A Snapshot of Demand For Adult-Use Cannabis in Illinois
A Snapshot of Demand For Adult-Use Cannabis in Illinois
A Snapshot of Demand For Adult-Use Cannabis in Illinois
WRITTEN BY:
ANDREW FREEDMAN
Senior Director and Co-Founder of Freedman & Koski, Inc. Former
Director of Marijuana Coordination for Governor Hickenlooper
This independent project was funded by Senator Heather Steans and Representative Kelly Cassidy
TABLE OF CONENTS
Executive Summary....................................................................................... 4
Conclusion........................................................................................................25
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A SNAPSHOT OF DEMAND FOR
ADULT-USE CANNABIS IN ILLINOIS
EXECUTIVE SUMMARY
This study offers insight into what a legal, adult-use cannabis system
may look like in the state of Illinois. The goal in any legal system should
be to provide safe, regulated, consistent cannabis to consumers, while
effecting greater social justice, displacing illegal markets, decreasing
problems related to substance abuse, and maintaining public safety.
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A Snapshot of
Demand for
Adult-Use
Cannabis in
Illinois
kkAll states that have legalized adult-use cannabis have also had
legacy systems for medical cannabis in place. Successful programs
have been opened by incorporating as many of the stakeholders
from the legacy programs as possible, while not sacrificing the
broader goals of legalization.
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ESTIMATING DEMAND AND TAX REVENUE FOR ADULT
USE CANNABIS IN ILLINOIS
6
A Snapshot of
Demand for
Adult-Use
Cannabis in
Illinois
7
A Snapshot of
Demand for
Adult-Use
Cannabis in
Illinois
1 See https://media.enjoyillinois.com/press-releases/illinois-tourism-announces-
record-growth/ and https://www.choosechicago.com/media/news/post/mayor-
emanuel-announces-a-record-57-6-million-visitors-to-chicago-in-2018/
8
A Snapshot of
Demand for
Adult-Use
Cannabis in
Illinois
2 https://www2.illinois.gov/sites/mcpp/Pages/Updates.aspx
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A Snapshot of
Demand for
Adult-Use
Cannabis in
Illinois
3 A case is currently percolating through the Illinois courts that seeks to force the
Department of Health to list “intractable pain” as a qualifying condition. The
patient bringing the case won an initial judgment in Cook County court, but the
case has since been appealed by the state and awaits future adjudication. The
case is titled, Mednick v. Illinois Department of Health.
4 https://nccih.nih.gov/news/press/08112015
5 https://www.nbcnews.com/storyline/americas-heroin-epidemic/one-three-
10 americans-took-prescription-opioid-painkillers-2015-survey-says-n788246
A Snapshot of
Demand for
Adult-Use
Cannabis in
Illinois
6 This is marijuana product of which a large portion was sold as whole flower
cannabis and the remainder was processed into other products (i.e., concentrates,
edibles, tinctures, etc.)
7 Data for both Colorado and Illinois is based on the 2015 National Survey on Drug
11
Use and Health, available here: https://www.samhsa.gov/data/sites/default/files/
NSDUHsaeShortTermCHG2015/NSDUHsaeShortTermCHG2015.htm
A Snapshot of
Demand for
Adult-Use
Cannabis in
Illinois
8 https://media.enjoyillinois.com/press-releases/illinois-tourism-announces-record-
growth/
A Snapshot of
Demand for
Adult-Use
Cannabis in
Illinois
9 https://www.enjoyillinois.com/assets/Illinois-and-Chicago-2016-Leisure-Visitor-
Profile.pdf
10 http://www.ides.illinois.gov/LMI/Pages/Commuting_Patterns.aspx
11 https://www.rand.org/pubs/research_reports/RR466.html
12 See the New York State Demand Study, available here: https://www.health.ny.gov/
regulations/regulated_marijuana/docs/marijuana_legalization_impact_assessment.
pdf
13 See “Market Size and Demand for Marijuana in Colorado: A 2017 Update” by the
13 Marijuana Policy Group, page 13. Available here: https://www.colorado.gov/pacific/
sites/default/files/MED%20Demand%20and%20Market%20%20Study%20%20
082018.pdf
A Snapshot of
Demand for
Adult-Use
Cannabis in
Illinois
Colorado
Illinois
(2017)
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A Snapshot of
Demand for
Adult-Use
Cannabis in
Illinois
15
A Snapshot of
Demand for
Adult-Use
Cannabis in
Illinois
Given the lack of a physical border and the sheer size of the
state of Illinois, extending away from Michigan, it will serve as
a limited competitor—nothing like competition that can occur
between Washington and Oregon. However, the taxation
levels in Illinois and the future base prices of cannabis are an
important consideration for state policy makers. Because the
displacement of the criminal market is a goal of this legislative
proposal, the system in Illinois must be responsive not only
to the market forces in nearby states, but also by the criminal
market forces within the state. Taxation, fees, the number of
licensees, and canopy space cannot be so restrictive so as to
drive prices up in ways that dis-incentivize individuals from
transitioning to the legal market. Nor should those policy
choices be so permissive that they drive prices down so low
that it makes it difficult for businesses to remain solvent.
usage rates, but has slightly less than half the population,
offsetting those differences fairly effectively. (In fact, Illinois’
usage rates are about 47 percent that of Colorado’s, while
Colorado’s population is more than 43 percent that of Illinois’.)
While Colorado’s initial tax rates were slightly higher than
those in Illinois and the tourist population in Illinois is higher
than that of Colorado’s one can assume that economic activity
around cannabis will be similar in the early days of legalization,
if slightly higher in Illinois. Perhaps offering a 10-15 percent
bump in revenue over Colorado in each year post-legalization
would be an effective guide on which to base tax revenue
projections. Other states, such as Washington, do not compare
as meaningfully in terms of offsetting differences between use
and population size, taxation rates, and homegrows (they are
illegal for recreational purposes in Washington).
14 Orens, Adam, et al. 2018. “Market Size and Demand for Marijuana in Colorado 2017
Market Update.”Available here: https://www.colorado.gov/pacific/sites/default/
files/MED%20Demand%20and%20Market%20%20Study%20%20082018.pdf
15 Orens et al defines a flower equivalent as “a measure…that concerts non-
18 flower consumprtion or production into weight-based units of flower.” A pound
equivalent would be a one pound unit of that measure.
A Snapshot of
Demand for
Adult-Use
Cannabis in
Illinois
16 It is important to note that the actual pound equivalents individuals will consume
will depend significantly on consumer tastes, the types of products available,
and changes in consumer preferences. Without original data on Illinois consumer
preferences, it is impossible to understand those preferences. The figures we use
assume average use in ounces, typically drawn from whole flower cannabis, as we
do not have good estimates of non-flower consumption from consumers in non-
legal states like Illinois.
17 This figure could change as different companies enter the space, the purpose of
this specific analysis is to evaluate the capacity of the existing medical market to
serve the adult-use market, so using the data from existing medical producers to
estimate necessary cultivation space is appropriate.
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A Snapshot of
Demand for
Adult-Use
Cannabis in
Illinois
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A Snapshot of
Demand for
Adult-Use
Cannabis in
Illinois
Lower Upper
Estimate Estimate
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A Snapshot of
Demand for
Adult-Use
Cannabis in
Illinois
Flower Edibles
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A Snapshot of
Demand for
Adult-Use
Cannabis in
Illinois
* Each cell indicates the percentage of demand that can be met by a given type of space,
for each estimate. (Values over 100% indicate that existing unused and approved space is
more than needed to meet demand
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A Snapshot of
Demand for
Adult-Use
Cannabis in
Illinois
18 Data are based on both medical and adult-use tax collection from 2014-2018,
available here: https://www.colorado.gov/pacific/revenue/colorado-marijuana-tax-
data.
19 Data are based on both medical and adult-use sales from 2014-2018, available
here: https://www.colorado.gov/pacific/revenue/colorado-marijuana-tax-data.
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CONCLUSION
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A Snapshot of
Demand for
Adult-Use
Cannabis in
Illinois
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FREEDMAN & KOSKI, INC. WORKS WITH GOVERNMENT, RESEARCH INSTITUTIONS,
COMMUNITIES AND PRIVATE BUSINESSES TO GET CANNABIS LEGALIZATION RIGHT.
info@FreedmanKoski.com
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