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%.)
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).
Carl Davis of the Institute for Taxation and Economic Policy made this practical point: “Hopefully the revenue department won’t be reviewing test results for thousands of pounds of cannabis flower just in case there’s a mythical 35% THC flower out there that’s supposed to be taxed at a higher rate.” https://twitter.com/carlpdavis/status/1126271113900765184
BUT dilution of dabs and sublinguals and the like via addition of terpenes or other non-THC material may provide an opportunity for taxpayers to choose the 10% rate over the 25%. That would be a loophole.
Nick Jikomes, “Peak THC: The Limits on THC and CBD Levels for Cannabis Strains, https://www.leafly.com/news/science-tech/peak-thc-cbd-levels-for-cannabis-strains, last accessed August 9, 2019. See also Nick Kosalka, https://twitter.com/nick_kosalka/status/1151987929377411072(July 18, 2019): “Very rare . . . . The plant has to have certain of percentages of other chemicals to be viable.”