Northern Windfall: Wisconsin Residents Spend Millions on Pot in Illinois

For the state of Illinois, a thank you might be in order for its neighbors to the north. A newly released analysis says that Illinois collected millions of dollars in tax revenue from Wisconsin residents who crossed the border to buy legal marijuana. 

The two Great Lakes states border each other––Wisconsin abutting Illinois to the north––but they have very different laws on cannabis.

Illinois legalized recreational marijuana in 2019, and a state-sanctioned adult-use market launched at the beginning of 2020. The state also legalized medical cannabis in 2013.

Wisconsin, meanwhile, is one of the last remaining states where both recreational and medical marijuana are still illegal. 

Democrats in Wisconsin are determined to change that––including one lawmaker who released an analysis last week showing that the state is losing millions in potential tax revenue to Illinois. 

The report from Wisconsin’s Legislative Fiscal Bureau “estimated that $36.1 million of Illinois cannabis tax revenues in fiscal year 2022 were attributable to sales of cannabis made to Wisconsin residents.” 

The analysis “assumes that all sales to out-of-state residents in counties bordering Wisconsin were made to Wisconsin residents, which are estimated to constitute 7.8% of total Illinois cannabis-related tax revenue,” according to the report, which said that of “the sales made in counties bordering Wisconsin, $121.2 million, or 50.6%, of these sales were to out-of-state residents.”

“Relative to marijuana sales statewide, approximately 7.8% of total cannabis sales revenue in Illinois came from sales made to out-of-state residents in counties bordering Wisconsin in calendar year 2022,” the analysis said.

The report came at the request of Democratic state Sen. Melissa Agard, who has championed marijuana legalization proposals in the Wisconsin legislature for years. 

Agard, the Democratic leader in the state Senate, expressed frustration at the findings.

“It should upset every Wisconsinite that our hard earned tax dollars are going across the border to Illinois. 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,” Agard said in a statement last week.

Republicans hold majorities in both chambers of the Wisconsin legislature, as they have for more than a decade, which has diminished the chances for legalization. 

Wisconsin Democrats like Agard, and the state’s governor, Tony Evers, overwhelmingly support an end to the prohibition. 

“Republicans’ continued refusal to legalize marijuana is fiscally irresponsible. Wisconsinites paid more than $31 million – just in taxes – to Illinois in 2022. Wisconsin’s loss of potential revenue is even larger if we include taxes paid to Michigan, as well as Minnesota in the near future. Wisconsin is losing out on significant tax dollars that could be used to make our communities stronger, safer, and healthier,” Agard said in the statement. 

“We are an island of prohibition and the people of our state are hurting because of it. 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,” Agard continued. 

“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. We know that legalizing cannabis for responsible adult use is wildly popular among Wisconsinites, including the majority of Republicans.”

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