Quincy News

Treasurer says city won't know cannabis tax revenue until September 2020

By Herald-Whig
Posted: Jan. 13, 2020 12:01 am

QUINCY -- Illinois marijuana dispensaries sold $3.2 million in cannabis-related products on Jan. 1, which was the first day of legal recreational adult use sales were made in the state. The following day the state's dispensaries sold an additional $2.2 million.

That number grew to $10.8 million in cannabis sales over the first week of the year. Those sales -- a total of 217,000 transactions -- averaged about $40 per sale.

As employees at recreational cannabis dispensaries in Illinois continue to sell their products at a record-setting pace, many in the state are wondering how much their local municipalities stand to gain from the sale of cannabis.

Yet, multiple city officials say it will take months before Quincy and other municipalities in the state will be able to answer that question.

"I wish I had a better answer because then we could make plans for how we would use that money," said Quincy City Treasurer Linda Moore. "It is just really hard to speculate."

The uncertainty is likely caused by a number of factors.

First, the city will soon be home to three recreational-use cannabis dispensaries, and it is unknown what impact having three dispensaries in the city will have on tax revenue.

Earlier this month, officials with Herbal Remedies, 4440 Broadway, announced their plans to open a second dispensary at the former site of Daylight Donuts, 1837 Broadway. A third dispensary known as Rise Quincy, which will be operated by Green Thumb Industries, is set to open in Quincy, but no official opening date has been given. Rise Quincy is located at 2703 Broadway.

Another factor is that the city's imposed sales taxes don't go into effect until July 1, according to Moore. The city has been collecting its general merchant sales tax on all cannabis-related purchases since the first of the year, but due to language in the statewide cannabis law, the city can't begin collecting its 3% cannabis tax until the summer.

She says it will likely be early September before the city receives its first check from the state.

City officials say they are also uncertain how long it will take for the public's interest in purchasing cannabis to wane.

Alderman Richie Reis, D-6, says he thinks Quincy's position as a border town will likely insulate it from up-and-down trends that in-state dispensaries may face later in the year as the newness of being able to purchase cannabis in the state begins to wear off.

"I think we will continue to get people coming across the river to purchase cannabis," Reis said. "Of course, it is still illegal for them to take it back across the river, but I think they will continue to come across the river to purchase it."

Reis is among those on the council who are backing a push to use the cannabis tax revenue for both the city's public safety pensions for police and firefighters or funding infrastructure.

In December, the Quincy City Council learned the city's pension program is about 43% funded, which means that the city has $93.5 million in unfunded pension liabilities.

Under state law, the city is mandated to have its public safety pension programs funded at 90% by the year 2041.

The city currently funds its public safety pensions with four revenue streams, including the Green Energy program, video gambling revenue, personal property tax replacement revenue and the city's property tax levy.

Alderman Eric Entrup, R-1, agrees with Reis that the cannabis tax revenue should be used to fund pensions, especially as Moore and City Comptroller Sheri Ray have warned that they fear the city's revenues from video gambling will likely plateau, if not begin to decline in the upcoming year.

"We keep getting told that video gambling revenue is going to decrease, and that our unfunded pensions are growing between $500,000 to $600,000 each year. It seems to me that the cannabis tax revenue is coming at the right time," Entrup said. "Definitely that is where I want it to be used."