Illinois Cannabis Market Is Booming

Illinois Cannabis Sales Rise
Illinois Cannabis Sales Rise

Illinois only recently started selling cannabis legally at dispensaries, but the state is already breaking records. Cannabis operators are raking in money as more and more people purchase marijuana for both recreational use and medical use. The booming cannabis market in Illinois bodes well for legalization efforts in other states as lawmakers can see the positive effects that cannabis legalization has on the Illinois economy.

Illinois Dispensaries Sell Millions of Cannabis Products

The cannabis industry is doing extremely well in Illinois, where cannabis was legalized for recreational use in June 2019. The law went into effect on January 1, 2020, which is when adult-use dispensaries opened across the state. Since that time, Illinois retail cannabis sales have steadily increased each month. In June, the most recent month for which sales data is available, Illinois cannabis shops sold $47.6 million worth of marijuana products. This number set a new monthly record, topping the previous high of $44 million just one month earlier.

There are nearly 60 dispensaries currently licensed to operate in Illinois. These state-licensed dispensaries sell recreational marijuana and medical marijuana. Since marijuana was first legalized at the beginning of 2020, Illinois dispensaries have sold more than $250 million in cannabis and cannabis-related products. According to the Illinois Department of Financial and Professional Regulation (IDOR), Illinois retail marijuana stores have made nearly one million individual sales of marijuana and marijuana products, with each purchase averaging around $48.

Increase in Illinois State Tax Revenues from Legal Marijuana Sales

The coronavirus pandemic has been disastrous for Illinois tax revenues due to early shutdown orders for most retail businesses, as well as the reluctance of many state residents to venture outside and enter retail stores even after the shutdown orders were lifted. But the same is not true of tax revenues from the legal sale of cannabis in Illinois. In fact, the cannabis industry is one of the few industries that has managed to thrive during the COVID-19 pandemic. While overall sales tax revenues in Illinois are currently down by more than $181 million when compared to the 2019 fiscal year, marijuana sales tax revenues continue to rise each month.

Although sales tax numbers for the month of June have not yet been released by the Illinois Department of Revenue, sales of cannabis have generated tens of millions of dollars in revenues for the state already in 2020. Government data shows that Illinois collected $52.7 million in sales tax from the legal sale of cannabis during the first five (5) months of 2020. Remarkably, this is almost double the amount that state lawmakers projected before cannabis use became legal in Illinois. Moreover, these figures are expected to rise even higher in the future as the cannabis industry becomes more accepted in the mainstream and better understood as a fundamental part of the U.S. economy.

How Cannabis Sales Tax Works in Illinois

Cannabis sales tax laws in Illinois work differently than similar sales tax laws on other types of retail products and goods. Illinois imposes different tax rates on cannabis based on the potency of the cannabis: 10% at the lowest end of marijuana potency and 25% at the highest end of potency.

The revenues generated from taxes on cannabis sales in Illinois are used to fund different government programs and agencies:

  • General fund: 35%
  • Community development revitalization program: 25%
  • Substance abuse and mental health programs: 20%
  • Legislative bill backlog: 10%
  • Law enforcement agencies: 8%
  • Public education and analysis of marijuana legalization: 2%

Any additional revenues generated from sales tax on legal cannabis in Illinois are used for the state’s general revenue fund.

Illinois Cities and Towns Benefit from Legal Cannabis Sales

Although dispensaries first started operating in Illinois on January 1 of this year, local municipalities such as towns, cities, and counties did not begin adding their own taxes until July. When this happened, the purchase price of cannabis products increased slightly: early estimates put the increased prices at somewhere between 3% and 3.75%. While customers now have to pay a little more for recreational and medical cannabis purchased at retail cannabis stores, Illinois municipalities will benefit greatly from the additional tax revenues generated by cannabis sales.

One aspect of legal marijuana sales that doesn’t always get the attention it warrants is the extent to which recreational cannabis helps to infuse local economies with much-needed cash through sales to out-of-state consumers. Sales data shows that roughly 25% of all adult-use recreational marijuana sales at Illinois dispensaries comes from buyers who travel across state lines.

Contact Scythian Cannabis Real Estate

Many investors are looking into cannabis real estate investing, which has provided strong returns as retail cannabis sales surge across the U.S. Scythian Real Estate is a cannabis real estate fund that specializes in retail properties. Scythian has partnered with some of the largest cannabis operators in the country, including Curaleaf and The Green Solution. For more information, email Scythian Real Estate today.


Hawaii to Allow Sale of Cannabis Edibles

Hawaii Cannabis Edibles
Hawaii Cannabis Edibles

Cannabis-infused edibles may soon be legal in Hawaii after the state legislature passed a bill to allow the sale of edible products in dispensaries. The popularity of cannabis edibles among consumers could provide a significant boost to legal marijuana sales in Hawaii and create new opportunities for cannabis businesses with licenses to operate in the state.

Hawaii Legislators Pass HB 2097 and Allow for Sale of Marijuana Edibles

Hawaii currently has a total of eight (8) medical cannabis licensees, with those approved operators being licensed to sell medical marijuana at dispensaries that meet certain zoning and other legal requirements. Thanks to a new law, the operators may soon be allowed to sell cannabis edibles in addition to other medical cannabis products.

Hawaii created a Medical Marijuana Dispensary Program in 2015, established a dispensary system for the legal purchase of medical cannabis in 2016, and began selling medical cannabis at dispensaries in 2017. However, dispensaries were not permitted to sell cannabis edibles such as gummies, cookies, brownies, and chocolate bars. The reluctance of Hawaii lawmakers to allow edible products stemmed from a fear that marijuana-infused candies might appeal to young children and result in some kids accidentally consuming cannabis.

The Hawaii State Legislature recently reconsidered its stance on edible products and officially passed legislation to allow for the sale of cannabinoid-infused edibles at dispensaries in the state. Although the legalization of cannabis edibles for medical use had widespread support among legislators in Hawaii, it was not a foregone conclusion that the bill would pass in 2020. That’s because the COVID-19 pandemic shortened this year’s Hawaii legislative session and made it difficult for state lawmakers to convene and debate the proposed legislation.

HB 2097 Also Authorizes Remediation of Cannabis Products in Hawaii

HB 2097 does more than just legalize cannabis edibles in Hawaii. The bill begins with an introduction that states its three purposes:

  1. Authorizing licensed medical marijuana dispensaries to manufacture and distribute edible cannabis products.
  2. Authorizing the Hawaii Department of Health (DOH) to consider processes that may allow cannabis or manufactured cannabis products that fail testing to be remediated. This means that cannabis must meet certain decontamination standards before it can be sold on the consumer market in Hawaii.
  3. Authorizing the Hawaii Department of Health (DOH) to allow licensed dispensaries to provide educational and scientific information and to sponsor events related to medical cannabis.

Edibles Offer Alternative Way to Consume Medical Cannabis

Randy Gonce, the Hawaii Cannabis Industry Association program director, commented on HB 2097 in a press release and called the law’s passage “a victory for the state’s 30,798 registered medical cannabis patients.” Gonce specifically addressed the introduction of edibles to the Hawaii cannabis market by observing that “coronavirus has prompted more patients to seek ingestible forms of cannabis to replace inhalation due to concerns about lung health.”

The hope among proponents of the new law is that patients who use medical cannabis to treat serious health conditions will benefit greatly from being able to consume edibles instead of smoking or inhaling medical marijuana. The Hawaii Cannabis Industry Association (HCIA), an advocacy group for the state’s legal cannabis industry, praised lawmakers for passing HB 2097 and noted that the law will provide medical cannabis patients with “alternative ways to take their medication other than inhalation.”

When Will Hawaii Consumers Be Able to Buy Cannabis Edibles?

The passage of the edible legislation is not the end of the story. The bill has been sent to the desk of Hawaii Governor David Ige, who will have to decide whether to sign the bill into law or reject it. There is still some question about whether Ige will ultimately approve the bill because he has resisted cannabis policy reform attempts in the past.

The new law is technically supposed to take effect on January 1, 2021, but the Hawaii government has not yet established a timeline for introducing cannabis edibles to dispensaries. If and when the governor signs the bill into law, the Hawaii Department of Health (DOH) will then need to create rules for how, when, and under what circumstances cannabis edibles can be sold in Hawaii. This must happen before medical marijuana dispensaries can start stocking shelves with edible and drinkable marijuana products because HB 2097 specifically stipulates that edibles can be only manufactured and distributed within the state “under certain conditions.”

What Effect Will Edibles Have on Hawaii’s Cannabis Market?

The legal cannabis market in Hawaii is expected to generate up to $20 million in total sales revenues in 2020. Edible cannabis products could help operators generate even greater revenues by giving consumers in Hawaii even more ways to consume cannabis. This could be especially helpful for medical marijuana patients who have concerns about smoke inhalation or who worry about the potentially harmful effects of vaping. Additionally, many people believe that ingesting cannabis through edibles can create a longer-lasting high for the user. As a result, many Hawaii cannabis operators believe that there will be a high demand for cannabis edibles the moment they are introduced to state-licensed dispensaries.

Contact Scythian Cannabis Real Estate Today

Scythian Real Estate is a full-service real estate partner that provides assistance to cannabis operators who are looking to expand into Hawaii or other thriving U.S. cannabis markets. Scythian already works with some of the country’s largest cannabis operators, including Curaleaf and The Green Solution.

For more information about how Scythian might be able to help your cannabis company, email Scythian Real Estate today.


Colorado Weed Sales Setting Records

Colorado Weed Sales
Colorado Weed Sales

It’s been one record month after another for recreational marijuana dispensaries in Colorado so far in 2020. According to data collected by the Colorado Department of Revenue’s Marijuana Enforcement Division, retail cannabis shops collected nearly $160 million from consumers during the month of June – a new record high for the state. If these trends continue as many expect, the future looks bright for cannabis operators doing business in Colorado.

All-Time High for Colorado Recreational Marijuana Sales in June 2020

In June 2020, consumers of recreational marijuana in Colorado legally purchased $158,102,628 from adult-use cannabis dispensaries. This figure represents a new all-time record for cannabis sales in the state. In fact, this is the first time since Colorado legalized cannabis for recreational use that retail cannabis sales have exceeded $150 million in a single month. The previous high for recreational cannabis sales was $149,186,615, a number that was reached in May 2020. Moreover, sales of marijuana products in June 2020 saw a massive year-over-year increase from June 2019, when recreational marijuana sales totaled approximately $122.4 million.

How Has COVID-19 Pandemic Affected Colorado Cannabis Sales?

Most retail businesses operating in Colorado have struggled during the coronavirus pandemic. Interestingly, the COVID-19 pandemic seems to have had the reverse effect on marijuana businesses in Colorado: legal cannabis sales are setting industry records with each passing month. This is likely a result of dispensaries being allowed to remain open as “essential businesses” while many other types of retail stores were forced to temporarily shut down.

The surge in spending on cannabis in Colorado can also be attributed to the coronavirus in another way: as people found themselves forced to stay indoors for weeks and even months, many sought out relief in the form of recreational marijuana. This continued a trend among Colorado marijuana consumers, with the percentage of Colorado adults who reported consuming cannabis nearly doubling since 2017. Additional reasons for the steady rise in cannabis sales in Colorado likely include expanded availability as more dispensaries open in new local markets, a wider variety of cannabis products being made available to consumers, and years of campaigning by pro-legalization groups finally paying off as more people begin to accept cannabis use the same way they accept alcohol consumption.

Medical Marijuana Sales in Colorado Remain Strong

It wasn’t all good news for Colorado marijuana sales: medical marijuana sales declined slightly in June, according to Marijuana Enforcement Division data. Medical dispensaries reported selling just under $41 million in medical cannabis products, which represented a slight decline from the $43 million sold the previous month. Despite this minor dip in the medical marijuana market, however, combined sales of recreational cannabis and medical cannabis still set a new record for total volume in one month with nearly $200 million.

Current projections indicate that overall cannabis sales in Colorado this year should also set a new annual record. Colorado dispensaries generated roughly $1.75 billion in cannabis sales in 2019, with just over $800 million in sales during the first six months of 2019. So far in 2020, Colorado dispensaries have sold nearly $980 million in cannabis products. Cannabis industry observers expect that total sales of marijuana in Colorado this year could approach $2 billion.

Additional Tax Revenues from Cannabis Sales in Colorado

One of the positive consequences of increased cannabis sales in Colorado is that the state has been generating additional tax revenues. According to the Colorado Department of Revenue, the state collected more than $33 million in taxes and fees on sales of recreational and medical cannabis in June 2020. Additionally, the projected data indicates that Colorado generated more than $36 million in cannabis sales tax revenues in July 2020. Over the first half of 2020, Colorado has collected $203 million in cannabis taxes. (To put that number in perspective, consider that the state collected approximately $300 million in cannabis revenues during the entirety of 2019.)

Contact Scythian for Information on Cannabis Real Estate

Scythian Real Estate is the trusted real estate partner of several major cannabis companies operating in some of the most exciting cannabis markets in the U.S. The Scythian Real Estate Fund includes dozens of retail cannabis properties valued at $40 million.

To learn more about cannabis real estate, send an email to Scythian.


5 States Vote to Legalize Cannabis in 2020 Election

States Vote to Legalize Cannabis
States Vote to Legalize Cannabis

The 2020 election results brought welcome news for the cannabis industry, with voters in five (5) states approving cannabis ballot measures to legalize the sale of cannabis. As a result, residents in Arizona, Mississippi, Montana, New Jersey, and South Dakota could soon have access to marijuana at state-licensed dispensaries. This is an extremely favorable outcome for sophisticated cannabis operators who are looking to expand their reach into new cannabis markets.

Cannabis Legalization Measures Approved in Arizona, Mississippi, Montana, New Jersey, and South Dakota

A total of five states had 2020 state ballot initiatives that addressed the legalization of cannabis. Those measures were a resounding success, with all five states voting “yes” and creating new cannabis markets. It will now be legal to purchase cannabis for recreational use in Arizona, Montana, New Jersey, and South Dakota. This brings the total number of states with legal adult-use cannabis to 15. In addition to legalizing recreational marijuana, voters in South Dakota also voted in favor of legalizing marijuana for medical use. This makes South Dakota the first-ever state to legalize both recreational and medical cannabis at the same time. Meanwhile, voters in Mississippi chose to legalize cannabis for medical use only.

Steve Hawkins, the executive director of the non-profit legal group Marijuana Policy Project (MPP), observed that the success of the cannabis ballot initiatives means that approximately one-third of the U.S. population now resides in states where cannabis is legal for recreational use. Hawkins also noted that the legalization of medical-use cannabis in Mississippi and South Dakota means that 70% of all states now allow for medical cannabis sales. Matthew Schweich, deputy director at the MPP, was optimistic that this number will grow in the future and possibly result in federal cannabis legalization: “If we can win in New Jersey, Mississippi, South Dakota, Montana, and Arizona, it’s going to send a really loud message to Congress that it’s time to fix this at the federal level in 2021.”

What Is the Economic Impact of Legal Cannabis in NJ, Arizona, Mississippi, Montana, and South Dakota?

It will now be up to the state legislatures in Arizona, Mississippi, Montana, New Jersey, and South Dakota to implement the voter-approved laws and create the regulatory structures for legal cannabis sales. Once this happens, experts project that the cannabis markets in these five states could generate more than $2.5 billion in annual revenues by 2024. From that total, New Jersey dispensaries may bring in almost $1 billion annually in recreational cannabis sales, while Arizona dispensaries could reach $760 million in yearly cannabis sales.

The regulated cannabis industry in the United States continues to pay huge returns on investment for cannabis operators, particularly during 2020 when the pandemic forced many other businesses to temporarily close their doors. While states across the country issued shutdown orders for most retail businesses, cannabis dispensaries were allowed to stay open as “essential businesses.” The success of dispensaries in states where cannabis is legal for either recreational or medical use has pumped a lot of money into state and local economies through tax revenues. The expectation among cannabis industry observers is that these trends will continue in municipalities throughout Arizona, Mississippi, Montana, New Jersey, and South Dakota now that cannabis can be legally purchased in those states.

What Does the Future Hold for Cannabis Legalization in the United States?

While most Americans currently have access to legal cannabis in the form of either medical marijuana or recreational marijuana, both the sale and use of cannabis still remain illegal at the federal level. The hope among cannabis legal reform advocates was that Democrats might take control of the U.S. Senate in the 2020 election, but it appears that Republicans could maintain a majority. Continued GOP control of the Senate likely means that it will be at least two (2) more years before there are any serious efforts to legalize cannabis federally.

Marijuana is currently classified as a Schedule I drug under the Controlled Substances Act (CSA). This federal law defines marijuana in the same category as other substances with “a high potential for abuse,” including heroin, LSD, and ecstasy. Although the reclassification of marijuana might not happen anytime soon, there is growing optimism that more and more states will legalize cannabis in the years ahead. For instance, the legalization of pot in New Jersey could prompt New York and Pennsylvania, New Jersey’s neighboring states in the Tri-State Area, to pursue cannabis legalization efforts of their own – particularly once lawmakers and residents in those states see the tax revenues that are generated by legal cannabis sales in the Garden State.

Contact Scythian Cannabis Real Estate

Scythian Real Estate is a full-service real estate partner to some of the largest and most successful cannabis operators in the country, including The Green Solution and Curaleaf. If you are a cannabis operator looking to expand into a new cannabis market, or if you are a cannabis operator in need of capital funding, Scythian may be able to help. Email us today.


Curaleaf-Grassroots Merger Completed

Curaleaf-Grassroots Merger
Curaleaf-Grassroots Merger

Curaleaf Holdings, Inc. recently announced the completion of a long-in-the-works merger between Curaleaf and Grassroots Cannabis, two of the largest cannabis companies in the United States. With Curaleaf now acquiring Grassroots, many cannabis industry observers are wondering what kind of effect this will have on the retail cannabis market in states like Illinois, New York, and Pennsylvania. Read on to learn more.

Curaleaf and Grassroots Cannabis Join Forces to Create World’s Largest Cannabis Company

Curaleaf made the acquisition with the expectation of being able to leverage its dominant consumer brands, which include Curaleaf and Select, and innovative cultivation processes to greatly expand the company’s national presence. Prior to the merger, Curaleaf was already the largest vertically integrated cannabis operator in the U.S. Similarly, Grassroots Cannabis was already the largest private vertically integrated multi-state cannabis operator in the U.S. Together, these two cannabis behemoths expect to do big business in the years ahead – particularly as more and more states across the country look to legalize marijuana for both medical use and recreational use.

The acquisition of Grassroots makes Curaleaf the largest cannabis company in the entire world in terms of revenue. As a result of the deal, Curaleaf now has more than 135 cannabis dispensary licenses and 88 operational dispensaries in 23 states. (Prior to the merger, Curaleaf operated dispensaries in 18 states.) In addition to retail marijuana dispensaries, Curaleaf-Grassroots has assets that include 30 cannabis processing facilities and 22 marijuana cultivation sites. The size and scale of the company’s portfolio, as well as the company’s focus on states where cannabis is already legal for recreational use and/or medical use, means that Curaleaf has access to more than 192 million potential customers.

“This highly complementary combination brings together two companies with a shared vision for enhancing patients’ and customers’ lives with high-quality cannabis wellness and lifestyle products.”

-Joseph Lusardi, CEO of Curaleaf

Curaleaf Looks to Expand into New Cannabis Markets

In a press release issued by Curaleaf upon completion of the merger, Curaleaf CEO Joseph Lusardi stated that the company hopes to further solidify its leadership position in the United States retail cannabis industry by expanding into “new vertically integrated markets in the Midwest.” To that end, the presence of established dispensaries in Illinois should provide Curaleaf-Grassroots with a good opportunity to make inroads in the burgeoning cannabis market. As part of the merger, Curaleaf also acquired marijuana cultivation and processing sites in Illinois.

In addition to securing cannabis real estate properties in Illinois, Curaleaf also acquired properties in a number of other states that represent some of the fastest-growing cannabis markets in the nation: Arizona, Connecticut, Florida, Maine, Maryland, Massachusetts, Nevada, New Jersey, New York, North Dakota, Pennsylvania, and Vermont.

Grassroots Executive Joins Curaleaf Board of Directors

As part of the deal, Grassroots Cannabis co-founder and CEO Mitchell Kahn has been appointed to the Curaleaf Board of Directors. The move, which is effective immediately, expands the Curaleaf board from five (5) members to six (6) members. Kahn co-founded Grassroots in 2014 and has decades of experience as a senior executive with expertise in the commercial real estate field.

Kahn commented on the merger in a press release and noted that the Grassroots executive team has done an exemplary job of building “an impressive portfolio at an unprecedented pace, with facilities in highly competitive markets.” Kahn added that the Curaleaf-Grassroots team looks forward to integrating talent and resources “to build a great consumer product company – one that is dedicated to producing and delivering high-quality, safe, and effective cannabis products” to customers all across the country in states where adult-use cannabis is legal.

Contact Scythian Cannabis Real Estate for Information on Sale-Leaseback Deals

Scythian Real Estate is a trusted real estate partner of Curaleaf-Grassroots dispensaries located in North Dakota and Pennsylvania. If you are a cannabis operator looking to expand into new markets, you should email Scythian for information.