Key Takeaways

• Cannabis law and regulations:
  • Medical cannabis is regulated by the Compassionate Use of Medical Cannabis Program and the Compassionate Use of Medical Cannabis Patient Registry Administrative Code.
  • Recreational cannabis is regulated by the Cannabis Regulation and Tax Act as well as the Administrative Rules under the Illinois Department of Agriculture and the Illinois Department of Financial and Professional Regulation.
• Licenses available: (a) Cultivation center; (b) Dispensing organization; (c) Craft grower; (d) Infuser organization; (e) Transporting organization; (f) Cannabis testing facility; (g) Community college.
• Products legal:
  • Usable marijuana; marijuana extract for inhalation; solid marijuana infused edible; liquid marijuana infused edible; marijuana infused topical; liquid marijuana RSO; marijuana mix packaged; marijuana mix infused.
  • The THC content shall not exceed: (a) 35% for plant material; and (b) 70% for adult-use and 90% for medical use for extracts.
• Taxes:
  • 7% – of the gross receipts from the sale of cannabis by a cultivator, craft grower, or processor to a dispensing organization
  • 10% excise tax – cannabis flower or products with less than 35% THC.
  • 20% excise tax – products infused with cannabis.
  • 25% excise tax – products with a THC concentration higher than 35%.
  • In 2022, Illinois passed legislation that exempt businesses from Section 280E of the federal tax code, allowing cannabis companies to deduct business expenses from their state income taxes.
• Market:
  • Medical: Since the IDOH began accepting applications for the Medical Cannabis Registry Program on September 2, 2014, it has approved applications for 412,832 qualifying patients. As of March 31, 2026, the total number of active patients was 119,497. There were 55 licensed medical cannabis dispensaries. Since retail sales began in November 2015, total medical cannabis sales have surpassed $2.9 billion.
  • Recreational: As of March 31, 2026, there was a total of 340 adult use cannabis businesses and 283 adult-use dispensary licenses have been issued. Illinois’ adult-use cannabis market launched in 2020 and grew rapidly, surpassing $2 billion in combined sales by 2024, with adult-use consistently representing over 75% of revenue. However, 2025 saw a 15% year-over-year decline to ~$1.7 billion total sales ($1.5B adult-use), driven by severe price compression and updated state reporting methods – despite record unit volumes.

Illinois Cannabis Legalization

In August 2013, Former Gov. Pat Quinn signed into law the Compassionate Use of Medical Cannabis Program Act to legalize the cultivation, sale and use of medical cannabis in the state. Illinois started accepting applications for patients, vendors and growers in September 2014, and dispensaries opened in November 2014.

How to Start a Cannabis Business in Illinois

There are 41 medical conditions in the program that qualifying medical cannabis patients must be diagnosed with to be able to use medical cannabis, including cancer, HIV/AIDS, Parkinson’s disease and severe fibromyalgia.

In August 2018, a new law allowing opioid patients access to medical cannabis was signed and the Opioid Alternative Pilot Program started at the end of January 2019, the Chicago Tribune reported. Allowing medical cannabis as an alternative to opioids in Illinois could yield $100 million-$400 million in additional sales from tens of thousands of new patients according to MJ Business Daily.

In January 2025, the Illinois Department of Public Health added four new conditions to the list of medical issues that can be treated with medical cannabis – endometriosis, ovarian cysts, uterine fibroids, and female orgasmic disorder.

In May 2019, Illinois legalized adult-use cannabis cultivation, sales and possession through the Cannabis Regulation and Tax Act and become the 11^th state to legalize recreational cannabis. The Illinois Department of Agriculture (IDOA) is responsible for licensing and regulating cultivation centers, craft growers, infusers, transporters, and Community College Vocational Cannabis Pilot Programs. The Illinois Department of Financial and Professional Regulation (IDFPR) is responsible for licensing and regulation of dispensaries, dispensary agents, and agent education providers.

In total there could be 295 stores, 100 growers and 100 processors in operation.

In 2022, Illinois passed legislation that exempt businesses from Section 280E of the federal tax code that allows cannabis companies to deduct business expenses from their state income taxes.

Illinois Cannabis Taxes

Taxes:

• 7% – of the gross receipts from the sale of cannabis by a cultivator, craft grower, or processor to a dispensing organization
• 10% excise tax – cannabis flower or products with less than 35% THC.
• 20% excise tax – products infused with cannabis.
• 25% excise tax – products with a THC concentration higher than 35%.

Illinois Cannabis Market Stats and Perspectives

Medical

Retail sales of medical cannabis in Illinois have reached more than $250 million in 2019, about $366 million in 2020, and peaked at $397 million in 2021. From there, medical cannabis sales began to fall, first to $354 million in 2022 and then further to $325 million in 2023. $285 million and $172 million worth of medical cannabis have been sold by 55 dispensaries in 2024 and 2025. Since retail sales began in November 2015, total medical cannabis sales have surpassed $2.9 billion.

Since the IDOH began accepting applications for the Medical Cannabis Registry Program on September 2, 2014, it has approved applications for 412,832 qualifying patients. As of March 31, 2026, the total number of active patients is 119,497. There were 55 licensed medical cannabis dispensaries.

Recreational

As of March 31, 2026, according to data from the Division of Cannabis Regulation, there was a total of 340 adult use cannabis businesses is licensed under the Cannabis Regulation and Tax Act, including 21 cultivation centers, 86 craft grow licenses, 55 infuser licenses, 164 transporter licenses, 5 testing laboratories and 9 colleges were approved to participate in Community College Cannabis Vocational Training Pilot Program. According to the state’s Department of Financial and Professional Regulation (IDFPR), 283 adult-use dispensary licenses have been issued.

Total sales of cannabis in Illinois surpassed $1 billion in 2020 – when adult-use sales began – with adult-use cannabis sales accounting for nearly 65% of revenue. Adult-use cannabis sales on their own surpassed the $1 billion mark already in their second year, reaching $1,379.7 million in 2021 – 106% higher than in 2020. Sales continued to rise every year, surpassing $1.5 billion in 2022 and $1.6 billion in 2023 with monthly adult-use cannabis sales hitting a peak of $153.9 million in December 2023. From the second year of adult-use cannabis sales, they have consistently accounted for over 75% of Illinois’ total annual cannabis sales. In 2024 combined cannabis sales surpassed $2 billion, of which over 85% were adult-use cannabis sales – around $1.7 billion.

Illinois’ cannabis market generated just over $1.7 billion in total sales in 2025, reflecting a 15% year-over-year decline, with adult-use purchases accounting for $1.5 billion. Although first-half momentum suggested recreational sales could reach $2 billion for the full year, second-half performance contracted sharply. This downturn was driven primarily by severe price compression – retailers moved record volumes at significantly lower prices – alongside a major update to the state’s sales tracking and reporting methodology. Total monthly adult-use cannabis sales have tripled since retail stores opened in 2020, from $39 million to an average of $125 million in 2025, according to the ICROO.

Based on sales data from 2025, usable marijuana accounted for around 53% of cannabis sales. The next most popular product forms were extracts and concentrates (33%) and infused edibles (14%).

Projections

Marijuana Business Daily forecasts the Illinois Cannabis Market will be worth $2 billion in only adult-use cannabis annual sales a few years after the program’s launch while the Illinois Economic Policy Institute estimated that legalizing recreational cannabis in Illinois could result in $1.6 billion in annual sales and more than 23,000 new jobs, and that point has already been reached.

Illinois Cannabis Market Infographics

Illinois Hemp Industry