Illinois among top 5 states for sales tax revenue from marijuana

Illinois is one of the states that rakes in the largest amounts of taxpayer dollars from the sale of recreational marijuana and cannabis-infused products.

Twenty-three states, along with Washington, DC, have legalized recreational marijuana, generating more than $3 billion in tax revenue by 2022.

In the last quarter of 2023, the states that generated the most revenue collected a combined $457.7 million.

Here’s a look at the recreational marijuana laws and tax rates in each state.

1. California, $160 million

In California, adults 21 years and older are allowed to purchase cannabis from licensed dispensaries. They may also privately possess, purchase or give away up to one ounce of cannabis and up to 8 grams of concentrated cannabis. Cultivation is limited to six living plants. Consumption in public or in a motor vehicle is prohibited. The state tax on retail cannabis sales in California is 15%.

2. Washington, $113.4 million

In Washington State, adults 21 and older are allowed to purchase and possess up to one ounce of pure cannabis, 16 ounces of THC-infused edibles, 72 ounces of liquid products, and 7 grams of concentrates. Public consumption is not allowed. Growing cannabis at home is also prohibited. A 37 percent tax is levied on pharmacy sales.

3. Michigan, $73.1 million

Michigan law allows adults 21 and older to grow up to 12 cannabis plants per household. They may possess 2.5 ounces of marijuana and 15 grams of concentrated products. The Michigan Regulation and Taxation of Marijuana Act (MRTMA) imposes a 10% sales tax on retail sales.

4. Illinois, $69.1 million

Effective January 1, 2020, Illinois residents age 21 and older may possess 30 grams of cannabis and 5 grams of concentrated products containing up to 500 milligrams of TCH. Non-resident adults may hold half of these amounts. Taxes on retail cannabis sales are 10% for all products with an adjusted THC level of less than 35%, 25% for products with a THC level of more than 35%, and 20% on sales of all infused products. Public consumption of cannabis is illegal.

5. Colorado, $60.1 million

Adults 21 and older in Colorado are allowed to possess and give away up to one ounce of cannabis and grow six plants at home. However, households are limited to a dozen plants. Marijuana purchased from a licensed dispensary is subject to a 10% sales tax. The state levies a 15 percent excise tax on wholesale purchases.

A closer look at Illinois

The state collected $417.6 million in taxes from sales at adult-use pharmacies in 2023, according to the Illinois Department of Revenue.

The amount of Illinois tax revenue that comes from the city of Rockford is not known because municipalities with fewer than five pharmacies are not allowed by state law to share those figures publicly. Rockford currently has three marijuana dispensaries.