As several states face troubling COVID-related budget deficits and long-term financial challenges, one state in particular is leaning into a relatively new source of tax revenue to offset ongoing economic contractions. Despite only legalizing adult-use cannabis at the end of last year, Illinois has already experienced enormous commercial success since retail sales started on January 1. In total, Illinois dispensaries have generated over $300 million in recreational sales this year and $52 million in tax revenue within the first six months of operation.
Illinois has emerged as one of the most desirable cannabis markets in the country, and discerning multi-state operators (MSOs) are eager to strike while the iron is hot. This week, AWH, one of the fastest-growing MSOs in the country with facilities in Illinois, Michigan, Ohio, Massachusetts and New Jersey, filed a definitive agreement to purchase Modern Cannabis (MOCA) dispensaries, one Chicago’s first legal retailers that came online in 2016. Once the acquisition is approved by the Illinois Department of Financial and Professional Regulation, AWH will operate in Illinois’ largest cannabis market and hold six retail licenses in the state. The MSO will continue to run both River North and Logan Square retail locations under the MOCA brand.
“We are pleased to enter the third largest city in the United States through our pending purchase of Modern Cannabis. MOCA has been a leading player in the Chicago market, and we are excited to pair it with our Illinois Supply & Provisions (IS&P) dispensaries which include our top performing retail outlet in the state in Collinsville,” said AWH Founder Abner Kurtin.
News of AWH’s Chicago expansion comes on the heels of the company closing a $69 million funding round in August. AWH will direct $40 million of its latest injection of capital toward retail and cultivation operations. In the coming months, AWH will continue to seek new acquisitions and partnership opportunities to reach Illinois’ limit of 10 licenses per ownership group. In addition to aggressively expanding its retail footprint this year, AWH has also garnered attention for its state-of-the-art cultivation and processing center in West Central Illinois, which produces its popular line of Ozone branded cannabis products to licensed retailers across the state.
Illinois’ market momentum will likely escalate in the next year as the state prepares to issue 75 more recreational dispensary licenses in the near future. Operators in the state are also strategically positioned to serve consumers in neighboring states that have yet to legalize recreational cannabis, including Missouri, Wisconsin, Iowa, Kentucky and Indiana. Despite considerable tailwinds in the local economy, companies like AWH must stay operationally nimble and strike a delicate balance between brick-and-mortar and the rise of cannabis e-commerce in order to thrive in this new digital retail landscape.