Sales of adult-use cannabis in Illinois soared to record levels in June 2020, with recreational weed shops selling more than $47.6 million worth of products. Medical marijuana sales outperformed as well.
May wasn’t bad either, according to the Illinois Department of Financial and Professional Regulation (IDFPR), when dispensaries also set a record with $44.3 million in sales.
It was bound to happen, judging from the first day of adult-use pot sales on New Year’s day 2020 when thousands or people braved Illinois’ freezing temperatures to buy their first legal weed, breaking sales records then too.
This is all good, except there’s not enough to go around.
Though the record-breaking June sales were a pleasant surprise, pot shops and cannabis producers have struggled to maintain enough inventory to meet the demand for adult consumers as well as medical marijuana patients, of which there are 110,000.
“Growth is being driven by the amount [of cannabis] licensed growers can produce,” said Andy Seeger, an economist who studies the cannabis industry. “Growth in Illinois will continue to be dependent on the capital outlays expended and realized by the select few legally registered growers.”
The limited supply of recreational weed was expected and anticipated, but clearly frustrates consumers and local dispensaries whose hands are tied by how fast cultivators can grow enough product and expand operations.
Multi-State Operators in the Illinois Cannabis Industry
“We’re barely getting enough flower now. We’re starting to get some, but it was very, very slow compared to the vertically-integrated shops, or the multi-state operators,” Matt Stern, CEO of Nature’s Treatment Illinois, told Quad City Times. “So those guys grow their own flower and save it for their own dispensaries, which is a violation of state antitrust laws.”
But this issue with multi-state operators (MSOs) isn’t unique to Illinois.
Most legal cannabis states have licensed far fewer cultivators than necessary to meet demand and to be competitive. Not to mention the high cost of setting up operations can push out the local craft growers, which ultimately leads to the arrival of multi-state operators.
Coronavirus Pandemic and Illinois Cannabis
Citing COVID-19 concerns, Illinois governor J.B. Pritzker signed an executive order on June 29 postponing the issuance of more than 80 cannabis business permits to at least 40 craft growers, 40 infusers and several transporters, according to the Chicago Tribune. The coronavirus pandemic continues to affect the cannabis industry and market.
Home Grows in Illinois
In Illinois, only medical marijuana patients are permitted to grow up to five cannabis plants at home. Home growers who are not medical marijuana cardholders face a civil penalty.Hence, a possible explanation for why thousands of people continue to apply for MMJ licenses in the Land of Lincoln.