milestone in the successful launch of Illinois’ legal cannabis industry. Our goal has been to build the nation’s most socially equitable program that includes new opportunities for the communities most harmed by the failed war on drugs. Revenue raised in this first month will soon begin flowing back into those communities to begin repairing the damage done by the failed policies of the past and creating new opportunities for those who have been left behind for far too long,” said Toi Hutchinson, Senior Advisor to Governor Pritzker for Cannabis Control.

The state collects cannabis revenue in two ways: a variable excise rate dependent on THC potency and type of product, and a 7% cultivators excise tax imposed on the sale of cannabis to retailers. Earlier this month, the state announced that over $39 million in adult-use cannabis product was sold at retail stores.

Last Wednesday, Governor Pritzker released his Fiscal Year 2021 budget, which projected cannabis sales would generate $28 million in cannabis tax revenue for the remainder of Fiscal Year 2020 (ending June 30, 2020). As the industry matures, revenues are estimated to grow to $127 million in FY21, of which $46 million will go to General Funds.

Background:

CANNABIS TAX RATES

• Cannabis Cultivation Privilege Tax:

o 7% of the gross receipts from the sale of cannabis by a cultivator or a craft grower to a dispensing organization

• Cannabis Purchaser Excise Tax:

o 10% of the purchase price – Cannabis with a THC level at or below 35%
o 20% of the purchase price – All cannabis infused products
o 25% of the purchase price – Cannabis with a THC level above 35%
o This tax is not imposed on cannabis that is subject to tax under the Compassionate Use of Medical Cannabis Pilot Program Act.

ALLOCATION OF STATE REVENUE

• Minus administrative costs, the remaining state revenue will be allocated as follows:

o 35% for the General Revenue Fund,
o 25% for the Criminal Justice Information Projects Fund to support the R3 program,
o 20% for the Department of Human Services Community Services Fund to address substance abuse and prevention, and mental health concerns,
o 10% for the Budget Stabilization Fund to pay the backlog of unpaid bills,
o 8% for the Local Government Distributive Fund to support crime prevention programs, training, and interdiction efforts, including detection, enforcement, and prevention efforts, relating to the illegal cannabis market and driving under the influence of cannabis, and
o 2% for the Drug Treatment Fund to fund public education campaigns and to support data collection and analysis of the public health impacts of legalizing the recreational use of cannabis.

Study: Marijuana Regulation Reduces Organized Crime Activity

NORWAY: The regulation of marijuana for medical purposes is associated in a decrease in violent crimes committed by Mexican drug trafficking organizations, according to data published in The Economic Journal.

A team of researchers from Norway and the United States assessed the relationship between medical marijuana regulation and criminal activity (homicides, assaults, and robberies) in Mexican border states. Researchers reported that medicalization reduced violent crime rates by as much as 12.5 percent, and theorized that broader adult use regulation would “have an even larger impact” on reducing criminal activity. Jurisdictions closest to the border experienced the most significant drop in violent criminal activity.

Authors concluded, “Our results are consistent with the theory that decriminalization of the production and distribution of marijuana leads to a reduction in violent crime in markets that are traditionally controlled by Mexican drug trafficking organizations.”

Prior reports by National Public Radio and others have similarly concluded that statewide cannabis legalization has significantly undercut domestic demand for Mexican-grown marijuana.


For more information, contact Paul Armentano, NORML Deputy Director, at: paul@norml.org. Full text of the study, “Is legal pot crippling Mexican drug trafficking organizations? The effect of medical marijuana laws on crime,” appears in The Economic Journal.

Herbonomics: Looking at Portland, OR Cannabis Licensing Trends

By Beau Whitney

OREGON: In advance of my talk this week at the CCC Show in Portland, I want to share an analysis I put together on the City of Portland, Office of Neighborhood Involvement Marijuana Licensing.

I initially reported on this in a press release of a white paper published on 12/12/16. Although there has been some movement on the retail side, not much movement has been made in the other categories.

I tracked the number of additional licenses issued for non-medical licenses since 10/10/16. I also listed the percentage of licenses issued versus applications submitted.

Over the past four months, there have been 3 new producer licenses issued, 4 processing and 5 wholesaler licenses. The change in the ordinance helped retailers with an increase of 47 new licenses since the ordinance change.

Percentage of Total Licenses Issued versus Applications Issued.

  • Retailers:             34.4%
  • Producer:            6.4%
  • Processors:         4.9%
  • Wholesalers       14.0%

Given that only 12 new non retail licenses have been issued in four months, this is an indicator that some additional reform is needed. Although it is in Portland, this can impact the entire Oregon industry.

The data speaks volumes. How is it that only 16 non retail marijuana licenses have been issued in four months. This is creating extreme economic hardship for many businesses.

portland licensing report

Revenue From Colorado Marijuana Tax Expected To Double In 2015

COLORADO: It’s heady times in the Mile High City, and that’s just at the state budget office.

Colorado is on track to more than double the state’s marijuana tax revenues this year, showing up the $44 million collected in 2014 with a projected 2015 windfall of $125 million, reports The Guardian. The state hoped to collect $70 million in 2014, but fell short.

According to financial data released last week, the state also raked in significantly more money taxing marijuana than it did taxing alcohol for the yearlong period of July 2014 to June 2015, with marijuana netting almost $70 million and alcohol just under $42 million.

Recreational Marijuana On 2016 Florida Ballot? Petition Needs 683,000 Signatures

FLORIDA: Regulate Florida, a political committee that wants to amend the Florida constitution to legalize and regulate adult use of marijuana for recreational use, has been given the go-ahead by the Department of State, Division of Elections to work on getting its initiative placed on the 2016 elections ballot.

This means that Florida voters could potentially be voting to legalize medical marijuana and to legalize marijuana for a recreational use for adults.

If voters were to approve it, then it would become legal in the state for those aged 21 or older to purchase and possess up to an ounce of marijuana and grow up to six plants within their own home after being approved for licensing.

Massachusetts Marijuana Groups Seek Pot Legalization Vote

MASSACHUSETTS: Two marijuana advocacy groups on Wednesday are set to submit proposed ballot initiatives that would allow Massachusetts voters to decide whether to legalize recreational pot smoking in the state.

The initiatives could become part of a wave of similar measures put before voters in a half-dozen U.S. states in 2016 as pro-marijuana groups follow a strategy that has already legalized the drug in four states plus the District of Columbia.

The proposals from the Campaign to Regulate Marijuana Like Alcohol and the Bay State Repeal say legalizing the drug in Massachusetts would bow to the reality that marijuana use is widespread in the United States. They say legalization would make it easier to regulate its sale and prevent people under 21 years of age from obtaining it.

How Is Marijuana Legalization Going? The Price Of Pot Peace Looks Like A Bargain.

In 2012 John Larson, a retired high school math and science teacher, voted against I-502, the initiative that legalized marijuana in Washington. Yet this week Larson was one of the first government-licensed marijuana merchants to open a store in that state: Main Street Marijuana in Vancouver. “If people were dumb enough to vote it in, I’m all for it,” he toldThe New York Times. “There’s a demand, and I have a product.”

Colorado Gov. John Hickenlooper also seems to have had a change of heart about marijuana. The former brewer, who opposed Amendment 64, his state’s legalization initiative, is not about to become a budtender. But in a recentinterview with Reuters, Hickenlooper conceded that the consequences of letting people grow, sell, and consume pot without risking arrest have not been as bad as he feared.

“It seems like the people that were smoking before are mainly the people that are smoking now,” Hickenlooper said as Colorado marked six months of legal recreational sales last week. “If that’s the case, what that means is that we’re not going to have more drugged driving, or driving while high. We’re not going to have some of those problems. But we are going to have a system where we’re actually regulating and taxing something, and keeping that money in the state of Colorado…and we’re not supporting a corrupt system of gangsters.”

Governor: Colorado Pot Market Exceeds Tax Hopes

COLORADO:  Colorado’s legal marijuana market is far exceeding tax expectations, according to a budget proposal released Wednesday by Gov. John Hickenlooper that gives the first official estimate of how much the state expects to make from pot taxes.

The proposal outlines plans to spend some $99 million next fiscal year on substance abuse prevention, youth marijuana use prevention and other priorities. The money would come from a statewide 12.9 percent sales tax on recreational pot. Colorado’s total pot sales next fiscal year were estimated to be about $610 million.

Retail sales began Jan. 1 in Colorado. Sales have been strong, though exact figures for January sales won’t be made public until early next month.

The governor predicted sales and excise taxes next fiscal year would produce some $98 million, well above a $70 million annual estimate given to voters when they approved the pot taxes last year. The governor also includes taxes from medical pot, which are subject only to the statewide 2.9 percent sales tax.

Colorado Recreational Marijuana Sales Exceed $5 Million In First Week

COLORADO:  Colorado marijuana dispensaries made huge sales in the first week of legal recreational marijuana.

Owners of the 37 new dispensaries around the state reported first week retail sales to The Huffington Post that, when added together, were roughly $5 million.

That’s a lot of green for Colorado’s legal weed.

Colorado, the first state to allow retail recreational marijuana sales to adults age 21 and older, has projected nearly $600 million in combined wholesale and retail marijuana sales annually. The state, which expects to collect nearly $70 million in tax revenue from pot sales this year, won’t have its first official glimpse at sales figures until Feb. 20, when businesses are required to file January tax reports, according to Julie Postlethwait of the state Marijuana Enforcement Division. [Read more…]