Costs, regulations make starting cannabis business difficult as Illinois cashes in

Costs, regulations make starting cannabis business difficult as Illinois cashes in

With annual sales now approaching $1.5 billion, Illinois earned record tax revenue from cannabis sales last year. But one expert said the state still makes it difficult to run a business because of high costs and regulations.

In Illinois, total cannabis tax revenue increased by 50% from  $297.7 million in 2021 to $445.3 million in 2022. Illinois Cannabis Business Association Executive Director Pam Althoff said Illinois has some of the strictest cannabis regulations in the United States, making it difficult to get into the business.

“I think Illinois has one of the strictest licensing programs in the country,” Althoff told The Center Square. “So here in Illinois, access to getting a license is much tighter.” Craft breeder contracts with states can cost breeders nearly $125,000 just to apply, which Althoff said was the main reason it was so difficult.

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High costs and regulations make starting cannabis business difficult as Illinois cashes in

“The regulations in place make it difficult for the general public to access the industry,” Althoff said. “It’s the cost. Most people don’t have access to that much money. You can’t go to the bank and get a loan.”

Althoff was asked whether states should consider a free market approach to regulating the industry. “If one of your goals was to get more diversity, I don’t think the free market is the way to go,” Alcoff said.

Taxes on legal cannabis he can be 40% or more, depending on the potency of the product. Taxes are divided in several ways.

More than a third goes to the country’s General Revenue Fund. 10% will be used for unpaid invoices. 8% goes to law enforcement and 2% goes to public safety campaigns.

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Nearly a quarter of all cannabis taxes go to community groups in areas hardest hit by the drug war. Chicago Rep. Sonya Harper said the state will use the money to benefit local communities.

“With a 50% increase in the overall tax value reported on adult cannabis, we are confident residents of these communities will be able to see and feel an investment now and in the future,” Harper said.

Priyanka Sharma

Priyanka Sharma is the content editor at with over 3 years of experience in journalism, Priyanka delivers fresh and accurate news on the cannabis industry to her readers. Her versatility as a writer and editor is showcased in her work. When she's not busy writing and editing, Priyanka can be found exploring new travel destinations and indulging in her love for food.

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