Illinois Recreational Cannabis Supply Likely To Be Limited

Illinois Recreational Cannabis Supply Likely To Be Limited

Illinois, anticipating the legalization of recreational, adult-use marijuana on January 1, 2020, took a restrictive approach to licensing recreational marijuana. Additionally, towns and municipalities can choose to ban retail stores, making it difficult to commit to what could be a hefty investment.

The absence of retail stores could hinder the progress of what some estimate could be a $2.5 billion market, and also leaves plenty of space for a thriving black market. While it’s not uncommon to see limited access to recreational cannabis retailers during the first months of legalization, Illinois is pushing the breaks on any potential gold rush vibe.

While not likely (at all) but in theory, Illinois could have as many as 110 rec stores open in the New Year. That is if each of the 55 dispensaries currently in business were able to sell to the rec market — and they also elect to the option of adding a second rec store.

The state will control market penetration and growth carefully. Illinois would have, on a per-capita basis, about 10% of the recreational stores that Colorado has. State regulators will give licenses for up to 75 new recreational marijuana retail stores by May 1, 2020, increasing the maximum limit for recreational stores in the state to 185.

Illinois law limits the number of retail stores in the state to no more than 500. That means that even when the industry as a whole is entirely functional, the state would have about a fourth of the stores (again, on a per-capita basis) that currently operate in Oregon. And per Illinois law, areas can ban marijuana retailers — two of Chicago’s largest suburbs, Naperville and Bolingbrook — banned recreational pot shops.

In the end, it’s a wash when you look at the legal vs. illegal marijuana marketplace in these earliest stages. While the rec market in Illinois may take some time to get on pace, the state’s black market will maintain a stronghold, due in part to the convenience and cost.