With full legalization, this state is going to become the “Marijuana Mecca” of the Midwest…
It’s no secret that stocks aren’t performing well, and I know times like these make it difficult to be a tough and patient trader.
However, as you have seen, things are unfolding in the cannabis market exactly as they are supposed to. If you can handle the storm now, you’re going to set yourself up very nicely for long-term gains. At the beginning of 2019, I told you it was the “Year of CBD.” Now Walgreens, CVS, and Rite Aid are racing to fill their shelves with as many CBD products as possible.
We’re also seeing the normalization of cannabis, with even Martha Stewart jumping into the pet CBD market.
Heck, even former Speaker of the House John Boehner, who was originally an opponent of cannabis legalization, has gone all in.
And now, another domino has fallen into place with yet another state legalizing recreational marijuana use.
Welcome to the “Marijuana Mecca” of the Midwest
It happened quickly, but Illinois lawmakers approved the legalization of recreational marijuana last Friday.
It was the first instance where a legislature approved commercial sales. Those who are 21 or older may possess up to 30 grams, and adult visitors to the state may possess up to 15 grams. The state is also rolling out a unique tax structure.
I’ve talked about how the right structures can get a legal market started on the right path. On Friday, look out for a report where I talk about one such market.
If taxes are too high, we could end up with another California on our hands.
Cannabis Tax Structure
In Illinois, sales will be taxed at 10% for THC levels at or less than 35%. Cannabis-infused products will taxed at 20%, and 25% for THC concentrations of more than 35%. Municipalities can add special taxes up to 3%, and counties can add up to 3.75% in unincorporated areas.
Now, I believe taxes should be between 10% to 16%. Anything else, like how California rolled things out, can cause trouble.
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If prices are too high, cannabis enthusiasts just turn to the black market. I’m still thinking about supertaxes on high-THC cannabis.
But I don’t want be too hard on Illinois just starting out, because the important thing is they are moving forward with legalization.
It’s going to become what I’m calling the “Marijuana Mecca” of the Midwest. I know Michigan has legalized recreational marijuana, but with Illinois, you get Chicago. The winters are rough, but it’s a great sports town, and the Windy City actually set a new tourism record for itself in 2018 with 58 million visitors.
And as I mentioned earlier, this is going to benefit the companies in our model portfolios, especially one member of The Cannabis IPO Insider I recommended back in December 2018. Some have already experienced 100% gains, and with this move, more should be on the way.
It’s already a leader in the medical-use state program in Illinois, which puts it in a great position to lead the entire market when recreational sales begin rolling out. That’s significant, as current medical dispensaries will be the only legal sellers of recreational cannabis from January 1 through the middle of 2020.
Again, I know the market has been difficult to stomach lately, but hang in there.
Everyone will eventually realize these stocks shouldn’t be taking a nose dive.
Executive Director, National Institute for Cannabis Investors
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7 responses to “Welcome Illinois to the Legalized Recreational Club”
June 05 2019