Illinois Market Update: February Sales

Andy Seeger

Illinois was the first state to legalize adult-use cannabis through legislation, and it did so very quickly. It’s laws were made over the summer of 2019, and doors opened for sales on January 1st, 2020. That timeline was very aggressive compared to other market openings.


Illinois' Quick Roll-out

Some states had allowed cultivation prior to opening- a grace period wherein firms could grow with no license as they awaited review. This allowed for more product availability on day one. Illinois did not, and now it is struggling to get its cannabis supply to meet consumer demand. The state opened sales the quickest way it could; the medical market was expanded for recreational use.

It was the easiest and most expedited way to open an adult-use market, but it’s proving to not be the best way to open a market, as seen in the decline in sales from the first month to the second.


Medical Sales Prioritized

The established medical-turned-dual-sales dispensaries are required to hold back up to 50% of their product to ensure access for their patient clients. Current medical firms are attempting to scale as quickly as possible, but the capital and time commitments are still very heavy. Margins are very thin as capital has dried up, and prices remain high with low supply in some areas.


When Will Supply Meet Demand?

For Illinois, legal plants (in the ground on January 1st) will take 14-18 weeks to come to market, but low supply is likely to last for the foreseeable future -  even into the fall and perhaps next year. The 40 craft growers’ licenses recently issued will allow for 14,000 square feet each, which doesn’t compare to the current large-scale grow operations with hundreds of thousands of square feet of canopy space. We do not expect new adult-use only retail to open any time soon, as the state is just beginning to award adult-use licenses; the 75 new operations across the state may take until mid-year to approach any soft-opening.


The state has a responsibility to maintain the medical market it has established; Illinois currently seems unable to handle the tasks of both medical and adult-use oversight. The state; however, seems happy with the roll out as they highlight tax figures and high demand.


Last Updated: 3/13/20