The state of Illinois brought in US$39.2 million in adult-use recreational marijuana sales, or US$3.07 per capita, making it the second-highest sales per capita during its first full month. The Prairie State was only trumped in its first month of marijuana sales by Nevada, which brought in US$8.88 per capita in July 2017.
On January 1, 2020, Illinois became the 11th state to legalize adult-use recreational cannabis. Unlike the other 10 legal US states, Illinois was the first to pass cannabis legalization through its legislature. Some believe the state's legalization process could very well set the blueprint for other states to follow.
Illinois is the sixth-most populous state in the US, with nearly 13 million residents, and is the second-most populous state to legalize recreational marijuana.
Not only did Illinois take a different approach to legalization, but it also introduced a unique "flip the switch" rollout model that allows existing medical marijuana companies to start producing and selling adult-use cannabis.
The model evidently worked well for the midwestern state because, despite having only 40 dispensaries open at the time of legalization, Illinois raked in an impressive US$3.2 million on its first day and US$11 million in its first week.
Will Illinois's Marijuana Sales Continue to Grow?
Although Illinois's performance is considered "typical for first month's sales," the midwestern state is expected to be the largest adult-use market in the Midwest. According to its largest cannabis producer by capacity, Cresco Labs Inc. (CSE:CL) (OTCQX:CRLBF), annual marijuana sales in Illinois could reach US$4 billion once the market matures.
It's hard to say exactly when the market will reach maturity, but at the very least, market research firms Arcview Market Research and BDS Analytics expect marijuana sales in Illinois to hit $1.14 billion annually by 2024.
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While the first month's marijuana sales don't necessarily indicate what the future holds, the demand in Illinois is expected to exceed supply for at least the next 12 months, according to Curaleaf Holdings (CSE:CURA) (OTCQX:CURLF), which is headquartered in Chicago.
In fact, the cannabis supply shortage in Illinois caused dispensaries to either limit sales or shut them down completely in early January. Luckily, demand has remained strong despite the shortage, which could indicate a strong market for the months and years to come.
A handful of cannabis companies have already staked their claim on the recreational cannabis market in Illinois. Cresco Labs, Curaleaf, and Green Thumb Industries Inc. (CSE:GTII) (OTCQX:GTBIF) have all set up shop in the state and are already bringing in some serious cash from marijuana sales in this ripe market.
Which US States are Expected to Legalize Marijuana in 2020?
Investors who are interested in the legal marijuana market in the US are likely wondering which states are expected to follow suit this year.
At present, Nebraska and Mississippi have legalization initiatives under review. However, both are historically run by Republicans, who tend to have more negative views towards cannabis than Democrats.
Instead, market watchers are eying New York and New Jersey as the next two states to move into the legal recreational cannabis market. Both states have advanced legislation to legalize adult-use pot, making them good candidates.
Arizona is another state that might very well move forward with legalization in 2020. Although the Copper State unsuccessfully voted to legalize recreational cannabis in 2016, the vote failed by a mere two percentage points.
Another potential candidate for recreational marijuana sales legalization in 2020 is Florida, after its overwhelming success with medical cannabis, which brought in US$626.4 million in 2018. Florida is considered the second-fastest adopter of medical pot after Oklahoma and could add recreational marijuana to the ballot in November 2020 if any of the three ballot initiatives are approved.
Other honorable mentions for 2020 recreational pot legalization are New Mexico, Vermont, Connecticut, and Rhode Island.
Regardless of which state is next to join the legal pot world, it's evident that 2020 could be a very exciting year for pot stocks in the US.
Featured Image: DepositPhotos © VadimVasenin
