The heavy volume of cannabis sales in Illinois to out-of-state residents may boost the "domino effect" and help spur legalization in other states, especially nearby ones, Cantor Fitzgerald said Tuesday in a look at Illinois' numbers in the first month of legal recreational sales there.
Illinois announced Monday that recreational sales during January were $39.2 million. The state legalized recreational sales starting Jan. 1.
Cantor's Read-Through On Illinois Figures
Cantor Fitzgerald analyst Pablo Zuanic said in a note to investors that 22% of sales, or $8.6 million, were to out-of-state residents.
"This should lend further credence to the domino effect thesis: i.e., more neighboring states to follow," the analyst said.
The Illinois sales figures also "support even the most bullish projections for recreational consumption in the state," which was the first to legalize recreational sales through a legislative-led process rather than by initiative or petition, Zuanic said.
If Illinois follows Colorado's experience, it should expect to quintuple sales by 2023, he said.
On average in January, there were 50 recreational stores in Illinois, or about 3.9 stores for every 1 million people.
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Michigan Sales Expected To Rise In Second Month
Michigan also recently legalized recreational cannabis, with sales starting there on Dec. 1.
Michigan officials reported last month that recreational sales were about $6.5 million in December, the first month after legalization.
Michigan had fewer retailers than Illinois at first, with only three active retailers during the first week of legal sales in Michigan, though that number is now above 50.
Final Michigan sales figures for January aren't in, but are expected to be higher, with the first two weeks of the month having outpaced December sales.