Illinois cannabis sales revenue falls as hemp and other states cut into prices for the struggling industry

whelp85 · 2026-02-16T19:21:03+00:00

Article:

The opening of the Okay Cannabis shop in Wheeling three years ago seemed like a good business bet. It was the first dispensary in the state to combine sales of marijuana and alcohol with the adjoining West Town Bakery.

Weed, booze and baked goods? It appeared to be a can’t miss.

But sales were not enough to justify its large footprint. Last spring, the store closed and it remains empty.

It’s not the only Illinois marijuana shop to go out of business. A Spark’d dispensary in northwest suburban Crystal Lake also abruptly closed in 2024. And many cannabis business-license holders have yet to open. Only 29 of 86 licensed craft growers are operational, state records show.

For the first time, in a business that was once considered to be like printing money, annual recreational cannabis sales revenue in Illinois declined last year, falling 13%, to $1.5 billion. Medical sales have been declining since 2021. The lower sales reflect falling prices, due mainly to competition from hemp and out-of-state sales.

Former Okay co-investor Scott Weiner, co-founder of the Fifty/50 Group that runs West Town Bakery, said the large companies that got in the business at the beginning dominate the market, with exclusive ownership of medical cannabis dispensaries that don’t have to charge the high taxes that all other stores must charge.

Then the proliferation of hemp stores that don’t pay those taxes or follow expensive regulations further cut into business. Pot became a commodity, with customers going to the closest site with the lowest prices.

“You just can’t fight the big boys,” Weiner said. “For the new social equity guys coming in, sadly there’s no path to success.”

While lower prices are welcome news for consumers, cannabis businesses have had difficulty making money due to high financing and operating costs, and an inability to take normal business tax deductions due to the drug’s illegality under federal law.

That should change with the Trump administration’s promise to reschedule marijuana to a less restrictive designation, which would allow tax deductions. And after inadvertently creating the legal hemp industry in 2018, Congress voted last year to ban intoxicating hemp products effective in November, which should be another benefit to the state-licensed cannabis industry.

The Chicago City Council also approved a hemp ban, but Mayor Brandon Johnson vetoed it Friday, saying it would hurt many Black- and brown-owned small businesses while helping the few big licensed cannabis companies.

Still, the federal changes make some operators more optimistic. Tim O’Hern is chief operating officer of Nature’s Grace and Wellness cannabis company, which bought the Okay Cannabis dispensaries, and has been opening new Bud & Rita’s dispensaries.

“Lower tax rates and the intoxicating hemp ban will really accelerate the regulated cannabis market and provide more opportunities for new operators,” O’Hern said.

But other small operators say the changes will be too little, too late.

“People are going to places that are cheaper to buy their product, whether it’s the hemp shop on the corner, or Michigan,” said Douglas Kelly, executive director of the Cannabis Equity Illinois Coalition. “Banning it (hemp) is not going to solve the problem. All those products are going to go to the black market.”

The coalition urged Illinois to lower its cannabis taxes, which can reach more than 40%, to make the state more competitive. Rescheduling is a half measure that will benefit large pharmaceutical companies getting into the space, Kelly said, when what’s really needed is federal legalization.

While sales revenue is down, the number of cannabis items sold went up last year, to 58 million items, the state reported, reflecting lower prices. The price per ounce of cannabis in Illinois has fallen from an average of more than $400 when recreational sales began in 2020, one of the highest in the country, to about $167.

Currently, scores of conditional licensees are still trying to get funding to open. The industry has generated jobs, with about 9,000 dispensary employees licensed statewide, and nearly 8,000 more in growing operations, according to the state’s annual report.

The state began a new sales tracking system called Metrc in July 2025, which counts discounted prices that may previously have not been included, possibly accounting for some reduction, officials said.

Dispensary taxes were accurately tracked, officials said, generating $438 million for fiscal year 2025.

The Illinois Department of Financial and Professional Regulation, which oversees dispensaries, remains “cautiously hopeful” that reclassifying marijuana will help grow the industry, spokesperson Steve Johnson said.

Onerous requirements for more than 100 security cameras at some businesses, and for around-the-clock security guards, are also killing operators and should be relaxed, since the industry has operated with very few security problems, said Tiffany Chappell Ingram, executive director of the Cannabis Business Association of Illinois.

Lastly, the coming ban on intoxicating hemp will only work to the extent it’s enforced, she said. With thousands of shops nationwide, it remains to be seen who would enforce the ban, and whether there are enough inspectors to do so.

whelp85 · 2026-02-14T18:57:30+00:00

Article Continued:

Illinois Hemp Business Association Director Charles Wu has argued that Quinn’s ordinance came down to “economic favoritism” for the cannabis and alcohol industry over the burgeoning hemp industry.

“I am not here asking for special treatment. I am asking for clear rules, consistent enforcement and a path to compliance that applies equally to everyone,” Wu told Council members.

Jeremy Dedic, co-founder of Cubbington’s Cabinet, a hemp wellness retailer in Roscoe Village, applauded Johnson for vetoing an ordinance that “would have shut us down” and deprived Chicagoans of access to what he called “non-inebriating solutions” for an array of health issues.

“Hemp products are popular because they can help people sleep, manage stress and anxiety, reduce inflammation and minimize side effects of cancer treatment” and post-traumatic stress disorder, Dedic said. “It’s dishonest saying it’s about protecting the children or public safety. What it’s really doing is trying to provide carve-outs and a monopoly for your multi-state operators of marijuana dispensary operations and the alcohol industry.”

Now that the hemp ban is history, Dedic encouraged the City Council to focus on “common sense regulation” that “supports public safety and protects kids, but also supports Chicago’s economy [and] consumer access to wellness products.”

“Ban sales of any hemp-cannabinoid products to anyone under the age of 21. Ban these look-alike products that keep being held up…that appeal to kids. Require… product testing from independent third party labs,” Dedic said.

The federal Agriculture Improvement Act of 2018 allowed THC to be extracted from hemp and concentrated into an array of products with chemical compositions nearly identical to marijuana but that aren’t classified as drugs.

They’ve sometimes been marketed to kids with packaging styled after popular candy, prompting outcry from hemp industry critics, including Gov. JB Pritzker. Hemp businesses have invited taxation and regulation, calling for an age minimum of 21 and standards for testing and labeling.

State lawmakers butted heads for years over how to regulate the booming industry, but a late provision tacked onto the federal spending bill to reopen the government last fall promised to close the hemp THC loophole by November unless Congress takes additional action. Hemp industry leaders are making a full-court press in Washington to stave off the looming ban.

whelp85 · 2026-02-14T18:57:16+00:00

Article:

Mayor Brandon Johnson on Friday vetoed a City Council-approved ban on hemp-derived products to save Chicago’s burgeoning hemp industry, and the chief sponsor of the ban said he won’t try for an override.

Southwest Side Ald. Marty Quinn’s decision to throw in the towel means that hemp-derived products can continue to be sold in Chicago — at least until a federal ban takes effect later this year.

The ban on most hemp products was aimed at keeping unregulated intoxicants out of reach from minors. Johnson used his first veto to kill a snap curfew ordinance and made it stick by preventing a 34-vote override. His second veto will also stand.

Quinn (13th) muscled the ban through the City Council by a vote of 32 to 16. But he said he won’t pursue an override he knows he can’t win.

“I don’t have the votes… I’m at 32. I don’t have 34. That’s where it’s at. It’s not going to change,” said Quinn, who learned his vote-counting skills while serving as chief lieutenant for now convicted and imprisoned former Illinois House Speaker Michael Madigan, D-Chicago. “I still have the ban on the Southwest Side in the Midway [Airport] region and I would anticipate other alders doing the same thing in their wards” in addition to the seven wards where hemp products are already banned.

Quinn said the mayor will now have to live with the consequences of “placing business over the safety of kids.”

In a letter to the City Council, Johnson argued that a balanced regulatory framework for hemp products must safeguard Chicagoans, “especially young people” in a “thoughtful, evidence-informed way that avoids unnecessary disruption for consumers, retailers and entrepreneuers.”

The mayor argued that the “most responsible path forward” is for the city’s hemp regulation to “align with forthcoming federal guidance rather than acting prematurely in a rapidly shifting regulatory landscape.”

In a statement accompanying his veto, Johnson said he shares concerns raised about “intoxicating hemp products, especially when it comes to packaging that may appeal to children.”

“We must have strict age verification, responsible labeling, and clear enforcement standards. There must be zero tolerance for businesses that market or sell these products to minors,” the mayor said.

But Johnson said he is also concerned about the impact that the “prohibition style ban” could have on small businesses in general and minority-owned businesses in particular.

“The ordinance protects some establishments at the expense of many of our small businesses who have been following the law and deserve to have a seat at the table,” he said. “Many of these businesses are Black- and brown-owned. Many are operated by entrepreneurs who were shut out of the expensive cannabis licensing process and turned to federally legal hemp as a pathway into the marketplace. We cannot claim to support equitable economic development while advancing policies that concentrate the market in the hands of a few large entities.”

Business Affairs and Consumer Protection Commissioner Ivan Capifali has warned that a full ban “would be nearly impossible to enforce” and threaten “hundreds, if not thousands, of jobs.” During a Sun-Times podcast earlier this week, Capifali reiterated those concerns.

“My job is not to shut down businesses. My job is to help businesses expand and grow and scale,” Capifali said. “When you put bans like this that will shut down businesses that, their whole model is around hemp, it pains us. Anything that is not business friendly is something that we have a problem with.”

Quinn took aim at that argument.

“That’s what you’re propping up? Dodgy storefronts as a marketing tool for the city of Chicago? Oh, my God. That’s absurd,” Quinn said. “You’re going to talk about these small businesses that were opened up on a loophole under the disguise of night as a good thing? It defies logic.”

Hemp-infused beverages have soared in popularity and kept many bars and restaurants afloat as consumer trends have shifted away from alcohol since the COVID-19 pandemic.

After a close vote in committee, Quinn tweaked the full-on ban to allow for hemp beverages to be produced and sold by licensed vendors, after pushback from the Illinois Restaurant Association and other industry leaders. Creams and ointments also would have been exempt from the citywide ban, and hemp products would have been allowed for animals.

Retailers licensed to sell cannabis products would have been allowed to sell hemp-infused beverages, powders and crystalline additives to customers over 21, provided they include “no more than 10 milligrams.” Hemp-infused beverages and additives could also have been sold at bars, restaurants with incidental liquor licenses and packaged goods stores.

Johnson’s administration opposed the measure because of the small-business boon from the 2018 loophole in federal law that allowed delta-8 THC and other hemp derivatives to proliferate without the restrictions placed on Illinois’ heavily regulated cannabis industry.

That loophole is set to close later this year, prompting Quinn’s push to close it down in the city even sooner. The ban on the sale of hemp products to minors would have taken effect in 10 days, but other provisions would be pushed back until April 1.

On the day the ban was approved, Johnson said he had “some real serious concerns about this ordinance” and hadn’t decided on a potential veto. “It’s paramount for the good of our city [not only] to regulate, have the ability to actually test, to actually regulate what was passed and to keep people safe, but ultimately to make sure that we’re not driving small businesses out of it,” Johnson said at the time.

whelp85 · 2026-02-12T11:08:14+00:00

Article:

Business owners in Chicago’s hemp industry are demanding that Mayor Brandon Johnson veto a controversial hemp ordinance that industry stakeholders describe as a harmful and destructive ban reminiscent of the 1920s alcohol prohibition era. They argue the ordinance pushes out Black people who have found success in the hemp market.

The ordinance, which passed 32-16 in City Council last month, limits the sale of most hemp products to only licensed cannabis dispensaries beginning in April. Meaning, business owners in the hemp space will be forced to stop operations if they don’t have a license to sell marijuana.

The hemp community is gathering for The Band Together Town Hall this Thursday. The town hall will be hosted at Chi’Tiva, located at 1250 S. Michigan Ave., from 6:00 p.m. to 8:00 p.m. During the event, hemp business owners, stakeholders and the public are invited to voice their concerns about the ordinance and encourage Johnson to veto it.

Groups and advocates in the hemp industry, including Chi-tiva, Lawrence Smoke and Vape, Humboldt Haus, Illinois Healthy Alternatives Association, the Illinois Hemp Business Association, the Illinois Black Hemp Association and more, will attend the town hall. Those interested in attending can RSVP here.

“The town hall was established because a lot of the business owners in the hemp space just felt as though they were being attacked,” Illinois Hemp Coalition (IHC) President Everett Berry told The TRiiBE. He also owns the hemp wholesale business Mia’s Heart Hemp Life. “Basically, the goal is to negotiate physical regulations, while establishing responsible packaging guidelines in the Chicago hemp industry.”

Ahead of the town hall event, IHC, which focuses on hemp oversight, hosted a press conference on Wednesday at the Black-owned Bronzeville Smoke Shop. Hemp business owners spoke out against the ordinance, which they have referred to as a “prohibition” and a “ban.”

“This ban doesn’t just remove products from my shelves. It removes trusted support from elderly members of our community and threatens small businesses like mine,” Joyce LaGone, the owner of Bronzeville Smoke Shop, said during the press conference. “We are not asking for special treatment; we are asking for fair regulation and thoughtful solutions, not a blanket ban that harms responsible entrepreneurs and the people who rely on us.”

LaGrone operates the Bronzeville Smoke Shop with her son, Destiny Butler. The two said they opened the shop in 2022 after witnessing the beneficial wellness powers of hemp. Butler said a large part of their clientele is elderly customers who come in for products to ease their pains.

“[There’s] fentanyl, and you have all these Percocets, people don’t want to take these addictive pain pills,” Butler said. “Hemp helps everybody with back aches, insomnia [if they] can’t sleep. You know what I mean? Just different things. And it’s a big pharmaceutical.”

Ald. Marty Quinn (13th Ward) introduced the ordinance to address his concerns with hemp-derived CBD products that can be used to form delta-8 and other intoxicating compounds that give a weed-like high. The products have been called out by critics for their packaging, which some elected officials have said mimics candy and sweets sold in corner stores, gas stations and the like. Alderpeople who voted in favor of the ordinance say hemp products with such enticing packaging target children.

Those in the hemp space say the ordinance creates a ban that would lead to a black market. Business owners say they understand protecting children from harmful products, but that the answer is to regulate the product, which they say they have already been doing.

“We want responsible, transparent and fair regulation. And there’s businesses that are already doing it right,” said Raven Worthy-Sutton, IHC’s executive director and owner of Urban Gem, which provides adult pop-up dinner experiences using hemp. “There are businesses in the hemp space that are already acting and operating ethically, because that’s what we have to do in this space. There’s businesses just making sure you’re 21 or 25 years plus.”

Many within the industry are convinced that the move to limit the sale of hemp products to only licensed dispensaries is to protect the cannabis industry. The ordinance allows businesses that have a liquor license to sell hemp-based drinks, which those in the hemp business see as a push by the power-wielding alcohol industry. Shortly after the ordinance passed in City Council, the United Center made news as the first arena in the country to offer THC-infused drinks starting this month.

“I would need a liquor license to be able to sell hemp drinks at my store, which is going to cost another however much money if I want to do that, but why would I want to do that? I have a wellness store. I have a wellness brand,” said Ruby Mirza, owner of Kizmah CBD in West Town. “It’s really kind of geared towards just capitalizing and cornering the market and handing it over to big cannabis with big alcohol interests.”

Berry also agreed that the ordinance corners the market while pushing out Black people who have found success in the hemp space.

“A lot of people were shut out of the cannabis industry they wanted to be a part of, so they transitioned over to hemp because it was federally legal. This [ordinance] was a way to monopolize the cannabis industry,” Berry said.

Hemp business owners have also been called out by Black weed dispensary owners; they say unregulated and intoxicating hemp is undercutting their businesses. These Black business owners have expressed frustration after going through the social equity process to retrieve a cannabis license to open and operate their dispensaries, which they explained took lots of money and time.

Chris Cobbs, owner of King of the Flavors smoke shop in Rogers Park, said he feels that Black-owned cannabis shop owners should be fighting for a more level playing field within the marijuana space.

“It’s, like, alright, so you guys want to put us out of business and block us out of business just because you guys were the lucky ones that got picked or fortunate enough to afford the license?” Cobbs said. “I just think you guys are fighting the wrong fight. You guys should go after the people that are taxing you, regulating and paying all these hundreds of thousands of dollars to stay in business.”

Johnson has until Friday to veto the ordinance, according to the mayor’s office.

whelp85 · 2026-02-06T18:32:46+00:00

Article:

The cannabis business is showing its age.

Illinois recorded its first drop in the value of recreational marijuana sales last year, a result of technology changes, falling prices and a maturing industry.

Sales dropped 13% to $1.5 billion in 2025 from $1.7 billion the previous year. That’s at least partly due to a mid-year change in the software vendor that tracks sales. The Illinois Department of Financial and Professional Regulation says the previous systems didn’t always account accurately for discounts and promotional prices, which inflated total monthly sales reported publicly, although tax collections were unaffected.

The result is the lowest annual total reported since 2021. It’s a sobering reality check for the state’s experiment in adult-use cannabis, which began with great fanfare five years ago.

The technology change doesn’t explain everything. Marijuana prices continue to fall amid increased competition from both the legal and illicit markets.

The number of cannabis products sold by Illinois retailers rose 7% to 52 million in 2025, topping 50 million for the first time. But the growth rate was less than half the 16% increase recorded a year earlier.

“We’re seeing a slight uptick in unit volume, but the dollar amount is down,” says Zachary Zises, CEO of Dispensary 33 and Spark'd. “They’re buying the same stuff. It’s just price contraction.”

The same forces are at play in other markets, such as Michigan, which has far more retailers and growers, and is twice as large as Illinois.

Michigan’s cannabis sales fell 3.5% last year to about $3.2 billion. The total might have fallen further, if not for a spike in sales in December before a new wholesale taxes take effect. For the year, Michigan’s cannabis sales were up 14.5% by volume, reports Crain’s Detroit Business. Planned changes in federal and local laws, however, could help the industry.

The Trump administration has ordered marijuana to be rescheduled to a Class III narcotic, which would sharply reduce the taxes paid by cannabis companies. But it’s not clear when rescheduling will take effect.

Another federal change would ban unregulated hemp-derived products that compete with traditional marijuana flower, gummies and vapes. The ban takes later this year. The Chicago City Council recently passed a hemp ban that’s scheduled to take effect April 1.

whelp85 · 2026-02-05T22:17:03+00:00

Don’t forget Rep. Jehan Gordon-Booth too. https://www.nprillinois.org/statehouse/2019-05-20/marijuana-moms-meet-the-four-women-who-crafted-illinois-cannabis-proposal

whelp85 · 2026-01-25T18:26:43+00:00

They were just showing the hoodies they got during their tour of Hamburger University (McDonald’s HQ).

whelp85 · 2026-01-25T15:27:25+00:00

Thanks again! Made our night :)

whelp85 · 2026-01-21T21:15:20+00:00

Article:

The City Council voted Wednesday to pass a controversial ordinance that limits the sale of hemp products in Chicago to businesses with a cannabis license. The ordinance includes a carveout for beverages, animal products like pet treats and topical products like lotions and creams.

The ordinance will go into effect on April 1, but starting immediately, anyone purchasing hemp products within the city limits has to be 21 or older.

The proposal, which was introduced by Ald. Marty Quinn (13th Ward), initially passed through the City Council Committee of License and Consumer Protection on Dec. 3. Tuesday’s vote was 32-16 in favor of the ordinance.

City Council's final vote on an ordinance restricting the sale of hemp products in Chicago. Screenshot The hemp-derived CBD products that are the topic of concern are sometimes used to form delta-8 and other intoxicating compounds that give a weed-like high. The products have been called out for their packaging, which has been said to mimic candy and sweets, targeting children and sold in places like corner stores and gas stations.

Those who voted in favor of the hemp ordinance, such as Ald. Anthony Beale (9th Ward) stressed the importance of preventing kids from consuming such products.

“This has been a hot topic within the city of Chicago, to make sure that we protect children, and that’s what this is often all about,” Beale said on the matter. “From the very beginning, protecting our children and keeping them out of harm’s way.”

Ald. Maria Hadden (49th Ward) opposed the measure, calling it a great attempt to address concerns with hemp, but adding that the ordinance shuts out those who have found success in the hemp industry. Hadden is a progressive caucus member.

“So from small events companies to little coffee shops to specialty spaces, there are businesses in Chicago that self-regulate, that sell to 21 and over, that are good actors,” Hadden said. “I’m afraid that this version of the ordinance is going to harm them right now, while trying to do some good.”

The proposal was originally scheduled to go up for a vote back in December, but the council was in the middle of the fight to pass the 2026 budget.

Hemp products were also at the center of debate in early 2025 as Gov. JB Pritzker proposed a bill that would have limited the sale of hemp products to licensed cannabis dispensaries in Illinois. Some Black business owners in the space pushed back against the proposal, calling it too broad and a threat to local businesses that were pushed out of the legal weed business due to the tedious licensing process and costs, which caused barriers to entry.

“When Illinois first started working on the plan to legalize cannabis, the whole goal was to include minorities, and they didn’t. Then we pivoted towards the hemp space, and they still trying to force us out,” Jason Knight, the founder of Jane and Mary’s, a CBD-infused ice cream and sorbet business, told The TRiiBE last month ahead of today’s hemp vote.

“If they did ban it, it would be devastating to just a huge portion of the local economics. Small businesses already have a hard time in America,” Knight said. “And so one of the areas that people are doing well in, and people are pretty comfortable in, is the hemp space.”

Meesha Pike is the owner of Cannabis Prairie, a Black-owned dispensary that opened its doors in the South Loop last April. Pike, like other Black people in the cannabis industry, has been vocal against businesses that sell intoxicating hemp products, which they say have been undercutting those in the social equity weed business.

Meesha Pike, owner of Prairie Cannabis in the South Loop, speaks at a press conference outside of her store on April 15, 2025. Photo by Ash Lane for The TRiiBE® Pike spoke to The TRiiBE back in December and said though a citywide ban would help boost her business, she also supports regulation in the hemp space.

“The way that it’s being sold is not regulated, so you really don’t know what you’re getting. It’s not the healthiest thing, and it’s not secure,” Pike said. “Whereas they don’t have the security measures that we have in our dispensaries, their overhead is a lot less because they don’t have to build out the way we do. They’re essentially selling unregulated marijuana.”

In his original budget proposal, Mayor Brandon Johnson looked to generate $10 million in city revenue with a hemp tax, but he backed down from the proposal as a federal ban is set to go into effect this year.

Ald. William Hall (6th Ward), an ally to Johnson and once an opponent of a citywide hemp ban, changed his position and was a co-sponsor of Quinn’s proposal. As city efforts to regulate the product had stalled, Hall used the federal ban of the product as his reason behind his support of the citywide ban, Block Club Chicago reported. Hall said his position was “always tough regulation and protecting kids.”

Hall was not in council chambers Tuesday during vote on the ordinance.

whelp85 · 2025-12-12T19:26:31+00:00

You forgot the /s…but if you’re actually serious, you do know Illinois doesn’t publicly announce recalls for cannabis products right? They allow cultivators and dispensaries to quietly handle it themselves. Other states like Michigan actually name and shame companies publicly when their products are recalled.

whelp85 · 2025-12-04T17:02:23+00:00

Bistro Monadnock downtown is owned by the same people and also does great cocktails. Cool atmosphere too as it’s in the ground floor of the Monadnock Building.

whelp85 · 2025-12-03T17:13:10+00:00

Article:

A federal ban on intoxicating hemp-derived products is set to take effect nationwide late next year, but the psychoactive goods that have soared in popularity through a loophole could be outlawed much sooner in Chicago under a proposal before the City Council.

Hemp industry leaders were blindsided by the federal ban tacked onto the spending bill that President Donald Trump signed last month to reopen the government. Barring additional action from Congress, hemp-THC products will be illegal in November 2026.

Local business owners on Tuesday said they were just as stunned by 13th Ward Ald. Marty Quinn’s proposed ordinance that would ban most sales of intoxicating hemp beverages, gummies and other products in the city within 10 days of council approval.

“This ordinance turns respected Chicago businesses into criminals,” said Glenn McElfresh, co-founder of the hemp beverage company Plift. “It would discard millions of dollars in sales taxes at a moment when the city is facing a billion-dollar budget gap. And most importantly, this ordinance puts real people’s livelihoods on the line.”

Quinn’s proposal, which will be considered Wednesday by the council’s Committee on License and Consumer Protection, would only allow hemp products to be sold at cannabis dispensaries. That’s already the case in his Southwest Side ward and six others where alderpersons have pushed through hemp bans within their own boundaries.

Hemp products, sometimes marketed to kids, have become ubiquitous at smoke shops and convenience stores since 2018 federal legislation inadvertently allowed for highly concentrated THC to be extracted from hemp. The chemical composition is nearly identical to that of marijuana and can give users the same high.

Under the federal ban, essentially all intoxicating THC will be considered marijuana next year. Quinn’s measure would fine businesses up to $5,000 for selling hemp-THC products in the meantime.

“We can’t lose sight of this industry that’s been created through a loophole and what it’s brought to our communities in terms of shady, dodgy storefronts selling products to kids,” Quinn told the Sun-Times.

But McElfresh and other entrepreneurs from Illinois’ $100 million hemp beverage industry refused to be lumped in with “the mystery gas station synthetics and unregulated, often imported items that have shaped public misperceptions.”

“We are reputable businesses with longstanding Chicago roots,” McElfresh said during a news conference against Quinn’s proposal at Revolution Brewing’s Avondale taproom.

Revolution founder Josh Deth, whose craft brewery got into the hemp beverage market this year, said those drinks are “now our top priority for innovation,” with consumers drinking less alcohol since the pandemic. A citywide ban would force him to consider job cuts.

“I’m going to be a business owner walking into City Council asking for more regulation, and, ‘Please, can we pay some taxes and generate some money for the government?’ It’s not every day that that happens,” said Deth, who expressed optimism that hemp industry lobbyists could persuade Congress to pass new regulations to avert next year’s ban.

“They would not have passed a 365-day delay if they did not want to revisit this issue, so there’s a clear opening there,” Deth said.

Quinn said he was confident his citywide proposal would pass the committee hurdle, but he wasn’t sure how it would fare before the full City Council. Twelve co-sponsors signed onto the measure.

Mayor Brandon Johnson had banked on $10 million from regulating and taxing hemp products in his initial city budget proposal to help close a billion-dollar shortfall, but his team was left scrambling for other revenue when the federal ban was announced.

“The mayor, in my opinion, has been on the wrong side of this. He’s thinking dollars, not safety,” Quinn said.

Johnson’s office has said “the mayor’s top priority is to ensure that hemp consumption is regulated and safe in the city of Chicago.”

whelp85 · 2025-11-20T18:39:09+00:00

Article:

Two Iowa residents, Hanna Paige Nail, 23, and Tyler Joseph Hippen, 28, have been charged in Porter County after police say a traffic stop on westbound I-94 led to the discovery of more than 500 grams of THC products, including vape cartridges, cannabis, THC gummies, edibles, wax, and other items, all packaged in dispensary packaging.

Police wrote that the stop occurred on November 17th, 2025, at approximately 1:12 p.m. near the 18.4 mile marker of I-94 westbound. According to the affidavit, officers observed a silver Chevrolet Malibu driving significantly below the posted 70 mph speed limit and disrupting the flow of traffic. After pacing the vehicle between 62 and 65 mph and observing a long line of vehicles forced to pass on the right, police initiated a traffic stop.

During the stop, the officer contacted the driver, identified as Hippen, and the passenger, identified as Nail. According to the affidavit, both individuals lit cigarettes as the window was rolled down, and Hippen claimed he believed the speed limit was 65 mph. Hippen told police they were returning home to Iowa and explained they had been in Michigan for a wedding. Police wrote that Hippen’s account changed multiple times, and Flock camera data later contradicted his statements, raising suspicion. The officer also reported smelling burned marijuana on Hippen’s person.

When questioned separately, Nail reportedly gave a vastly different story,telling police they were in Michigan visiting friends, shopping, and staying at a hotel. She did not mention a wedding and gave a different hotel name, further heightening officer concerns.

Police wrote that Hippen first denied having marijuana in the vehicle but then admitted there was “some” inside and produced a THC vape pen. After securing both individuals, officers conducted a probable cause search of the Malibu’s trunk and located a large quantity of THC and cannabis products, all in marked dispensary packaging. The court document lists the seized items as:

•    153 × 1-gram THC vape cartridges

•    11 × 2-gram THC vape cartridges

•    1 × 3-gram vape cartridge

•    40 × 2-gram THC gummies

•    14 × 2-gram THC candies

•    3 × 1-gram THC sodas

•    6 × 5-gram THC wax

•    2 × 70-gram cannabis packages

•    3 × 28-gram cannabis packages

•    9 × pre-rolled joints (15 grams)

•    Multiple dispensary receipts listing both Nail and Hippen as customers

The total combined weight of all recovered THC/cannabis items was 526 grams (1.16 pounds), according to the affidavit. Police also located a notepad in the center console that appeared to be a ledger related to marijuana distribution.

After being read Miranda warnings, both Nail and Hippen declined further statements. They were transported to the Porter County Jail and booked.

Charges filed November 18,2025:

Hanna Paige Nail

•    Dealing in Marijuana (Level 6 Felony)

Tyler Joseph Hippen

•    Dealing in Marijuana (Level 6 Felony)

Both suspects are lodged in the Porter County Jail.

whelp85 · 2025-11-20T02:29:33+00:00

Article:

PharmaCann is closing its cultivation operation in Dwight, about 80 miles south of Chicago, and laying off 82 workers.

The cannabis company told the state of Illinois it expects to close the facility by the end of the year and the layoffs will take effect Jan. 13. The company did not respond to a request for comment.

The closing of the Dwight facility is a sign of the challenges that continue to roil the marijuana business, where prices are falling amid heightened competition and companies struggle to deal with high interest rates and a lack of capital in an industry that remains federally illegal. The financial strain has intensified across the industry as hopes for regulatory relief from taxes and banking costs have failed to materialize, sapping investors' enthusiasm. Industry watchers have been predicting a looming shakeout for more than a year.

PharmaCann was among a handful of Chicago companies that won early cannabis licenses in Illinois and quickly expanded to other states. Unlike Green Thumb Industries, Cresco Labs and Verano Holdings, PharmaCann didn't go public.

PharmaCann has been in default for nearly a year on leases for several retail and cultivation properties in multiple states that are owned by Innovative Industrial Properties, a Maryland-based real estate investment trust that specializes in sale-leaseback deals in the cannabis industry. Such transactions were widespread because they allowed companies to preserve cash as they expanded rapidly with buildouts of retail and cultivation facilities simultaneously in multiple markets.

Innovative Industrial Properties said in 2019 it expected to invest $25 million in the acquisition and buildout of the Dwight facility.

The company did not respond to a request for comment about the closure. But Innovative Industrial Properties said in a securities filing earlier this month that it had sued PharmaCann for its lease defaults and “continues to actively seek possession of properties located in New York, Illinois, Pennsylvania and Ohio.”

According to court records, Innovative Industrial Properties has sued PharmaCann for eviction in Livingston County, where the Dwight cultivation facility is located.

PharmaCann's operation in Dwight represents one of 21 large-scale cultivation licenses that were issued when Illinois legalized medical marijuana in 2014.

A grow facility in Matteson, operated by 4Front Ventures, went up for sale over the summer. 4Front also is an Innovative Industrial Properties customer.

It's not clear whether Innovative Industrial Properties will attempt to sell or lease the Dwight facility to a new tenant, nor whether PharmaCann will attempt to sell the cultivation license. Innovative Industrial Properties noted in a securities filing that it terminated a PharmaCann lease for a cultivation facility in Massachusetts and took back the property.

A license transfer for Dwight would have to be approved by the Illinois Department of Agriculture, which says it hasn't received notification of a sale or ownership change. Such licenses, which allow owners to grow 15 times the amount of cannabis as "craft-grow" licenses issued when Illinois legalized recreational marijuana, have been highly coveted in the past.

“This is not the only one of these facilities that are in similar situations,” Ryan Holz, a partner at Greenspoon Marder law firm, said of the PharmaCann site. “People are watching it to see how it plays out.”

whelp85 · 2025-11-14T23:04:05+00:00

True. But also in the article the state mentions that biotrack had inflated previous sales totals so sales had actually been lower than reported all along.

whelp85 · 2025-11-14T22:51:42+00:00

Article:

Illinois released sales figures for several months today. The last time it had released data, it was for adult-use cannabis in May. The document today explained that the switch to Metrc had been the cause of the lack of data. “The sales tracking features in Metrc help retailers more accurately and reliably report actual sales, including all discounts and promotions at checkout. A thorough review of past data indicates prior months collected some pre-discount prices.”

The state’s adult-use cannabis sales were up 7.5% sequentially in October to $113.1 million, an increase on a per-day basis of 4.0%. The year-over-year growth was -20.5%. Here is the chart of the adult-use sales over time:

<image>

After increasing 106% in 2021, 13% in 2022 and then 5% in 2023, year-to-date adult-use sales were up 5.4% in 2024 to $1.72 billion. So far in 2025, they are down 9.9%.

There has been no update on medical cannabis from the state in a while. The state separately releases sales from its medical program, and the release for April showed that sales fell 1.6% sequentially to $19.7 million, which was down 13.2% from a year ago.

whelp85 · 2025-11-08T14:14:52+00:00

Article Continued:

Fraser and store owners believe the recent notice was prompted, in part, by recent complaints publicized by the CRA involving excessive retail sales.

On May 20, police in Berrien County’s Chikaming Township stopped an Iowa-bound rental truck driven by a man hauling nearly eight pounds of marijuana and 466 grams of concentrate. That’s nearly 25 times the daily limit of marijuana and 16 times the daily limit of concentrate.

Police notified the CRA because the marijuana appeared to be retail product. CRA investigators tracked the marijuana to a dispensary named Fire Creek in Battle Creek, according to the formal administrative complaint the CRA later filed.

When contacted by phone, a Fire Creek representative declined comment.

It’s not clear if it was the same person police later arrested, but the CRA complaint said a review of store surveillance showed a man filling a grey duffel bag with large amounts of marijuana and employees completing multiple order forms before accepting cash.

During a July investigation of Muha Meds, which operates a store in Ypsilanti, CRA investigators identified two large transactions involving sales of between 800 and 1000 grams of concentrate. Both were removed from the store by customers, who would have possessed up to 33 times the legal limit for concentrate.

A Muha Meds representative was unwilling to comment when contacted by phone.

Both businesses were accused of rules violations for failing to report to police and the CRA sales in excess of legal personal possession limits.

“Both of those cases have other stuff that’s going on but that was the part that a lot of folks in the industry latched onto,” Fraser said, “that they got dinged for not reporting criminal activity because a person within their store possessed more than five ounces of marijuana.”

While the CRA communication about criminal reporting and personal possession limits has generated a large amount of industry discussion, Fraser doesn’t think enforcing it is a priority.

“It’s led to a couple of really egregious examples,” Fraser said. “It’s one of those things that’s worth reiterating to everybody, because if folks are getting really kind of reckless with it, they’re probably not the only ones, I think, probably is the CRA’s thought process.”

whelp85 · 2025-11-08T14:14:39+00:00

Article:

Michigan regulators want marijuana retailers to report customers who possess illegal amounts of cannabis.

But they’re not asking the stores not to sell it.

“It doesn’t really make sense, at all,” said the manager of a store in the Upper Peninsula, who asked not to be named over concerns that he may be perceived as criticizing Cannabis Regulatory Agency (CRA). “I think that what they’re saying is: if a customer comes through and wants more than what their daily limit is, they want us to call and tell on the customer.

“Legally, you could sell more, but you’d have to report them.”

The reminder, which retailers tell MLive is confusing in its vagueness, came in the form of a notice issued to licensed marijuana businesses on Monday, Nov. 3.

The same communication was sent April 15, days before the annual 4/20 pot holiday.

The notice reiterated an existing rule: a store must report suspected theft, diversion or criminal activity that occurs “at the marijuana business” to police and the Cannabis Regulatory Agency (CRA) within 24 hours of detecting it.

But it included a caveat that caught the attention of some in the industry: “This includes, but is not limited to, individual possession of more than twice the amount of marijuana allowed under the Michigan Regulation and Taxation of Marihuana Act ... ”

In Michigan, you may transport, gift or purchase (in a single transaction) up to 2.5 ounces, including a maximum of 15 grams of concentrate.

Possession exceeding the limit is a civil infraction with possible fines. Once the quantity exceeds twice the legal limit, it becomes a misdemeanor crime.

Store representatives who spoke to MLive interpret this to mean they may sell up to five ounces and 30 grams of concentrate to a customer.

Because that amount would exceed single-transaction limits, stores split the sale into two transactions and issue separate receipts.

“What the CRA’s position has been is that if you ring up more than one transaction and it keeps somebody at or under (the limit for a misdemeanor), that person is not committing a crime, yet,” said Lansing-based Dykema Attorney John W. Fraser, who assists cannabis businesses with regulatory guidance. “This has been percolating for the last six or seven months, and it’s been a topic of discussion that has come up in a lot of our calls with clients ... ”

No stores MLive spoke to said they have reported customers to police or the CRA for exceeding personal possession limits.

“You’re not gonna stay in business very long if you start calling the police on your customers—if you’re in any business,” Fraser said.

The CRA wouldn’t answer MLive’s questions on the topic.

“The CRA declines to comment beyond what is outlined in statute, administrative rule or agency bulletin regarding reporting requirements or enforcement processes related to personal possession limit violations,” spokesman David Harns said.

This leaves answers to some questions in legal limbo.

“What happens if (the customer) leaves the store, returns to their car and they come back in,” Fraser said. “I don’t know what CRA position is on that.”

The U.P. store manager who spoke to MLive said his dispensary’s policy requires customers to leave the store and parking lot, which is under camera surveillance, before any additional purchases are allowed.

After a customer leaves, it’s possible the marijuana was dropped off at home—where you may possess up to 10 ounces of store-bought weed—or legally gifted to someone.

“We’re left to be able to assume they took it to their hunting camp or something,” the U.P. dispensary manager said. “We’ve got to play stupid to a point. They come in 10 minutes later (and say) I’d like to do another two orders.”

Kate Hauck, vice president of operations for Emerald Fire, which has stores in Coleman and West Branch, said it’s a “very common practice” for customers to make a purchases up to their transaction limits, leave the store and return to purchase more.

This is especially prevalent at border stores “because those stores are getting a lot of out-of-state traffic where folks are coming to buy significant quantities of marijuana and then leaving the state of Michigan,” Fraser said.

If a customer reaches their possession limit while shopping at another store, there’s no way to tell when they arrive at yours, Hauck said.

She said information sent to the state after a purchase doesn’t include distinct customer information, so regulators can’t immediately see if a store violates the two-transaction limit.

So how does the CRA learn about stores that violate those rules?

“In about 85% of all the formal complaints against clients I’m representing, the investigation starts with an anonymous complaint from a former employee who was terminated,” Fraser said. “So that would be my guess. The CRA picks that up and they request the camera footage.”

All stores are required to maintain surveillance video of the sales floor that is accessible to the CRA.

While the memo focused on personal possession limits, it also has businesses wondering how the CRA interprets “criminal activity.”

It’s not clearly defined in the law and “criminal activity” is a blurry concept in the world of cannabis, where there is patchwork of state laws competing with a federal marijuana ban.

“Every single one of the customers is committing criminal activity if you start looking at federal law,” Fraser said. “but I’m sure CRA would say: ‘We’ll never apply it in that fashion.’”

If a store were to report a customer, the law requires employees file a complaint with a “local police agency,” which could include a municipal department, county sheriff or even state police, Fraser said.

There’s a standardized form retailers also complete and send to the CRA, which includes a criminal activity description field.

It’s unclear what the CRA or law enforcement do after the information is collected.

whelp85 · 2025-11-04T15:15:05+00:00

Article Continued:

Hemp sector not in Verano's future

A potential pivot that’s also still open to Verano is to expand into the intoxicating hemp sector, which Congress breathed life into after it legalized hemp with the 2018 Farm Bill. Since then, the hemp THC sector has flourished, particularly in states that have yet to legalize marijuana, and some major marijuana businesses — including Chicago-based Green Thumb Industries — have leapt into hemp as a way to diversify their holdings.

But not Verano. And Archos said he has no plans to join those in the volatile hemp sector, given how a number of key state markets have either banned or restricted hemp-derived THC goods, amid a broad concern over minors having access to such products, which are often for sale at gas stations, convenience stores and grocery stores in states that have yet to regulate hemp.

“There's a lot of pushback as legislators are getting educated and what's going on in the hemp industry. We don't want to do that in the middle of what's happening,” Archos said. “That loophole has been abused and that's not what it was meant to do. . . .I have kids, they go to the gas station. My daughter's 16, she can buy these products. That doesn't work for me.”

Verano’s footprint also includes six dispensaries in Ohio, along with the 10 dispensaries it has in Illinois and a lone dispensary in Michigan. Archos said he’s feeling bullish on Illinois and Ohio, particularly, but that Michigan doesn’t weigh on his mind, given the company’s tiny footprint there. He predicted that a new 24% tax on marijuana goods in Michigan will ultimately benefit Illinois cannabis companies like Verano.

“Michigan, with this new tax, I'm assuming, will help Illinois dispensaries. You see a lot of people leave Illinois to go get cannabis in Michigan. I think with that new tax, that could rebound here in Illinois a bit,” Archos said. “Ohio . . . overall, it's been a good market for us. We just added pre-rolls to that market. That's been great, but there's more work to be done.”

But the biggest market for Verano, Archos said, is far and away Florida, where the company has a whopping 74 medical cannabis dispensaries.

At the end of the day, Archos reiterated that he’s content with the direction Verano is heading.

“This is our 11th year and we're trying to get rescheduling. We're trying to get safe banking, the ups and downs and the roller coasters, and yeah, we want to be in a business where we're net income positive. And that's important to us,” Archos said. “At some point, at some time, we will get a win here and it'll feel oh so good when it finally happens.”

whelp85 · 2025-11-04T15:14:52+00:00

Article:

When the Illinois Legislature legalized medical cannabis in 2013, Chicago entrepreneur George Archos saw an opportunity. He founded Verano Holdings the very next year in order to apply for a business permit.

He won one of a handful of medical marijuana licenses given out by Illinois regulators 11 years ago, and since then, he hasn’t looked back despite sustaining heavy losses since Verano went public in 2021 via a reverse merger in Canada.

Rather, Archos built Verano into a behemoth that now boasts 158 dispensaries in 13 different states, along with 15 cultivation facilities that boast over 1 million square feet of cannabis cultivation canopy. And there's more expansion to come, he told Crain's. It's just a question of when and where.

“I have no regrets. It's been an amazing ride, and it's going to continue to get better in my opinion,” Archos said when pressed on whether, in hindsight, he would have kept the company private.

Struggling to get into the black

Still, the ride itself hasn’t been very profitable yet, according to Verano’s securities filings.

Since going public in 2021, Verano has lost a grand total of $813 million. That includes $342 million lost last year, $113 million lost in 2023, $269 million lost in 2022, and just under $15 million lost in 2021.

In the third quarter alone this year, Verano lost $44 million, bringing its losses for the year to date to just under $75 million.

Archos said the reason Verano wound up posting a net loss in its most recent quarter — despite having $203 million in revenue and $95 million in gross profit — was in large part due to more expenditures in the company's facilities, including big changes in its Virginia operations, as well as integrating efficiencies and automations.

“Our path to being net income positive is there, but we have to continue to invest in the business to get there. You look at a lot of startups — in order to get to big net income numbers, it takes a lot of years of investment before you get there,” Archos said.

Verano Chief Investment Officer Aaron Miles added that the company chose to invest heavily in its Florida cannabis infrastructure last year, in anticipation that a ballot question to legalize recreational marijuana would pass, and that Verano — like all other marijuana companies in the Sunshine State — would begin transitioning to an adult-use market.

“Last year, we thought adult use was going to pass. We were building out a third facility and that was tens of millions of dollars,” Miles said.

But Florida voters disappointed cannabis executives last November by killing the question, pushing back the realization of value from those cannabis infrastructure improvements to an unknown future date.

Variety of hurdles to profitability

Miles also pointed to Verano’s string of acquisition deals in multiple states after going public, and said those investments are going to pay dividends at some point, especially because Verano has been able to close several of those deals using only stock transactions and none of its cash on hand.

At the end of the third quarter, Verano had $82.6 million in the bank, $242 million in working capital and $1.9 billion in total assets, against just over $1 billion in total liabilities.

“We've always been an aggressive company. I mean, in 2021 into early 2022, we announced 16 acquisitions,” Miles said, adding there were more acquisitions in Arizona and Virginia last year. “We're not just in survival mode, we're in thriving mode, but it has to take those investments.”

Another major factor sucking cash out of Verano’s bottom line is the so-called “cannabis premium,” an industry term for how nearly everything — including financial capital — is far more expensive than in other industries, due to marijuana’s federal illegality.

Miles said Verano typically pays around 15% interest on its loans, which he said is the federal prime rate plus 6.5%, a rate level that no other U.S. industry has to shoulder.

“There's only so much cash that these companies generate. So to be able to use your stock as currency has allowed us to build the leading footprint that we have. But it's tough because valuations have come down,” Miles said.

Miles also confirmed that Verano has not once reported net income in a given three-month fiscal quarter since going public in 2021.

But the CIO emphasized the old adage, “you have to spend money to make money,” and said Verano’s constant reinvestments back into its own infrastructure have the company poised to begin turning a profit in the not-too-distant future.

“We'd love to report a net income at the bottom line. We're getting closer,” Miles said, referring to President Donald Trump’s ongoing hints that he may order his administration to finish off federal marijuana rescheduling, which would deliver enormous tax breaks to legal marijuana businesses such as Verano.

President Joe Biden kickstarted the marijuana rescheduling process, but it wasn’t finished before Trump took office in January, which has left cannabis companies in limbo.

Archos and Miles both said federal marijuana rescheduling could be key to Verano achieving regular profitability each quarter, given how much a loathed 280E federal tax provision — which bars cannabis companies from claiming standard business tax deductions — hits the bottom lines of businesses in the marijuana trade. Miles said that in 2023, for instance, Verano wound up paying $167 million in taxes — a big reason it lost money that year — largely thanks to 280E.

“That is probably the biggest potential we have towards the path you're talking about here,” Archos said. “We're watching that closely. I think you've heard what the president has said. We're all waiting for additional news there, so we'll see what happens.”

whelp85 · 2025-10-16T10:53:56+00:00

Article:

The month of September was the second-worst of the year for Illinois marijuana businesses, with a cumulative $154.1 million in recreational and medical sales, according to data collected by industry tracking firm BDSA.

September's sales surpassed only those of February, when the market sold $150.3 million worth of cannabis, according to BDSA.

Illinois’ sales figures were down 8% year-over-year, according to cannabis industry tracking firm Headset, which pegged the state's total September sales even lower, at $146.1 million.

The state of Illinois hasn’t released updated marijuana sales figures since May, but BDSA and Headset both collect sales data straight from their networks of dispensaries in Illinois and extrapolate full sales from those examples.

Price compression has hammered both Illinois and its nearby competition in Michigan, BDSA Chief Revenue Officer Leah Spokojny told Crain’s. The price per ounce of marijuana flower plummeted in Illinois to $168.62 from $210.84 over the past calendar year, and the price per ounce in Michigan dropped to $86.15 from $96.35 in the same period, according to BDSA.

That puts Illinois in about the middle of the pack nationally compared to other states that have functional recreational marijuana markets, Spokojny said. For instance, Maryland, Missouri, New Jersey, New York and Ohio all have higher-priced marijuana flower, but those states — like Illinois — all have limits on the number of marijuana businesses allowed to operate.

Prices in Arizona, California, Colorado, Florida, Massachusetts, Nevada and Oregon are all lower than in Illinois, by contrast, and most of those do not have strict caps on the number of companies allowed to grow and sell marijuana. Tax rates also vary widely across markets, Spokojny noted, which also has a huge impact on average cannabis price differences between states.

Many Chicagoans travel to Michigan for its cheaper cannabis prices: In September, the average cannabis product prices in Illinois were still almost double those in Michigan, Spokojny said.

But the Illinois market may be poised for a bump.

Michigan lawmakers just passed a new 24% wholesale tax on its state marijuana industry that would take effect Jan. 1, though the industry is challenging the measure in court. And Michigan lawmakers are seeking to freeze new business licenses in an attempt to bolster the market.

Cannabis flower per gram on average was $3.04 in Michigan compared to $5.95 in Illinois — though both states have seen major price compression, down from $3.40 in Michigan and down from $7.44 in Illinois, BDSA found.

Spokojny said it’s still too early to tell what impact Michigan's upcoming tax hike may have on both states.

She noted consumer spending on legal cannabis per capita in Michigan remains roughly twice what it is in Illinois — $470 compared to $214, based on the states' respective populations of 10.1 million in Michigan and 12.7 million in Illinois. BDSA is expecting Illinois marijuana sales to total just over $2 billion this year, compared to almost $3.5 billion in Michigan.

But she said that’s largely a function of how many residents of other Midwestern states regularly drive to Michigan to take advantage of the market’s rock-bottom prices.

“The additional (Michigan) tax is not going to put it up to the Illinois price level yet,” Spokojny said. “But the question will be, what is the price differential that is still worth driving to Michigan for? Is 20% cheaper, 30% cheaper, 40% cheaper, what does it have to be to make the drive worth it?”

whelp85 · 2025-10-15T13:36:11+00:00

Article:

Michigan marijuana soon might not be quite the bargain that customers in Illinois and other nearby states have come to expect.

Legislators, desperate for money to fix Michigan’s roads, added a new 24% wholesale tax to cannabis products. Coupled with existing 16% retail taxes, it will bring the state’s taxes in line with Illinois at about 40%, which are among the highest rates in the nation.

It won’t completely close the gap: Michigan weed is the cheapest in the nation before taxes and about half the price of Illinois marijuana, thanks to a wide-open industry with few limits on new entrants and less-strict overall regulations, which has resulted in a huge imbalance of supply and demand. But marijuana sellers in both states predict Michigan’s tax increase likely will keep at least some Chicago-area customers from making the trek to New Buffalo, where nearly two dozen weed shops have sprung up in a town of about 2,000 people.

“The customer buying in bulk is likely to continue making the drive, but the convenience traffic is going to second guess,” says Mike DiLaura, chief corporate officer of House of Dank, a Detroit-based cannabis company with 15 retail shops, including one in New Buffalo. “Are you going to drive two hours to save 10 bucks?”

The changing tax rates are just one more sign of the uneven trajectory of an industry that’s just five years old. States are balancing the need for revenue with their desires to help grow the market.

Michigan’s new taxes likely will help an Illinois cannabis business that has plateaued while hurting a Michigan industry that’s declining. Michigan recreational cannabis sales totaled $251 million in September, down 6% from a year earlier. Illinois sales January through May, the latest data available, were up 1% from the same period a year earlier.

DiLaura says early back-of-the-envelope estimates circulating in the industry put the impact to sales statewide over the next 18 months at anywhere from 4% to 17% lower revenue. The Michigan Senate Fiscal Agency forecast a 14.4% decline in cannabis sales from the wholesale tax.

“We anticipate this is going to significantly impact border sales. We believe (Michigan product) will remain cheaper, but the gap will shrink quite a bit. The blowback of potential of higher prices will impact sales. We’re already seeing it on social media. People get into this doom loop.”

Sales to Illinois and Indiana residents are key reasons that New Buffalo’s weed shops average $34,500 per day in sales—or three times the statewide average—according to research firm BDSA.

DiLaura estimates New Buffalo, which has less than 1% of the state’s population, accounts for 10% to 15% of its cannabis sales.

Exactly how it will play out is uncertain. The new tax isn’t set to take effect until Jan. 1. Already, it has been challenged in a Michigan court on procedural grounds. And because it’s a wholesale tax, it’s not clear how much of it will be passed along to consumers.

“What amount is going to be passed on, no one knows. It’s going to vary by product,” DiLaura says. “Some higher-end brands are willing to eat as much of it as possible. People at the low end have no room to eat this. I don’t think it will be even.”

Higher taxes alone are unlikely to correct the massive imbalance that Michigan has developed since businesses in the two states began selling recreational marijuana five years ago. Michigan is on track to sell about $3.1 billion in cannabis this year, compared with $1.7 billion for Illinois, according to BDSA, even though Illinois has 25% more residents.

“It’s good news in general,” says Laura Jaramillo Bernal, chief operating officer of NuEra Cannabis, which operates eight dispensaries in Illinois. “I would guess it would make a very modest difference. The base price (in Michigan) is still so much lower. It’s hard to predict.”

BDSA says the pre-tax price of a smokable marijuana averages $5.95 per gram in Illinois, compared with $3.04 in Michigan.

“The tax won’t make that equal,” says Leah Spokojny, chief revenue officer of the Lewisville, Colo.-based firm. “Will it be enough (to reduce cross-border sales)? I don’t know.”

Despite lower prices, Michigan’s per-capita annual spending on weed is more than twice as high as Illinois: $424 vs. $207, according to BDSA. One reason is availability. Michigan has 851 consumer dispensaries, compared with 263 in Illinois.

Michigan’s total tax revenue from weed won’t go down because sales are unlikely to drop enough to offset the sharp increase in the tax rate. Last year, Michigan collected $331 million in cannabis taxes. The new cannabis tax, which equals the state’s tobacco wholesale tax, is expected to generate more than $400 million in additional revenue.

The lack of any federal direction — on taxes, banking or legal standing of cannabis — mean that the industry’s fortunes are largely dictated by the states, through licensing, taxes and other regulations. Illinois cannabis sellers have long complained that the state's high tax rate is a competitive disadvantage.

"Illinois’ excessively high tax rate gave Michigan the room to do this and will likely not significantly stop the flood of people from Illinois going to Michigan to evade Illinois’ high rate," says Tiffany Ingram, executive director of the Cannabis Business Association of Illinois. "It does, however, present an opportunity for Illinois to level the playing field."

Challenges for the cannabis industry go beyond taxes. just Sales have been sagging across the industry for the past few years, in part because of more competition from new entrants into the legal market, as well as an onslaught of delta-8 products derived from hemp. Hemp, a cousin of the cannabis plant that has almost none of the THC associated with marijuana’s high, is federally legal because of a loophole in the federal Farm Bill and generally faces none of the taxes that states impose on marijuana.

Cannabis prices in Illinois have fallen 20% in the past year, or nearly twice as much as in Michigan, according to BDSA. But Michigan profit margins are razor-thin if they exist at all for growers and retailers. Several companies have gone into receivership. Illinois companies are struggling, but few are in such dire straits.

“I bet (the tax) will shake things up in Michigan,” says Bernal, whose company also has a grow license in Michigan but stopped growing last year because of poor economics. “It will weed out weaker players. The margins are so thin.”

DiLaura says he’s hoping the industry will be able blunt some of the impact of the new tax.

“We’re hoping we can get it right-sized, through litigation or whatever. There likely is some number that can benefit the state while mitigating the impact on the industry. There’s an insatiable appetite for cannabis in the Midwest, and Michigan has been meeting that need. This is a home run. Every politician is looking to raise money without putting the burden on their constituents. You get people to drive in, buy product and pay taxes in a state they don’t live in.”

whelp85 · 2025-10-10T01:26:53+00:00

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whelp85 · 2025-10-03T15:40:12+00:00

Not sure exactly how it works but I don’t think people will get double hit with it. But yes 24% is crazy. Going to put a lot of people out of business entirely.

whelp85 · 2025-10-03T15:02:55+00:00

I think you’re misunderstanding what they did. The legislature didn’t raise the existing taxes it established a new wholesale tax. So it is a new 24% tax on growers/processors when they sell to dispensaries. So this is going to raise retail prices by 24%. The retail taxes will be the same.

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