Illinois Recreational Dispensaries Sell Record $47.6 Million of Cannabis in June
Sales of adult-use cannabis in Illinois hit a new record high last month, as recreational marijuana dispensaries sold more than $47.6 million worth of legal products — a 7.5% uptick versus the previous month.
According to Illinois Department of Financial and Professional Regulation (IDFPR), which tracks sales at licensed adult-use shops, nearly $240 million worth of recreational cannabis has been sold in Illinois through the first half of the year.
Meanwhile, sales of medical cannabis from 55 licensed medical marijuana dispensaries in Illinois totaled $29.6 million in June, down slightly from the previous month. Concentrates and infused products made up roughly $15.9 million worth of sales, while dry flower accounted for about $13.7 million.
Medical marijuana sales in Illinois have topped $170 million on the year, according to the state, bringing total statewide cannabis sales (recreational and medical) to about $410 million through the first six months of 2020.
The record-breaking recreational sales in June comes as cannabis firms have wrestled with difficult operating conditions throughout much of the year. When adult-use dispensaries first opened in January, they struggled to maintain adequate inventory levels as initial demand outstripped supply.
“Growth is being driven the amount [of cannabis] licensed growers can produce,” said Andy Seeger, an economist who studies the cannabis industry and runs the "Canna-conomist" blog. “Growth in Illinois will continue to be dependent on the capital outlays expended and realized by the select few legally registered growers.”
Inventory shortfalls have persisted throughout the first six months of 2020, even as many Illinois stores have introduced coronavirus-induced social distancing protocols such as limiting walk-in business, offering curbside pickup for medical patients, or requiring customers to place orders online before arriving to purchase items during a designated pickup window.
According to Jason Erkes, the chief communications officer at Cresco Labs — which owns and operates seven Sunnyside dispensaries in Illinois — several large-scale Illinois cultivation facilities have recently been expanded to supply the marketplace with greater quantities of cannabis.
“New consumer-focused retail stores, like Sunnyside, have also opened which is helping provide greater access while eliminating the stigma some consumers associated with buying cannabis,” he added.
Nevertheless, Illinois governor J.B. Pritzker, citing the coronavirus pandemic, recently signed an executive order delaying the issuance of more than 80 cannabis business permits that were slated to be awarded on July 1, 2020.
According to the Chicago Tribune, 40 craft growers, 40 infusers and several transporters were expecting to be issued licenses. The delay sets business owners and the entire industry back at a time when both cannabis products and the tax revenues they generate are in high demand.
The state previously delayed awarding 75 dispensary licenses that were set to be issued on May 1, 2020, further slowing the expansion of the burgeoning Illinois cannabis market.
Exacerbating supply issues is increasing demand from out-of-state consumers who live in markets where the sale of adult-use cannabis is not legal, Seeger added.
Of the record $47.6 million in cannabis sold in June (994,545 items), about $35.2 million was sold to in-state residents. The remaining $12.4 million was sold to out-of-state customers who crossed borders and spent $2.1 million more on cannabis products last month versus May.
“Consumer demand is being driven by an ever-increasing acceptance of cannabis across the socio-demographic map,” Seeger said, noting that younger female consumers as well as older baby boomers are driving many of the current growth trends.
According to Seeger, cannabis brands are also getting better at identifying consumer need states and innovating with products tailored to personal experiences, which is driving increased purchases among existing users, canna-curious customers, and individuals “returning to THC after years spent addressing their need states elsewhere,” he said.
Erkes agreed, saying that sales will continue increasing as “more people feel comfortable buying cannabis, as more stores open, and as more product comes to market.”
“There have been a lot of new consumers entering the cannabis marketplace and existing consumers are spending more as new product comes to market,” he added.
According to cannabis market research firm BDSA, sales of marijuana in Illinois are expected to reach $1.5 billion by 2025.