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Illinois Approves, Taxes Medical Marijuana

  • Aug 9, 2013 | Gail Cole

 Illinois to legalize medical marijuana.

llinois is on track to become the 21st state in the country to allow the use of medical marijuana. The Compassionate Use of Medical Cannabis Act, which was signed into law on August 1, will take effect January 1, 2014. It is a pilot program, set to run for four years.

Governor Pat Quinn (D) kept people guessing about whether or not he would support the new law. Yet when he announced the Compassionate Use of Medical Cannabis Act, he highlighted its humanity: "As Nelson Mandela once said, 'Our human compassion binds us the one to the other -- not in pity or patronizingly, but as human beings who have learnt how to turn our common suffering into hope for the future.' He said he has often been moved by the bravery and suffering of people with debilitating illnesses. "They need and deserve relief."

The new law will provide that relief. However, it also ensures that "Illinois has the nation's strictest safeguards to prevent abuse." Senator Bill Haine (D), pointed out that "…only those suffering from the most serious diseases receive this treatment." 35 conditions meet the criteria for eligibility. These include cancer, HIV/AIDS, multiple sclerosis and muscular dystrophy.

22 cultivation centers and not more than 60 licensed dispensaries will be opened under the Compassionate Use of Medical Cannabis Act. They must be at least 2,500 feet away from schools and day care centers, and they must have 24-hour surveillance and inventory control. Eligible patients will be allowed to purchase up to 2.5 ounces of cannabis once every 14 days.


Medical marijuana will be taxed at the 1% pharmaceutical rate. In addition, there will be a 7% privilege tax imposed on cultivation centers and dispensaries. Revenue generated by the privilege tax will be deposited in the Compassionate Use and Medical Cannabis Fund, to cover the cost of administering and enforcing the Act.


The legalization of medical marijuana is expected to create quite a few jobs. The 22 cultivation centers could hire as many as 10 people each, and the 60 dispensaries are expected to hire between 10 and 20 staff members. But that's not all. "[H]undreds of new jobs in related industries will be created."


More and more states may be permitting the use of medical marijuana, but the issue is still complicated because marijuana is illegal under federal law. Last month, federal agents reportedly raided several medical marijuana dispensaries in Washington State, confiscating inventory intended for cancer patients.

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.