Chicago, Illinois Cannabis Tax Rate
37% totalAdministering agencies: Illinois Department of Revenue + Chicago Finance Department · Updated for 2026
A legal cannabis purchase in Chicago is taxed at a combined effective rate of about 37%, driven by a 3% Chicago cannabis business tax stacked on top of Illinois's 25% state excise and 6.25% state sales tax. Every major Illinois city tracked here carries the same combined rate, because Illinois applies a uniform 3% local cannabis tax across host communities. On a typical $100.00 dispensary purchase that works out to roughly $37.00 in tax, or about $137.00 out the door.
Chicago is Illinois’s largest city and stacks local cannabis taxes on top of the state’s potency-based excise, putting combined Chicago rates among the highest in the Midwest.
How Much Is Cannabis Tax in Chicago?
Use these worked examples to see what Chicago's 37% combined cannabis tax adds to a dispensary purchase. Figures apply the Illinois state excise, 6.25% state sales tax, typical local sales tax, and the 3% Chicago cannabis business tax to the pre-tax price.
| Pre-tax price | Total tax | Chicago city tax | You pay |
|---|---|---|---|
| $50.00 | $18.50 | $1.50 | $68.50 |
| $100.00 | $37.00 | $3.00 | $137.00 |
| $200.00 | $74.00 | $6.00 | $274.00 |
Estimates treat all taxes as applied to the retail price; actual receipts vary by product, potency tax (where applicable), and exact local sales rate. Model a specific basket with the Chicago tax calculator.
Chicago Cannabis Tax Breakdown
| Tax | Rate | Notes |
|---|---|---|
| Illinois Cannabis Excise | 25% | State-imposed retail excise |
| Wholesale / Cultivation Excise | 7% | Imposed upstream; embedded in retail price |
| Illinois State Sales Tax | 6.25% | Medical pays 1% |
| Typical Local Sales Tax | 2.75% | County / district average |
| Chicago Cannabis Business Tax | 3% | City-specific cannabis ordinance |
| Combined Effective Rate | 37% | What you actually pay at retail |
Official source: Illinois Department of Revenue ↗ · rates compiled 2026-08-11 · city rates set by local ordinance.
How Medical Cannabis Is Taxed in Chicago
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%). In practice that trims roughly $30.25 off every $100.00 spent versus an adult-use purchase in Chicago, though the 3% Chicago cannabis business tax may still apply depending on the local ordinance.
Why Is Cannabis Taxed This Much in Chicago?
Cannabis in Chicago carries layers of tax that ordinary retail goods never see. Illinois adds its 25% cannabis excise, a 7% wholesale/cultivation excise that is baked into shelf prices, on top of ordinary sales tax, and Chicago then collects an additional 3% cannabis business tax on licensed retailers — a cost dispensaries pass through to the customer. That stacking is why the register total at a Chicago dispensary can run noticeably higher than the same product in a lower-tax Illinois city or across the state line.
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.
Chicago vs Other Illinois Cities
Illinois keeps local cannabis taxes uniform, so the combined rate in Chicago matches the other major cities below — the main cost difference between them comes down to base dispensary pricing, not tax.
| City | City Cannabis Tax | Combined Effective Rate |
|---|---|---|
| Chicago (this page) | 3% | 37% |
| Rockford | 3% | 37% |
| Peoria | 3% | 37% |
| Springfield | 3% | 37% |
| Aurora | 3% | 37% |
See the full Illinois cannabis tax guide →
Frequently Asked Questions
What is the cannabis tax rate in Chicago, Illinois?
How much tax will I pay on a $100 cannabis purchase in Chicago?
How much is the cannabis business tax in Chicago?
Are medical cannabis patients exempt from Chicago's tax?
Where can I buy cannabis in Chicago?
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