Medical cannabis pays a reduced 1% state sales tax and no cannabis excise (savings vs adult-use depend on the product’s potency tier — the excise runs 10–25%). On a $100 pre-tax purchase that's roughly $30.25 less than an adult-use sale (before any local taxes, which vary by ordinance).
Illinois Cannabis Tax Notes
Potency-based Cannabis Cultivation Privilege Tax: 10% on flower ≤35% THC, 20% on infused products, 25% on flower >35% THC. Plus 7% wholesale tax on cultivators. Medical cannabis pays only 1% state sales tax and no excise.
City Cannabis Tax Rates in Illinois
Cities in Illinois can layer their own cannabis business tax on top of state taxes. Here are the reported rates for major cities — use the tax calculator to model a specific purchase:
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Frequently Asked Questions
What is the cannabis tax rate in Illinois?
The combined effective cannabis tax in Illinois ranges from 19% to 41% depending on the city. That includes a 25% state cannabis excise tax, 6.25% state sales tax, typical local sales tax, and any city cannabis business tax.
Does Illinois exempt medical cannabis from tax?
Medical cannabis pays a reduced 1% state sales tax and no cannabis excise (savings vs adult-use depend on the product’s potency tier — the excise runs 10–25%). That works out to roughly $30.25 less per $100 pre-tax than an adult-use purchase, before any local taxes.
How much is the state cannabis excise tax in Illinois?
Illinois imposes a 25% state cannabis excise tax on retail purchases. This is collected in addition to state sales tax and any local cannabis business taxes.
Does Illinois have a wholesale or cultivation cannabis tax?
Yes. Illinois imposes a 7% wholesale or cultivation excise tax. This is paid by cultivators or distributors upstream and is typically priced into the retail cost.
Can cities add their own cannabis tax in Illinois?
Yes. Illinois cities can add a local cannabis business tax up to approximately 3.5% on top of state taxes. Major cities often use close to the maximum allowed rate.
Which agency administers cannabis tax in Illinois?
Cannabis tax in Illinois is administered by the Illinois Department of Revenue. Licensed retailers file returns and remit taxes on a regular schedule.
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For informational purposes only. Not legal, tax, or financial advice. Illinois cannabis tax rates change — always verify with the Illinois Department of Revenue and consult a licensed tax professional. Read full disclaimer
