Illinois cannabis taxes, explained: the three excise rates, local add-ons and the new medical exemption
The short answer: Illinois taxes adult-use cannabis at the register at 10, 20 or 25 percent depending on product type and THC level, then adds state and local sales taxes and any local cannabis taxes. Since Sept. 10, 2026, patients at medical-licensed dispensaries skip two of those layers. This is general information, not tax advice.
Illinois taxes adult-use cannabis by product type and THC level, then adds sales and local taxes. Since Sept. 10, patients buying at medical-licensed dispensaries skip two of those layers.
What changed
Purchaser excise tax: 10% for non-infused cannabis at or below 35% adjusted delta-9 THC; 25% above 35%; 20% for cannabis-infused products. Adjusted THC = delta-9 % + 0.877 x THCA %. Concentrates and vapes are taxed on adjusted THC, not at the 20% infused rate. Sources below
This article is general information, not legal or tax advice. Tax rules change and apply differently to each buyer and business; talk to a tax professional or lawyer licensed in Illinois.
Illinois cannabis taxes come in layers. The Illinois Department of Revenue lays them out on its cannabis tax page. Here's how they stack, from grower to checkout.
Layer 1: the grower's tax
Cultivators pay a cultivation privilege tax of 7 percent of their receipts from the first sale of cannabis. Starting July 1, 2026, a separate 7 percent medical cannabis cultivation privilege tax applies to cultivating medical cannabis.
Layer 2: the purchaser excise tax
At the register, adult-use buyers pay the cannabis purchaser excise tax at one of three rates:
- 10 percent for cannabis other than infused products with an adjusted delta-9 THC level at or below 35 percent;
- 25 percent for cannabis other than infused products above 35 percent adjusted THC; and
- 20 percent for cannabis-infused products.
"Adjusted" THC is a formula in the statute: the delta-9 THC percentage plus 0.877 times the THCA percentage. IDOR's page carries two clarifications. Concentrates aren't "infused products," so they're taxed on adjusted THC, not at 20 percent. Vape products are also taxed on the THC percentage of the liquid, not at the infused rate.
Layer 3: sales tax
Regular state and local sales taxes apply on top. IDOR says adult-use cannabis is taxed at the general merchandise rate where the dispensary sits. Medical cannabis is taxed at the qualifying-drug sales tax rate where the dispensary sits. IDOR points readers to its Tax Rate Database for location-specific rates.
Layer 4: local cannabis taxes
Counties and municipalities may add their own cannabis retailers' occupation taxes on adult-use sales, which IDOR collects. Rates vary by location, so IDOR points shoppers and stores to its Tax Rate Database. Local governments must file ordinances with IDOR by April 1 for a change to take effect July 1, or by October 1 for January 1.
What changed for patients in 2026
Under Public Act 104-0463 (SB 3222), any adult-use dispensary with an active license in good standing could opt in to a new medical cannabis dispensing organization license starting September 10, 2026, according to IDFPR's SB 3222 fact sheet.
IDOR says that beginning September 10, the purchaser excise tax is not imposed on cannabis a qualified patient, designated caregiver, Opioid Alternative Patient Program participant or provisional patient buys as part of their adequate medical supply from a Medical Cannabis Dispensing Organization licensee. The same page says locally imposed cannabis taxes are not imposed on those purchases either. (The local-tax sentence on IDOR's page refers to purchases "under the Illinois Hemp Act," which looks like a typo; we are reporting what the page says and have asked counsel to confirm.) IDOR also says cannabis subject to tax under the Compassionate Use of Medical Cannabis Program Act was already outside the purchaser excise tax.
And hemp?
IDOR's cannabis tax page says that beginning November 12, 2026, consumable or topical products with more than 0.4 milligrams of total THC per container no longer meet the definition of hemp, are "cannabis" under Public Act 104-0463, and may be grown and sold only under the Cannabis Regulation and Tax Act. The page does not spell out how those products will be taxed, so we don't either.
Sources
More state rules: see our Illinois rules tracker.
Related: our Public Act 104-0463 (SB 3222) explainer.
Related: our rules in every state we track.
Drafted with AI assistance from primary sources. Written and edited by The Highline Report newsroom under Monsaur Othman's editorial standards. Read how we use AI, our editorial policy and our corrections policy.
For adults 21+. News and education only. General information, not legal or tax advice. Nothing here is a health claim or an offer to sell.
Key facts and where they come from
- Purchaser excise tax: 10% for non-infused cannabis at or below 35% adjusted delta-9 THC; 25% above 35%; 20% for cannabis-infused products. Adjusted THC = delta-9 % + 0.877 x THCA %. Concentrates and vapes are taxed on adjusted THC, not at the 20% infused rate. source 1
- Cultivation privilege tax: 7% of taxable receipts from a cultivator's first sale; from July 1, 2026, a 7% medical cannabis cultivation privilege tax. source 1
- State and local sales tax also apply; adult use at the general merchandise rate plus any county and municipal cannabis retailers' occupation taxes; medical at the qualifying-drug rate; local ordinances filed by April 1 take effect July 1, by Oct. 1 take effect Jan. 1. source 1
- From Sept. 10, 2026, no purchaser excise tax and no local cannabis taxes on a registered patient's (or caregiver's, OAPP participant's, provisional patient's) adequate medical supply bought from a Medical Cannabis Dispensing Organization licensee; adult-use dispensaries in good standing may opt in to that license from Sept. 10. source 1 · source 2
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