Wisconsin residents purchased more than $121 million worth of marijuana from legal retailers in neighboring Illinois in 2022, contributing about $36 million in tax revenue to the state, according to a legislative analysis requested by a top Wisconsin senator.
Senate Minority Leader Melissa Agard (D), who has sponsored legalization legislation in past sessions, asked the non-partisan Legislative Fiscal Bureau (LFB) to study just how much money was flowing from Wisconsin to Illinois in the form of out-of-state cannabis purchases.
LFB released its findings last week, estimating $121.2 million in marijuana sales from Wisconsin residents last year.
To come up with that figure, analysts looked at data from the Illinois Department of Financial and Professional Regulation (IDFPR), which disaggregates monthly in-state and out-of-state cannabis sales and also provides county-by-county breakdowns.
LFB said that its estimates are based on the assumption that all out-of-state marijuana purchases in counties directly bordering Wisconsin came from Wisconsinites.
However, it pointed out that the actual numbers could be higher or lower based on a variety of factors, including the likely possibility that portions of out-of-state sales in the border counties came from people in other nearby states like Iowa or that Wisconsin residents could have paid for cannabis in Illinois counties that don’t directly border their state, such as Cook County where Chicago is located.
Further, the analysis doesn’t account for potential sales in other adult-use states near Wisconsin like Michigan.
Despite that margin of error, however, the report gives a basic idea of the amount of revenue that Wisconsin is losing out on as the GOP-controlled legislature continues to resist enacting legislation to create a regulated marijuana market in the state.
“It should upset every Wisconsinite that our hard earned tax dollars are going across the border to Illinois,” Agard said in a press release. “This is revenue that could be going toward Wisconsin’s public schools, transportation infrastructure, and public safety. Instead, Illinois is reaping the benefits of Republican obstructionism and their prohibitionist stance on marijuana legalization.”
“We are an island of prohibition and the people of our state are hurting because of it,” she said. “As seen in our neighboring states, legalizing marijuana for responsible adult usage will generate significant revenue for our mainstreets, safely regulate the existing illicit market, reinvest in our agriculture and farming heritage, support entrepreneurship, and address the massive and egregious racial disparities from marijuana prohibition.”
A separate report published last month by Wisconsin Policy Forum found that 50 percent of adults 21 and older in the state live within 75 minutes of an out-of-state cannabis retailer, such as in Illinois or Michigan. That percentage stands to increase if legislative efforts to legalize marijuana in neighboring Minnesota are successful this session.
Meanwhile, Gov. Tony Evers (D) released his biennial budget request last month, and it again included language to legalize medical and recreational marijuana in the state.
The governor had previously signaled that he planned to put the adult-use measure in his request, despite a top GOP lawmaker warning that taking that step could compromise negotiations on more modest medical cannabis legislation.
Agard said that “if Republicans choose to remove it from the budget, I will once again introduce my bill to achieve this goal,” adding that it’s “high time we get this done for the betterment of our state and the people living here.”
“The fundamental aspect of our job as legislators is to listen to the people we represent. The people of Wisconsin have been asking the legislature to take up common sense measures that will push our state forward,” the minority leader said. “We know that legalizing cannabis for responsible adult use is wildly popular among Wisconsinites, including the majority of Republicans.”
As part of the governor’s budget request, his office estimated that the state would generate $44.4 million in “segregated tax revenue” from legal cannabis, as well as a $10.2 million increase in state general fund tax revenue, in fiscal year 2025 if the reform is enacted.
The governor also included adult-use and medical marijuana legalization in his 2021 budget, as well as decriminalization and medical cannabis in his 2019 proposal, but the conservative legislature has consistently blocked the reform. (Full Story)