New customer-friendly legal recreational cannabis in Missouri cuts into Illinois’ market

Illinois had a three-year head start on legalizing recreational marijuana, but in many ways, Missouri has surpassed it after just one month.

The two states came to legalization very differently, which makes the laws in each state very different — and means Missouri is cutting into the Illinois market.

In February, its first month of legal sales, legal marijuana sales in Missouri totaled $103 million.

In Illinois, sales to out-of-state shoppers dropped 15% in that time, and as much as 30% in stores near Missouri, market analyst Cantor Fitzgerald reported. That’s important because sales to out-of-state residents make up almost one-third of all cannabis revenue in Illinois.

Illinois had $120 million in recreational sales alone in February, which outpaced Missouri. But Illinois sales have plateaued somewhat recently, and historically, sales continue increasing after legalization.

Some cannabis customers say they prefer buying in Missouri, which unlike Illinois, offers home delivery, drive-through windows, and deli style service, in which customers can see and smell the product before they buy it.

“People from Illinois are blown away,” former Missouri medical marijuana dispensary worker Michael Lasley said. “This is how it’s supposed to be. It’s all a function of competition.”

One reason the rules in Missouri are so different is that the state’s voters approved legalizing recreational cannabis by referendum, with 53% of the vote approving the measure in November 2022. In contrast, the Illinois lawmakers wrote a much more restrictive law when they voted to legalize recreational weed effective in 2020.

As a result, while Missouri’s population of 6 million is just about half of Illinois’, the Show Me State has nearly twice as many licensed marijuana stores, with more than 200.

Missouri, where medial marijuana has been legal since 2018, also has nearly three times as many licensed cultivation sites, and allows anyone 21 or older to grow at home, while Illinois only allows medical cannabis patients to grow their own weed.

Importantly for customers, Illinois products often cost roughly twice as much, often running $40 or more for an eighth of an ounce of flower, the part of the plant that smokers use. Missouri has what Cantor Fitzgerald says is the cheapest legal weed in the Midwest, as low as $20 for an eighth of an ounce.

Perhaps the most striking difference is that Missouri taxes retail marijuana sales at a flat 6%. Illinois has a scale that goes up to a hefty 35%.

Illinois residents may possess up to 30 grams of cannabis flower, while customers in Missouri may possess nearly three times as much.

In response to Tribune questions about the discrepancies between the states, Illinois regulators issued a statement emphasizing the state’s “social equity” licensees, meant to increase minority ownership.

“We prioritized social equity so that those most affected by decades of harsh drug policy had their fair shot at the industry, not just massive corporations run by the already-wealthy. That’s why we’ve issued 195 conditional social equity dispensary licenses so far with capital and other supports to help these businesses get off the ground.”

“We’ve also issued 88 Craft Grow licenses, 100% of which are social equity. That’s also why we’ve directly reinvested over $144 million of cannabis tax revenue into the communities hardest hit by the War on Drugs, which was possible because of the $487 million in tax revenue brought in just last year, with revenue continuing to increase year over year.”

“With social equity dispensaries opening their doors, record tax revenue, and money flowing to communities that have faced historic disinvestment, Illinois’ intentional and deliberate approach to cannabis legalization is paying off and we look forward to continuing to build on that success.”

But due to delays in issuing licenses and in getting financing for small start-ups, only a handful of social equity businesses have opened.

Meanwhile, majority white male-owned cannabis businesses in Illinois have expanded into multi-state giants, and own many of the 100-plus pot stores in the state.

Both states’ laws were written largely by industry advocates and benefitted existing medical marijuana growers by letting them add recreational sales immediately. Missouri has plans to add micro-businesses to expand diversity in the industry.

And while the Missouri law allowed for automatically expunging most nonviolent marijuana offenses, Illinois, which legalized recreational weed effective in 2020, already has expunged hundreds of thousands of such offenses.

Lasley, the former Missouri dispensary worker, lives near downstate Carbondale, and writes for the cannabis web site Illinois News Joint. He so prefers the Missouri market, including its quality and variety, that he even got a medical marijuana card there, which the state allows for out-of-state residents.

Greenlight Dispensaries, with 15 dispensaries and two growing facilities in Missouri, has been doing great business since full legalization, co-owner Tom Bommarito said. He and his brother own auto dealerships, and were self-financed with partner and CEO John Mueller, who had run cannabis businesses in Nevada.

The prices are an obvious draw for Illinois residents, he said.

“They come over to buy gas and cigarettes, so why not weed?” he said. “The taxes are lower and we’re just cheaper, so that’s going to be a problem for Illinois.”

This story was updated to correct the amount of marijuana used to reflect the price in Missouri.