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* Nevada population: 3,056,824. Illinois population: 12,768,320. Keep that in mind…
Nevada regulators and industry insiders say the state’s first year of broad marijuana legalization has exceeded even their highest expectations, with sales and tax collections already surpassing year-end projections by 25 percent.
Numbers from June are still outstanding but are expected to push taxable sales past $500 million, netting total tax revenue in the neighborhood of $70 million — with about $25 million devoted to schools. […]
A legal battle over distribution licenses made for a rocky start last July, but Nevada’s $195 million in sales for the first six months dwarfed the totals in Washington state ($67 million) and Colorado ($114 million) for the first half-year of legal sales in those states in 2014. And so far, there’s no sign legal sales that began in California on Jan. 1 have cut into business in neighboring Nevada, regulators say.
$195 million in sales in the first six months and $300 million in the second half. Extrapolate that out and we might be looking at ≈$2.4 billion in annual sales here. Or not. There could be some differences. They have a lot of tourists there (although no public consumption is allowed, according to the article).
The resulting tax revenues won’t totally solve any problems, but they won’t hurt, either.
* The Question: What do you think Illinois should do with marijuana tax revenues if legalization is ever approved? Don’t forget to explain your answer, please. Thanks.
posted by Rich Miller
Friday, Aug 3, 18 @ 2:04 pm
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Pay off the vendors we’ve borrowed from first, then pay off the unfunded pension liability. If there’s anything left after that, increase education funding.
Also, Nevada’s population is much lower, but I suspect a great deal of marijuana sales are associated with its huge tourism industry. What happens in Vegas, etc.
But that’s even more reason for Illinois to get in the game. Chicago attracts a very large number of tourists, and there is no reason not to take their money.
Comment by 47th Ward Friday, Aug 3, 18 @ 2:08 pm
Pay off overdue bills. Then throw it at the pension and all other state employee costs. Free up the other tax revenue sources for everything else. That way other taxpayers can quit looking at state employees as leeches.
If it ever exceeds that, then roads. Maybe eliminate tollway.
Comment by Thoughts Matter Friday, Aug 3, 18 @ 2:11 pm
Ditto 47th Ward. No need to start up some more programs to then welch on. Pay down the debt.
Comment by Anonymous Friday, Aug 3, 18 @ 2:13 pm
Pay down our backlog of bills, then pension debts. The use other revenue for property tax reform. Property Taxes are too high!!
Comment by The Honorable Friday, Aug 3, 18 @ 2:15 pm
Education.
IL and NV both have 5 border states. But NV has very little population near their border. IL on the other hand is easily reached (and visited) by most of the population in those 5 states, plus SW MI, S MN, and so on. Whoever goes first in the midwest is going to benefit.
Comment by Blue Bayou Friday, Aug 3, 18 @ 2:21 pm
Illinois’ sales tax rate on Food and Drugs is 1.75%. That rate applied against an estimated $2.4 billion in gross sales would yield $42 million in incremental State revenues.
That is a rounding error.
Comment by Occam Friday, Aug 3, 18 @ 2:21 pm
Say it with me: G! R! F! G! R! F!
Comment by A Young Person Friday, Aug 3, 18 @ 2:24 pm
Pay off past due bills and get pension debt under control, if there is any left fully fund our schools and universities.
Comment by Uncle Ernie Friday, Aug 3, 18 @ 2:24 pm
===1.75%. That rate applied against===
LOLOL
You really think that’ll be the tax rate on pot? Sorry, but are you stoned?
Comment by Rich Miller Friday, Aug 3, 18 @ 2:25 pm
Pay the stolen step increases with interest. The money has to come from somewhere.
Comment by Anon Friday, Aug 3, 18 @ 2:25 pm
Capital bill - it’s effectively a replacement cigarette tax so there’s quasi precedent. Also, the distributive network, travel to and from for distributors and customers will put wear and tear on roads. Finally, the gas tax is becoming less and less reliable so we need a replacement.
Comment by Conn Smythe Friday, Aug 3, 18 @ 2:25 pm
Pay off all past due bills to vendors. Apply half of the rest to pension fund. Use the rest to fund services to people with Developmental Disabilities and eliminate the waiting list. Nothing for schools.
Comment by NeverPoliticallyCorrect Friday, Aug 3, 18 @ 2:29 pm
Retail marijuana is subject to the following taxes:
- 15 percent excise tax on the wholesale sale; paid by the cultivator
- 10 percent excise tax on the retail sale; paid by the retail store
- Retail sales tax at the local rate
from: http://marijuana.nv.gov/Businesses/Taxes/
Comment by Joe M Friday, Aug 3, 18 @ 2:30 pm
In order to be solvent, any person, business, entity, state, whatever, has to pay down or eliminate debt.
Once that’s done, then you invest in what will give you the greatest return. To me, that’s education–K-12 and higher.
After that, I don’t care.
Comment by Steve Rogers Friday, Aug 3, 18 @ 2:30 pm
Pay down backlog. Once repaid, 1/3 to pensions, 1/3 to capital plan fund, 1/3 education (per student increase).
Comment by lakeside Friday, Aug 3, 18 @ 2:32 pm
Pension costs are the elephant in the room. That’s where every penny should go.
Comment by Telly Friday, Aug 3, 18 @ 2:32 pm
==You really think that’ll be the tax rate on pot? Sorry, but are you stoned?==
The Illinois Compassionate Use of Medical Cannabis Pilot Program Act requires licensed physicians to be the gatekeeper for access to medical cannabis. The legalization of marijuana is positioned based upon its medical “benefits”. Its distribution is strictly controlled through licensed facilities.
The bottom line is that its no different than any other pharmaceutical being prescribed today. Why should it be taxed differently?
Comment by Occam Friday, Aug 3, 18 @ 2:33 pm
For the first 25 years, I suggest 10% of revenue be given to in State universities and research centers to study cannabis for patentable medical and hemp industrial purposes. Make loan and Grant money available for training and decorting equipment to establish hemp based plastic foundries to supply the automotive industries.
Comment by Al Friday, Aug 3, 18 @ 2:34 pm
Adding: re: Vegas vs. Chicago tourism. I was in Oregon for a conference last year, and we got 10% off with our badge at the dispensary across the street. They did not seem to lack for business.
Comment by lakeside Friday, Aug 3, 18 @ 2:34 pm
Pay as much past due obligations as possible. Then for future money strike it he grand bargain tax swap real estate tax relief for state actually funding schools and use legalized betting too
Comment by DuPage Saint Friday, Aug 3, 18 @ 2:37 pm
Legal MJ would be a boon to Illinois, allowing us to restore cuts in Education and Human Services. I can only imagine the additional revenue from Lollapalooza alone.
Comment by Jocko Friday, Aug 3, 18 @ 2:39 pm
==You really think that’ll be the tax rate on pot? Sorry, but are you stoned?==
Even if his rate were correct (you’re right, it’ll be higher), we should still get more money whenever we can do so in a way that makes society better, which legalizing weed would do.
Comment by Chris Widger Friday, Aug 3, 18 @ 2:39 pm
Agree with the paying down debt and pension liabilities, but a significant portion should also go to municipalities and counties to support public safety (including helping pay down their pension debt).
Comment by Dance Band on the Titanic Friday, Aug 3, 18 @ 2:42 pm
To pay down debt, not new services. If that’s the backlog, or the pension, or both, whatever. After we take off that anvil from around our necks, or at least make it much smaller, we can talk about more than treading water on roads and education, higher or grade school.
Comment by Perrid Friday, Aug 3, 18 @ 2:44 pm
Occam, I believe if you multiply that income by a factor of 10, you would get… $420 million ….
Comment by Ok Friday, Aug 3, 18 @ 2:47 pm
Catch up payments to vendors so that we’re down to a 60 day cycle and keep it that way. Anything above, some percentage towards paying back what we borrowed from the pension funds and the rest we can fight about. I’ll be pulling for social services funding, particularly for people with mental illness and intellectual/developmental disabilities.
Comment by Earnest Friday, Aug 3, 18 @ 2:57 pm
I think for the first decade any extra revenue from cannabis needs to go to debt payments and patching up the pension system.
I mean even if it’s just a billion to couple billion a year, that adds up over time. And I’d hope it means the other taxes we need to raise might not be as burdensome, or perhaps more money for investments here and there.
Comment by Nick Friday, Aug 3, 18 @ 2:59 pm
People will say Las Vegas has large tourism industry, they also are a western state connected to California. If Illinois legalized Marijuana, residents from Kentucky Missouri, Iowa, Wisconsin and Indiana will come over to purchase. Whether camping in Shawnee National Forest or visiting Chicago. Everyone wants to talk about how we need to compete against these states, this is something that Illinois will pass that no state is connected too will. This is a no brainer, use the money to down the backlog then pension backlog like 47th said.
Comment by Almost the weekend Friday, Aug 3, 18 @ 2:59 pm
Why do we need to legalize another mind altering substance? Legalization will certainly make it more difficult to warn kids to stay away from it…after all, once it is legal, it will have reached peak normalization.
No different than having an Ice Cream Cone.
No matter that Marijuana smoke is filled with carcinogens, increases heart rate, can cause harm to unborn children, and is particularly detrimental to the health of young people.
Yet, there is a dollar to be made, so all other consequences will have to take a back seat to the March toward legalization.
All for a dollar and a high.
Comment by Saluki Friday, Aug 3, 18 @ 2:59 pm
Pay backlogged Bill’s for services rendered and not paid.
Then use the money to improve urban areas with meaningful job programs.
Actually there should be law to direct those monies to whatever program or programs agreed upon.
Comment by FormerParatrooper Friday, Aug 3, 18 @ 3:00 pm
Pay down pension debt.
Comment by Ole' Nelson Friday, Aug 3, 18 @ 3:00 pm
Fund a job guarantee
Comment by Precinct Captain Friday, Aug 3, 18 @ 3:04 pm
Saluki are you talking about alcohol?
Comment by Almost the weekend Friday, Aug 3, 18 @ 3:07 pm
It’s great to see marijuana sales exceed expectations. It’s time to end abysmally-failed prohibition in Illinois. Some or many of the people who are against marijuana legalization support needless wars and unlimited access to guns, which is much more harmful. Why should we let them dictate our marijuana law anymore?
I think part of the money should go toward substance abuse treatment and prevention, like teen drug use. We can focus on making legalization work as best as possible for responsible adults.
Then there is help with offsetting property taxes, by using revenue to ease burdens on taxpayers where we can.
I support these ideas, as well as helping pay pensions and debt, instead or along with. It’s good to have choices.
But please, Pritzker, make with the legalization campaign soon. He said it would be a big part of his campaign.
Comment by Grandson of Man Friday, Aug 3, 18 @ 3:08 pm
==Marijuana smoke is filled with carcinogens, increases heart rate, can cause harm to unborn children, and is particularly detrimental to the health of young people.==
THC and CBD are anti-carcinogenic, research on Rastafarian mothers has shown no ill effects, and differences between young users and non-users disappear after 72 hours. What else you got?
Comment by Jocko Friday, Aug 3, 18 @ 3:14 pm
===Marijuana smoke is filled with carcinogens===
You don’t have to smoke it to enjoy it anymore.
Comment by 47th Ward Friday, Aug 3, 18 @ 3:18 pm
Occam a medical cannabis program is not the same as an adult use program. An adult use program doesn’t require doctors to be the gatekeepers, revolutions around the sun would be the likely gatekeeper.
Saluki - smoking = bad, we get it. But where are all the bodies of the hippies that should have died from lung cancer from all the doobies that were passed around 50 years ago? Also it is more about personal freedom, liberty and consistency within the law regarding intoxicating substances than making a dollar. Driving is dangerous, perhaps you should crusade for making that illegal since it kills more people than cannabis. Sugar is a mind altering substance, ask any parent or teacher who deals with kids aged 5-12. Humans have an endocannabinoid system, perhaps you should ask you doctor about it.
Comment by frisbee Friday, Aug 3, 18 @ 3:23 pm
===Why do we need to legalize another mind altering substance?===
Better question is why do you want to lock people up and/or ruin their lives over marijuana?
Comment by Rich Miller Friday, Aug 3, 18 @ 3:26 pm
Look at legalization as a way to tax retirement income in IL. Who has more time and disposable income to purchase and use legal weed than wealthy pensioners.
Comment by Johnnie F. Friday, Aug 3, 18 @ 3:35 pm
Saluki, states with robustly regulated legal markets are seeing drops in teen use as a result of thoughtfully applied prevention education combined with rigorously enforced carding at dispensaries. It’s not eating an ice cream cone & when kids get more realistic info than “this is your brain on drugs” they can make smarter decisions. The 87% of teens who currently report easier access to cannabis than alcohol in states without an adult use market will be disappointed to learn that unlike the dude on the corner who doesn’t card, dispensaries don’t mess around with underage access.
Comment by Kelly Cassidy Friday, Aug 3, 18 @ 3:54 pm
The state has committed to increase school funding by $350M per year over 10 years. I think devoting some of revenue to that will help ease the minds about the state’s commitment to this allocation. Every $ accounted for by new revenue sources is a $ freed up from existing sources.
Comment by DarkDante Friday, Aug 3, 18 @ 3:58 pm
I’d be for it if and only if all is used to pay debt until no debt. (of course save a bit to pay for problems that arise with any vice being legalized)
Comment by I Miss Bentohs Friday, Aug 3, 18 @ 4:07 pm
Unfunded pension liability and bill backlog. Once the bill backlog is paid down, a capital bill.
Comment by Nick Name Friday, Aug 3, 18 @ 4:14 pm
If Illinois were able to generate $500M in tax revenue through legalization of marijuana, it would be nice, but it wouldn’t even begin to address the pension nightmare that is looming large on the horizon. There won’t be any revenue left over for anything, and in fact, there will need to be cuts made to critical services. Unless of course JB plans to raise taxes on everybody, and includes retirement income. But that’s another post.
Comment by SSL Friday, Aug 3, 18 @ 4:18 pm
Well, depending on the incarcerated population convicted for marijuana-related crimes, some healthy percentage of the funds should be allocated to education and job training opportunities for those individuals. Seems like a moral imperative for those that care about justice.
Comment by Veil of Ignorance Friday, Aug 3, 18 @ 4:36 pm