Illinois Records Highest Monthly Cannabis Sales of 2023: Highlights Market Dynamics and Equitable Growth
July marked a significant milestone for the cannabis market in Illinois, as it recorded its highest monthly sales of the year at a remarkable $140 million. This achievement places July's figures as the second-highest ever recorded in a single month. Notably, a majority of these sales, totaling $104.3 million, were made by in-state residents.
This substantial July performance closely followed the previous record set in December 2022, where $143.9 million worth of cannabis products were sold. In this latest instance, Illinois cannabis retailers successfully generated $140 million in sales during July, marking the most substantial monthly revenue for 2023 thus far. The lion's share of these sales, amounting to $104.3 million, was made by local residents, while out-of-state customers contributed an additional $35.6 million in purchases, as reported by the Illinois Department of Financial and Professional Regulation.
Notably, experts have attributed a significant portion of the out-of-state purchases to neighboring Wisconsin, which has been left in a unique position due to Minnesota's recent legalization of marijuana, rendering Wisconsin an "island of prohibition" in the region.
The July sales achievement also holds a place in historical context, ranking as the second-highest monthly sales in the state. This impressive feat follows closely behind the $143.9 million worth of cannabis products sold in December 2022. Throughout the entirety of 2022, Illinois cannabis sales amassed a grand total of $1.5 billion.
The momentum in the cannabis market is further underscored by the volume of products sold. In July alone, a staggering 3.5 million cannabis items were purchased—the highest monthly count since the commencement of the legal recreational cannabis program in 2020. To provide a comparison, the previous record was held by December 2022, with 3.4 million items sold.
The aggregate cannabis sales for 2023 have now reached $924.4 million. A recent report has also shed light on the pricing landscape in Illinois, indicating that pot prices in the state are notably higher compared to the national average. This distinction has positioned Illinois as the third-largest cannabis market, trailing only behind California and Michigan.
Insights from Headset, a company specializing in tracking cannabis dispensary point-of-sale data, have revealed that the average price per cannabis item in Illinois is a striking 89% higher than the average in the rest of the United States.
A unique aspect of the Illinois cannabis market is its relatively modest number of distinct brands—merely 118, in contrast to Washington state's 1,000 and Michigan's approximate 800. This limited brand selection has led to a scenario where sales are concentrated within a select few brands. In fact, around 68% of Illinois' cannabis sales can be attributed to the top 10 brands within the market, as highlighted by Headset's analysis.
The study suggests that the state's high level of vertical integration combined with its restricted brand selection contributes to the maintenance of relatively elevated prices.
The cannabis industry in Illinois has witnessed an explosive surge since the legalization of recreational marijuana purchasing in 2020. John R. Daley, President of Daley Strategy Group, a consulting firm involved in the cannabis sector, emphasizes the positive returns that current stakeholders and investors are experiencing within this flourishing industry. However, Daley also stresses the importance of continuing efforts to ensure equitable access to ownership for marginalized communities, thereby rectifying the historical impact of the unsuccessful war on drugs. He expresses optimism in finding a more inclusive and effective path forward.
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