The State of Illinois hit its second-highest sales record on recreational cannabis this past March since it voted in favor of legalization in 2019. Unfortunately, the fact that there are still around 185 licenses for retail operations tied up in litigation, and the market is continuing to be dominated by legacy medical growers, is creating an obstacle that the state is finding it difficult to bounce back from.
Out-of-State Buyers Flooding the Illinois Recreational Cannabis Market
Because Illinois is surrounded by states who have yet to fully legalize recreational cannabis, many of the state’s border cities are seeing their sales being driven up by out-of-state buyers, despite it being illegal to carry cannabis across state lines.
In Illinois’ surrounding states, including Iowa, Wisconsin, Indiana, Kentucky, and Tennessee, cannabis has yet to be decriminalized, and only the sale of medicinal CBD products has been made legal. So border residents have been flocking to the fully legalized Illinois retail stores to get their cannabis.
According to MJBizDaily, of the total $131 million in sales made for March, roughly one-third were made by people coming from out-of-state, for a total of $40.6 million. The 2021 sales year for Illinois boasted $1.4 billion in recreational sales, with around $436.2 million coming in from those customers crossing the border from non-legal states.
Problems for border towns selling recreational cannabis are cropping up due to these out-of-state sales, says Kathleen Olivastro, the regional director of Ascend Wellness Holdings, which is the parent company of Illinois Supply and Provisions, as they are now having to spend time and money to train their employees in the legalities of cross-border transportation.
“We value our customers and encourage them to follow the law. Ultimately, individuals are responsible for any legal ramifications, including transporting across state lines, once products leave the (store). We do encourage anyone considering purchasing cannabis to research and understand the laws before they come in.”
Illinois Retail at a Standstill While Cultivation & Retail Licenses are Tied Up in Ligitagion
While Illinois announced its social equity program with much gusto and fanfare after recreational cannabis was legalized, the truth is that not a single thing has been moved forward since the initial announcement.
There are currently 185 cultivation licenses sitting in litigation, many of which are held by minorities, and for another year, the Illinois State Capital legislative session has ended, with no movement on this issue whatsoever. This leaves license holders having to wait another year to learn whether or not the state will honor their licenses, many of whom have simply run out of money while waiting for an answer, and can no longer afford to wait for next year’s session.
What this means for the Illinois recreational cannabis market is that since the only product being cultivated, processed, and sold to retail stores is from legacy medical cannabis cultivators, there is no new product hitting store shelves. This leaves the retail market stagnant compared to other states, which is why Illinois continues to struggle to catch up, sales-wise, to other legal states.
This is disproportionately affecting minority license holders says Illinois State Representative La Shawn Ford (D-Chicago), “The people that we intended to be emerging in this market have not yet emerged because they are still tied up in court. And those are the Black people and Brown people that have been a target of the war on drugs. So right now the law, for the intent, has failed.”
It’s time that legislators in Illinois stop tying up these licenses in court and finally make good on the promises they made almost two-and-a-half years ago.
While sales of recreational marijuana are finally beginning to grow in the state of Illinois, they still have a way to go before they catch up to other legal states. To do so, state lawmakers need to put an end to the seemingly endless court proceedings regarding cultivation license holders so that cannabis consumers in and around Illinois can have more choices than just those cultivated by legacy medical cannabis growers.
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