Illinois started things off right in 2020 by legalizing recreational cannabis sales on the first day of January.
This is very significant. In the first year, projections show Illinois could be a cannabis market worth $2 billion.
One of the main reasons Chicago is going to be the "Marijuana Mecca of the Midwest" is because of tourism.
When Rahn Emanuel became mayor in 2011, one of his focal points was to get more people to visit Chicago. The city had about 39 million visitors when he first took office.
In 2017, the city set a record with 55.2 million visitors. Then it upped that number to 57.6 million in 2018. And I can only see it climbing higher from there.
But outside of the tourism, there's another reason I was so excited for Illinois to launch recreational sales.
Frankly, I believe it was one of the best days in cannabis history. Here's why... [mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]
Illinois' Legalization Frenzy and Beyond
As far as the tourism aspect goes, there will be some great dispensaries for tourists to check out.
Green Thumb Industries Inc. (OTCMKTS: GTBIF) and Cresco Labs Inc. (OTCMKTS: CRLBF) both had fully staffed recreational stores open on Jan. 1.
In fact, for the first day of sales, Cresco sold more than 9,000 cannabis products at a ticket price of $135.
But as I mentioned, there's another exciting aspect beyond tourism that I want to share with you today.
You see, Illinois has the chance to set an example for how cannabis taxes should be regulated. And a successful tax structure in Illinois could establish a model framework throughout the United States.
Illinois has decided to tax cannabis with a THC level at or below 35% with a 10% excise tax. Products above a 35% THC level will be charged 25%.
In Michigan, for example, that tax rate is 10% for all cannabis products, no matter the amount of THC.
Still, I believe many cannabis enthusiasts will adjust to the larger cost in exchange for being able to purchase a legal, tested product from a safe environment from knowledgeable salespeople who have an interest in their health.
All of the data that's gained from Illinois selling cannabis is going to be a gold mine for regulators.
Remember that one of the holdups for legalization in New York in 2019 was arguing over how much cannabis should be taxed.
If the system works in Illinois, New York regulators know it's one that could work for their state.
If it doesn't, they know it's one to avoid.
Either way, it gets the right system in place sooner rather than later, meaning those states whose legalization process is held up by issues such as these can get on a faster track to actually legalizing in 2020 and onward.
And more cannabis stores up and running is what will lead to more sales, more profits, and higher stock prices.
It's all part of why I'm so excited about the cannabis profits outlook for 2020 - which I outlined here for you in late December.
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About the Author
Greg Miller started working on Wall Street in September, 1987, just a month before the “Black Monday” stock market crash.
During his career there, he became an expert in just about every kind of publicly traded security - from blue-chip and small-cap stocks to municipals, junk bonds, and derivatives. As a portfolio manager, Greg was responsible for over $500 million of assets in mutual funds and insurance company accounts.
After leaving the Street, he designed a successful options trading strategy and made lucrative tech investments for a financial publication. He has also helped develop new products and worked with other editors to hone their strategies. He’s always been dedicated to deep, fundamental research - and he always will be - because he believes buying the very best companies at the right price is the best way to amass wealth in the stock market.