What’s going on with the Illinois cannabis market? The Land of Lincoln legalized cannabis in 2019 after having medical cannabis for six years.

With 12.7 million people, Illinois is one of the largest cannabis markets in the country. A recent report from Headset focused on sales, product popularity, pricing, and demographics.

Key Takeaways

Illinois Cannabis Market
Courtesy of Headset.io

Regarding the Illinois cannabis market, there are some key takeaways from the Headset report. Namely, Illinois has a lot of market consolidation.

68% of the state’s sales come from the top 10 brands. Despite its size and millions of people, Illinois only has 118 cannabis brands.

The government is issuing 55 new retailer licenses to expand the market. But as of the report, Illinois only had 120 licensed retailers, which is incredibly low compared to other states.

Another Illinois cannabis market anomaly is their pre-roll market. One of the fastest-growing categories in other states (and Canada), in Illinois, pre-rolls aren’t as popular.

It could be because prices in Illinois are also among the highest in the country. Significantly higher. The average price for a cannabis good is 89% higher in Illinois than in the rest of the legal U.S. market.

Consumer demographics also break from the national trend in the Illinois cannabis market.

Illinois Cannabis Market Consolidation

Illinois Cannabis Market
Courtesy of Headset.io

In the first months of 2023, Illinois created $950 million in cannabis sales. This makes the state the third largest cannabis market in the U.S., after California and Michigan.

And this comes at a time when the cannabis industry is suffering. Whether through inept politicians unable to pass banking legislation, inflation caused by the central bank, or the increased competition in the market. Whatever the reason, many cannabis markets have reported flat or shrinking sales.

Illinois, however, buckled the trend and managed to grow by 2.1%, making them one of only five U.S. cannabis markets to see year-over-year growth into 2023.

While Illinois may still be growing its cannabis market, its slowing in brand growth. Illinois has among the fewest brands in any U.S. cannabis market.

With only 118 brands, Illinois has 52.6% less than Arizona, another heavily consolidated market.

Michigan has a similar population size and cannabis sales as Illinois. But where Illinois only has 118 brands, Michigan has 800.

It’s unsurprising that 68% of Illinois’ cannabis market sales come from their top 10 brands. Part of the reason is vertical integration.

In Illinois, 27% of total sales come from retailers selling their own in-house brands. Only Massachusetts and Colorado beat Illinois regarding vertical integration.

Illinois Cannabis Market Prices 

Courtesy of Headset.io

Illinois follows the trend for popular cannabis categories. However, one area of interest is the pre-roll market.

In Illinois, this category is underrepresented. Pre-rolls in the state have seen an increase of only 5.6%. Concentrates are the most significant loss, down over 15%.

Flower, while the most popular category, has grown only 0.7%.

Illinois, meanwhile, has some of the highest cannabis prices in the United States. The average item is 46% higher than in other Massachusetts and a 36% higher price per gram than in Nevada.

High vertical integration and small brand selection likely contribute to keeping prices high. Headset compares Illinois’ numbers to Washington State.

Washington State has over 1,000 distinct brands compared to Illinois’ 118. Washington also has some of the lowest prices in the country, on average, 61% less than in Illinois.

Poor access (12.7 million people and only 120 retailers) also contributes to higher prices. That said, we are seeing lower cannabis prices. But the rate of decrease has been slower in Illinois compared to the rest of the U.S.

The Demographics

Illinois Cannabis Market
Courtesy of Headset.io

Millennials make up 45% of total sales in the Illinois cannabis market. However, there is a higher Baby Boomer and Gen X representation than the rest of the country.

Consumers over 41 account for 36.4% of sales in the U.S. However, in Illinois, they capture 42.1% of the market.

Illinois women are also more likely to consume cannabis than the national average.

In Conclusion

So what’s going on with the Illinois cannabis market? Market consolidation and government gatekeepers limiting access to cannabis.

In other words, similar to how cannabis legalization is going in many parts of the world, including Canada.

Illinois is not the poster child for a lesson on how to legalize cannabis.