In Illinois, pot is now legal. Charlie Bachtell, Cresco’s CEO, joins CNBC’s “Power Lunch” team to discuss the cannabis industry.
The new year is ringing in Illinois on Wednesday, as it joins 10 States and the District of Columbia to allow the legal sale and purchase of cannabis.
After Democratic Gov. J.B. Pritzker signed a bill that allows residents and visitors of Illinois to purchase the drug from licensed dispensaries. This was effective as of Jan. 1.
The state has more than 30 licensed dispensaries. Most of them are located in Chicago and the suburbs.
Cresco Labs, a Chicago-based cannabis business, claims it spent weeks training approximately 530 Illinois employees to educate new users. This was in preparation for Wednesday’s swell of curious customers.
With dispensaries scattered throughout Chicago, the company also offers a wide range of products including flowers, concentrates, vapes, and prerolled joints. According to the company’s website, prices vary depending on the product.
Cresco Labs spokesperson Jason Erkes stated to CNBC that “the level of excitement has outweighed the launch iPhone or new Jordan [shoes]”, Cresco Labs spokesperson Jason Erkes said.
The new state law allows adults over the age 21 to possess 30 gram of cannabis flower, 500 mgs of THC in pot products, and 5 grams each of cannabis concentrate. Visitors to the state can purchase 15grams of the drug, but they cannot transport it outside the state. According to state law, the drug cannot be used in private homes or smoke shops.
Cresco Labs rented a coffee shop in Lakeview to host the event. Erkes stated that the company expects the most traffic. He said that some of the staff will be present Wednesday to take preorders and educate customers about the products and how they can be consumed.
Erkes stated that “we anticipate people who haven’t used cannabis in 20 years or 30 year and those who have never had,” adding that the company has “thousands” of customers lined up at four of its stores.
The state is expected to make a lot of money from the law which also imposes an income tax on marijuana sales. The THC content of marijuana will be used to tax purchases. This includes a 10% tax on pot products that have THC levels less than 35%, a 25% Tax on pot products that have THC levels greater than 35% and a 20% THC tax on all THC-infused products.
Freedman and Koski in Colorado, a Colorado consulting company, believes that the marijuana industry will bring in $440 millions to $676million in tax revenue each year. Representatives from Chicago expect tax revenues from recreational marijuana to exceed $3.5 million in 2020..
People with low-level convictions for marijuana will be able to have their records wiped out under the law. This is a common provision in marijuana bills that aims to help those most affected by the war on drugs.
But not all are convinced that the state law will correct the negative impact Illinois’ drug laws had on communities of color and solve budget problems.
Smart Approaches to Marijuana’s CEO and president Kevin Sabet said that projections of revenue don’t account for other potential liabilities such as accidents caused by marijuana users or possible decreases in productivity at work.
He also claimed that the law wouldn’t be beneficial to poor people or small-business owners, but rather “corporations that want to make money .”
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