Wisconsin Reconsiders Legalization After Sending $36 Million in Taxes to Illinois

Nothing gets people worked up like money, especially losing money. Maybe that’s why Wisconsin wants to reconsider its stance on recreational cannabis legalization. This potential change of heart follows a recent report that suggests the Badger State lost nearly $36 million in potential tax revenue because Wisconsin residents traveled to Illinois to purchase legal cannabis.

The Democratic governor of Wisconsin has been an outspoken advocate for legalizing recreational cannabis in the state. However, efforts continue to be stymied by the conservative, Republican-held legislature. Is the loss of millions of dollars enough to change minds in the Capitol?

Wisconsin’s History with Cannabis Legislation

Wisconsin finds itself in a unique position. States surrounding Wisconsin all have some form of legalized marijuana. Minnesota and Iowa have legalized medicinal cannabis, while Illinois and Michigan have legalized medicinal and recreational marijuana. In this little Midwestern pocket, Wisconsin stands apart. It is the only state without medical or recreational cannabis laws on its books.

Wisconsin has a contentious and troubled history regarding making cannabis legal. More than 70% of voters in areas like Racine and Kenosha support marijuana legalization. Democratic Governor Tony Evers supports legalizing recreational marijuana. He has gone so far as to propose legalizing cannabis three times and even included legalization language in his biennial budget request. Unfortunately, the Republican-held legislature has other ideas.

Republican members of the Wisconsin Legislature refuse to budge on their staunch opposition to cannabis legalization. Republican leaders of the House and Senate say they do not see a path forward for legalizing the recreational use of marijuana in the state. Members even went so far as to criticize the current Gov. Tony Evers for pushing legalization.

Bye-Bye Wisconsin, Hello Illinois

Apparently, poll numbers are not enough for Republican lawmakers. Polls routinely indicate Wisconsin residents overwhelmingly favor legalizing recreational cannabis use for adults. Instead of action from politicians, Wisconsin residents are looking for their cannabis fix elsewhere and finding it in Illinois.

Illinois legalized recreational marijuana in 2019, with the law going into effect on January 1st, 2020. Illinois became the 11th U.S. state to legalize recreational cannabis and the first to adopt a regulatory system for cannabis cultivation, testing, and sales through the state legislature. The Cannabis Regulation and Tax Act directs 25% of all cannabis tax revenue to support communities hurt by economic disinvestment and the damage caused by the “war on drugs.”

Illinois’ progressive stance on cannabis is drawing Wisconsin residents across the border. Illinois’ aggressive tax structure is bringing in millions of dollars from Wisconsin cannabis purchasers. In 2022, Wisconsin residents spent $121 million on cannabis from legal retailers in neighboring Illinois. That amounts to nearly $36 million in tax revenue paid into Illinois’ coffers.

Illinois raked in $462 million in tax revenue from marijuana sales in total. Marijuana sales peaked at $1.5 billion in 2022, a record high for the state. The encouraging numbers show marijuana sales in the area remain strong and are giving Illinois an optimistic outlook on sales figures for 2023. Demand continues to support the cannabis industry in Illinois, perhaps bolstered by the cannabis desert of nearby Wisconsin.

An analysis by the Legislative Fiscal Bureau claims that Wisconsin residents constitute 7.8% of Illinois cannabis-related tax revenue. However, those numbers could be larger or smaller because two dispensaries included in the estimate are near the border of Iowa and Wisconsin, potentially drawing customers from both states.

Democratic Senate Minority Leader Melissa Agard says Wisconsin residents should be outraged. The hard-earned money of Wisconsin citizens benefits another state’s schools, infrastructure, and public safety. She pointed out that the draconian stance of Republican lawmakers is hurting Wisconsin residents, and Illinois is reaping the rewards.

Does Money Talk?

If money talks, its voice falls on deaf ears. Despite the shocking numbers, Republican legislators do not seem ready to budge in Wisconsin. Senate Majority Leader Devin LeMahieu says Republicans might be “getting pretty close” to supporting a medicinal marijuana program for treating chronic pain. Assembly Speaker Robin Vos indicates there might be support for legalizing medical marijuana, but Gov. Evers’s plans for supporting recreational cannabis use could “deter Republican support.”

Speaker Vos also indicates that he has no interest in establishing a pathway for recreational marijuana as an industry that would generate more tax revenue for the state. Instead, he said he would be willing to support a program that made medical marijuana only available to those with chronic conditions to help them get the pain relief they need. He continues to imply his caucus would not favor legalizing marijuana for recreational purposes and says it is not good for the state.

The language from Republican lawmakers is not encouraging. Many people are taking it with a grain of salt. The Wisconsin legislature has failed to pass even modest attempts at decriminalizing marijuana possession and legalizing medicinal cannabis. So far, lawmakers appear to be no closer to legalizing medical or recreational marijuana in Wisconsin this legislative session, no matter how they talk about the issues to the press.

It appears that money is not swaying the Republican caucus in Wisconsin, at least not yet. Money isn’t swaying Wisconsin voters or Democratic supporters either. They were already in favor of legalizing recreational cannabis for adults. There is hope that continued social and financial pressure may help turn some Republicans around and encourage them to support legalization efforts in the future. In the meantime, Wisconsin residents looking to satisfy their craving will continue to have to travel across state lines to get their cannabis. Illinois will continue to welcome Wisconsin residents, and their money, with open arms.

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