Illinois draws a bright line for THC potency: Cannabis with adjusted THC of 35% or less bears a 10% tax rate; cannabis rated over 35% bears a tax rate of 25%. (Infused products are treated separately, and taxed at 20%.)
https://www2.illinois.gov/IISNews/19996-Adult_Use_Cannabis_Legislation.pdf;https://www2.illinois.gov/IISNews/20242-Summary_of_HB_1438__The_Cannabis_Regulation_and_Tax_Act.pdf
There’s a lot to dislike about the Illinois tax plan — especially its reliance on old-fashioned ad valorem (price-based) taxation — doomed to decrease as prices do, and subject to price manipulation.
But its 35% bright line might be sensible. Illinois apparently established its tiers as proxies: The low taxed tier (≤ 35%) apparently corresponds to flower and other raw plant material; the high-tax tier (> 35%) corresponds to [sublinguals ???? and] dabs and other processed cannabis that is not infused.
This conclusion reflects the view that raw plant material with THC content over 35 percent is likely both rare enough to freakish and less than optimal in producing intoxication (like the stereotype of a muscle-bound strong man who cannot manage to bend over to lift weights). Continue reading “The 35% THC discontinuity in Illinois’s cannabis tax”
The Center for New Revenue 