Watch now: A year after legalization, cannabis sales are a ‘new pot of money’ for Bloomington-Normal. But where does it go? | Politics

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Alexander Bartoloni, of Bloomington, examines cannabis products Friday afternoon at Beyond/Hello, 1515 N. Veterans Parkway. Beyond/Hello, owned by parent company Jushi Holdings Inc. recently opened its new location in Bloomington.



SIERRA HENRY

SIERRA HENRY

BLOOMINGTON — Speaking at a 2019 meeting of a city-formed task force, resident Adam Heenan delivered a prophecy.

“This is going to be a potential boon,” Heenan told the group assembled to study whether the city should opt-in to permitting the sale of recreational cannabis within city limits after it became legal statewide on Jan. 1, 2020. “But it also could not be.

Despite Heenan’s and other residents’ varied visions for the future, the task force ultimately recommended to city leaders that Bloomington, like sister city Normal, should allow cannabis sales. 

The Normal Town Council in November 2019 approved an ordinance amending the town’s zoning code to permit any type of cannabis facility — craft growing, cultivation, dispensary, infusion, processing and transportation operations — under strict state and local guidelines.

The Bloomington City Council largely listened to the task force’s recommendation, passing an ordinance in December 2019 allowing up to two dispensaries to sell recreational cannabis, but prohibiting all other types of cannabis businesses.

Recreational Cannabis’ Rollout in Bloomington-Normal

The sale of recreational cannabis has been legal in Illinois for one year. Here’s how the policy rolled-out in the Bloomington-Normal area:

June 25, 2019: Gov. JB Pritzker signs into law the Illinois Cannabis Regulation and Tax Act, laying-out layers of taxes that can be applied to the sale of adult-use recreational cannabis.

Nov. 18, 2019: The Normal Town Council opts-in to permitting any type of recreational cannabis facility under strict state and local guidelines, and establishes a 3% cannabis sales tax. 

Dec. 16, 2019: The Bloomington City Council opts-in to allowing up to two recreational cannabis dispensaries, prohibits all other cannabis businesses and establishes a 3% cannabis sales tax.

Feb. 3, 2020: Normal officials issue a special use permit to medicinal marijuana dispensary The Green Solution, allowing it to sell adult-use, recreational cannabis under new owner Jushi Solutions, Inc. and new brand Beyond/Hello. 

Feb. 18, 2020: The McLean County Board approves a 3.75% tax on sales of cannabis in unincorporated areas of the county, and a 3% tax on sales in municipalities. 

May 12, 2020: Beyond/Hello-Normal, the county’s first recreational cannabis dispensary, opens for business at 501 W. Northtown Rd.

Sept. 14, 2020: Bloomington officials issue a special-use permit to Jushi Holdings, Inc. to operate the city’s first recreational cannabis dispensary. 

Jan. 26, 2021: Beyond/Hello-Bloomington, the county’s second cannabis dispensary, opens for business at 118 Keaton Place. 

Since then, two adult-use cannabis dispensaries — operated by the same company — have opened in the Bloomington-Normal area. Both are barred from allowing on-site consumption.   

The Twin Cities also each implemented a 3% tax on sales of recreational cannabis, a measure that many advocates said would act as revenue mother-lode for the municipalities. 

Now, a year after recreational cannabis has been legal statewide, and residents have been buying products locally, The Pantagraph examined the outcome of Heenan’s vision, and whether Bloomington-Normal is rolling in the green, from sales of the green.

The analysis ultimately came to a hazy conclusion: while local sales of recreational cannabis are consistent, officials don’t yet have a complete understanding of how much money their own regulations are collecting, or a clear direction on where that revenue will go. 



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Theartis Butler shows off an available cannabis product Friday afternoon at Beyond Hello, 1515 N. Veterans Parkway. The recreational cannabis dispensary offers a boutique experience that puts a focus on customer interaction.



The Pantagraph also learned that Bloomington and Normal haven’t yet carved-out specific funds in their upcoming fiscal year budgets for allocations from the state’s revenue generated by its tax on cannabis sales. 

Municipalities under state law are required to direct their share of that revenue to cover specific costs, but both Bloomington and Normal in their upcoming fiscal year budgets plan to pool the monies into their respective general funds, which cover general costs for a range of departments. 

How Illinois taxes cannabis sales 

Signed into law by Gov. JB Pritzker on June 25, 2019, the Illinois Cannabis Regulation and Tax Act established a massive marijuana legalization framework for the state. 

Within the 600-page policy, lawmakers laid-out layers of taxes that can be applied to the sale of adult-use recreational cannabis.

They include a 7% wholesale tax, a retail cannabis excise tax of 10%, 20% or 25%, depending on the THC concentration, a 6.25% state sales tax and a range of local taxes. 



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Theartis Butler, dispensary agent with Beyond/Hello cannabis dispensary in Bloomington, describes available products for purchase. 



According to the Illinois Department of Revenue, those taxes netted the state more than $175 million in 2020, the first year of legal recreational cannabis sales. 

The cash accrued in 2020 came from over $669 million in sales, according to figures from the Illinois Department of Financial and Professional Regulation. 

In the first month of 2021, more than $88 million in adult-use cannabis sales have been reported, which has netted the state over $30 million, according the IDR. 

How municipalities get a share of state cannabis revenue 

Under the act, all the revenue collected by the state’s cannabis taxes pools into a single fund — the Cannabis Regulation Fund — which distributes the money to state agencies to cover a range of costs and programs, like expungement of records.  

Of the remaining money left in the fund, 8% is transferred to the Local Government Distributive Fund, which deals-out money to county and municipal governments based on their population. 

From March to December 2020, the LGDF was injected with over $18 million, according to IDR data.



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Beyond/Hello adult recreational cannabis dispensary offers a variety of products at its Bloomington location on Veterans Parkway.



Of that, about four-tenths of one percent went to the Twin Cities, The Pantagraph’s analysis found. 

The city of Bloomington, which had a 2019 population of 77,330 people, received $44,461.81 from the fund in 2020.

City Manager Tim Gleason in an interview characterized the figure as “important,” explaining that as typical revenue streams have dried-up because of state-imposed mitigations amid the coronavirus pandemic, the city is willing to “take whatever we can come by.” 

The town of Normal, which had a 2019 population of 54,469 people, received $30,467.46 from the fund in 2020.

State statute mandates that local governments use money passed through the fund for “crime prevention programs, training, and interdiction efforts, including detection, enforcement, and prevention efforts, relating to the illegal cannabis market and driving under the influence of cannabis.”

Bloomington finance Director Scott Rathbun in an interview said the money was “very beneficial” to the city, but was largely a small drop in the $109 million general fund bucket.   



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Beyond/Hello recreational cannabis dispensary, with locations in Bloomington, Normal and Sauget, offers a variety of cannabis products.



He also said Bloomington does not have “any specific budgetary expenditures” related to the state mandate in the proposed budget that begins on May 1.

The LGDF revenues, he said, are deposited directly into and calculated into the city’s general fund. From there, he said, they combine with other revenues, which cover any expenditure a department, like the police department, may have.  

“We don’t designate specific dollars to specific departments within the general fund, but we ensure that dollars that are for those departments come into the general fund, and that’s what we’ve done with these tax revenues,” Rathbun said.

Rathbun said he acknowledges that the state’s intent is for the funds to be used for cannabis mitigations, and the city “just ensures that the dollars that the police department need for that activity are available.” 

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Normal finance Director Andrew Huhn said the LGDF funds will be set aside to fund crime prevention programs, training and intervention efforts, but did not say how much each would cost, or whether the funds would fully cover them. 

Eventually, he said, the town will create a specific fund for the allocation and budget accordingly.

“We’re going to work with our police department and chief of police,” Huhn said. “This is a new pot of money that is available for policing, and we want to make sure it complies with police department training.”

How Normal collects and spends its own cannabis revenue

The legalization law also carved-out a path for municipal governments to tax recreational cannabis sales, in .25% increments, up to 3%. 

McLean County in Feb. 2020 approved a 3.75% tax on sales of cannabis in unincorporated areas of the county, and a 3% tax on sales in municipalities.

Both Bloomington and Normal voted to institute their own maximum 3% tax when each municipality opted to allow cannabis businesses. 

National cannabis retailer, cultivator and manufacturer Jushi Holdings Inc. opened McLean County’s first adult-use recreational cannabis dispensary opened in Normal in May 2020 under the Beyond/Hello brand. 

The facility, which was first opened in 2016 as a medical marijuana dispensary under the name The Green Solution, supplies both medicinal and recreational cannabis. 

According to a Jushi spokesperson, the 501 W. Northtown Rd. location serves 500 customers on its busiest days. 

All recreational transactions are subject to Normal’s 3% tax. Town officials said it has yielded revenue, but would not disclose how much. 

Huhn said the first return from the tax on sales came in October, but he said the town could not release specific details on how much it raked-in revenue wise.

“It was helpful,” Huhn said. “It wasn’t anything significant that turned the tide for us, but it did increase our revenue slightly than we normally would expect.”

The funds, whatever they amounted to, are not earmarked for a specific use. They instead are transferred to Normal’s general fund for government operation expenses, Huhn said.

How Bloomington collects and spends its own cannabis revenue 

In Bloomington, where Jushi opened a recreational cannabis-only dispensary under the same Beyond/Hello brand in late January 2021, the 3% tax has been in-effect for less than a month of transactions. 

Bryan Lloyd, Jushi’s vice president of retail operations, said it was too early to release data on 118 Keaton Place location’s sales, but said the company has made $70 to $80 million between its Bloomington-Normal and Sauget dispensaries since January 2020.

“We’re seeing really great traffic in the Bloomington-Normal area between the two stores,” said Lloyd. “It continues to grow every day.”

Rathbun said the city “won’t have any visibility” on revenues generated by its cannabis sales tax until April because it takes three months for the figures to be remitted and consolidated by the dispensary, the state and the city. 

That delay means the city’s fiscal year 2022 budget, which the city council must adopt by April 30, won’t capture any of the funds raised by the tax at the new dispensary.

Rathbun said budgeteers weighed whether to include projections of the tax into the budget, but ultimately decided to practice a conservative approach. 

“We’d like to see a little history on that first,” Rathbun said. 

Gleason said if the exponential cannabis sales at the statewide level are any indicator, he expects local sales will be healthy, too.

“I think we will trend as we’re seeing at the state level,” Gleason said, explaining that the Twin Cities area is home to a population that actively utilizes recreational cannabis. 

“We are a university community, but also it’s not just that university population, you’ve got baby boomers that use it for whatever reason,” Gleason said. “This is not just the youth of our community, the young adults. I think it’s widespread, and we will follow trends in the state.” 

Where that money collected by the city’s tax goes, however, is still unclear. 

The city council when it approved the tax in 2019 left open the earmark of the funds, expecting to flesh-out that designation in future meetings. 

But after a year, one that featured a scramble to balance other funds rocked by the coronavirus pandemic, council has yet to direct where the cannabis revenue will go. 

Gleason said he plans to present the question to council in March, but he will likely have to ask it twice — now to the current council, and again after the April 6 election. 

“We need to ask it sooner versus later. But it definitely will be a follow-up to the newly seated council,” Gleason said. “So (council’s answer) could change.” 

Ward 6 Ald. Jenn Carrillo, who will remain on council through the election,  said she hopes the new council shares her understanding of cannabis legalization as a serious opportunity to generate revenue. 

Carrillo said she’d like to revisit reforms she proposed a year ago, when she served on the Cannabis Task Force. They include permitting cultivation centers to open, allowing on-site consumption at cannabis businesses and reserving dispensary permits for minority entrepreneurs.

“The social equity side of legalization hasn’t fully materialized,” Carrillo said. “We need to signal to businesses that we are a cannabis-friendly community.” 

Money generated by the city’s tax should go toward uplifting communities “that have been decimated by the war on drugs,” Carrillo said. 

“I hope that will be a new conversation with the new council,” Carrillo said. “That they also want that to be a pot of money that will be set aside for the communities disenfranchised because of the criminalization of cannabis.” 

Photos: Beyond/Hello offers a variety of cannabis products at its Bloomington location

10 photos of the downtown State Farm building

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Workers completed first-floor brickwork and windows in the State Farm Insurance Building in downtown in 1929. State Farm announced that the building will be demolished after a sale fell through.



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The State Farm Insurance Company’s downtown office building towers over downtown Bloomington in 1935.



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The lobby of the State Farm Insurance Building in downtown Bloomington included elevator operators in 1930.



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Office workers typed and filed paperwork in an upper floor of the State Farm Insurance Building in downtown Bloomington in 1930.



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Construction of the State Farm Insurance Building in downtown Bloomington was close to completion in 1929.



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Workers climbed on the roof of the State Farm Insurance Building in downtown Bloomington about 1929.



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Construction of the top floor of the State Farm Insurance Building in downtown Bloomington neared completion in 1929.



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Insurance agents marched through downtown Bloomington during a parade that swept to the State Farm Insurance Building in 1935.



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A book keeping machine at State Farm Insurance in downtown Bloomington was all the rage in the 1930s.



State Farm

State Farm

Traffic passes the former State Farm headquarters building Thursday, July 18, 2019, on North East Street in downtown Bloomington.



Contact Timothy Eggert at (309) 820-3276. Follow him on Twitter: @TimothyMEggert