Illinois expects economic impact following marijuana legalization
July 12, 2019
Following 10 other states, Illinois legalized recreational marijuana use for those over age 21. However, unlike those other states, Illinois became the first to also legalize the sale and possession of it.
Illinois governor J.B. Pritzker signed into action the Cannabis Regulation and Tax Act on May 31. The bill will go into effect January 1, 2020, with hopes to improve the Illinois economy.
Robert Bruno, professor in the School of Labor and Employment Relations, serves as director of the Labor Education Program in Chicago. In 2018, he co-authored a study looking at the financial effects should cannabis be legalized in Illinois.
According to the study, sponsored by the Illinois Economic Policy Institute and the Project for Middle Class Renewal at the University, Illinois could potentially generate $525 million in new tax revenues.
Bruno said this new revenue could be used for various forms of social improvements, infrastructure and education throughout the state.
“(Illinois should be) using revenue to invest in underdeveloped communities where there’s high unemployment rates,” Bruno said. “(There should be) investing in parts of the state that have been hollowed out due to industrialization; investing in communities that have suffered this tough ‘lock ‘em up’ approach to drug use.”
With the passing of this bill, Illinois taxpayers would save $18.4 million annually in reduced incarceration costs, law enforcement spending and other legal fees, according to the study.
Bruno explained the increase in criminal cases against minority individuals since the war on drugs began, particularly brown and black men, has been a forefront issue of marijuana criminalization.
“It’s really at the core of the lock ’em up mentality that began in the 1980s, and that policy has just been so destructive to families and communities,” Bruno said.
Bruno explained this revenue can also be spent on those struggling with employment to provide healthcare, affordable housing and effective transportation to get to a given job. Additionally, it could be spent to provide educational assistance and rehabilitation to those with drug addiction.
Frank Manzo, founder and policy director of the Illinois Economic Policy Institute, co-authored the study with Bruno and graduated from the University undergraduate program.
Manzo agreed Illinois should prioritize its revenue spending in underfunded communities heavily affected by crime, along with in substance abuse prevention and mental health programs. He also feels there should be a push for funding education and crime prevention measures.
The act mandates the Illinois State Police and other law enforcement agencies must expunge all criminal history records of an arrest, charge not initiated by arrest, order of supervision or order of qualified probation for a minor cannabis offense.
Craig Campbell, senior in Business, served as the previous vice president of the Economics Club at the University. He said the people with charges of cannabis use or sales, who have been unable to get jobs due to their criminal record, could now see a change.
“Once (the criminal charges) get removed, we’ll have a huge amount of individuals that can enter the workforce that we didn’t have before,” Campbell said.
According to the study, the legalization could potentially create 23,600 new jobs for Illinois business and boost the Illinois economy by $1 billion annually.
The Act mandates the regulation of cannabis sale and consumption is a statewide concern and gives power to local governments to regulate.
Bruno explained research has indicated support of this legalization from both rural and urban communities equally, despite being for reasons of different economic benefits. So, Champaign’s rural community would likely respond similarly to urban cities such as Chicago.
“Given the support across the state, although we still have to deal with age limitations, it could still be beneficial,” Bruno said.
Manzo said he expects overall not much will socially change, as he has not seen any major shifts in states with similar legalization laws.
“It’s just a cultural shift more than anything in Illinois,” Manzo said.
The University could possibly see an increase in funding from the bill, as 45% of the revenue from marijuana sales will go to the General Revenue Fund in Illinois, which primarily gives to education. However, there will not likely be a large increase as of right now.
“The amount by which it would increase is unknown and is initially going to be small because most of that money will be used to pay down some unpaid bills,” Manzo said.
Without set regulations for the marketing of marijuana, it remains unknown as of now as to what consumers will be targeted by the industry.
Manzo said three groups could be potentially targeted: tourists, especially because no surrounding states have not legalized yet; the “party crowd”; and those addicted to opioids.
Campbell said he thinks a major population the industry would target is people with chronic conditions, which could lead to more attempting to use after seeing positive effects.
Manzo said he does not fear misuse of cannabis usage in Illinois, given the new regulations portrayed in the act.
“I doubt there would be misuse, so to speak, because people are already consuming cannabis right now in Illinois,” Manzo said. “The demand for cannabis is not going to dramatically change.”
In Colorado, marijuana usage remained generally unchanged after the legalization of recreational marijuana consumption over age 21. Manzo expects Illinois will have a similar result.
Though Illinois’s approval rating for cannabis has been above 60% for both democrats and republicans, Bruno explained neighboring states are not as high, so they will likely not be legalizing anytime soon.
Campbell feels other states will likely follow Illinois’s example after seeing the state’s experience from increased tax revenue.
“Having (marijuana) legal in our nation’s capital, it should be legal everywhere,” Campbell said.