As Illinois hits record marijuana sales, Ottawa sees decrease

While the state of Illinois is seeing another year of record sales-tax revenue from the use of medical and recreational marijuana, the numbers for the city of Ottawa are going in another direction.

While the Illinois Department of Financial and Professional Regulation has noted 2024 as a fourth consecutive year of increased sales – with the $2 billion in sales resulting in $490 million in sales tax for the state – Ottawa’s marijuana sales tax revenue declined for the third straight fiscal year and is on track for a fourth.

According to Mayor Robb Hasty, in 2022 the city took in $337,542 in sales tax from marijuana purchases for an average of $28,128 per month.

However, those numbers fell to $293,072 and $24,422 in 2023, then to $246,202 and $20,516 in 2024.

In the nine months since the 2025 fiscal year began on May 1, the city has collected $145,923 in sales tax, an average of just $16,213 per month.

That decrease of 42.4% over those three-plus years has made it difficult for Ottawa to count on those funds.

“Obviously, the tax from something like that is nice for the city to be able to do things with,” Hasty said. “I appreciate that it’s a source of revenue that seems to do well. Our police department definitely sees a benefit from it because by law some of those funds have to go to them.

“However, the idea you could earmark those funds for something, I would not bet the farm on it. It has continued to go down, and I don’t see anytime soon a reversal of that.”

Jake Smith, general manager of the Verilife Dispensary at 4100 Columbus Ave. in Ottawa, declined to provide specific financial information about his store, per company policy. However, he did say that sales at the store has “come up a little short” of the company’s high expectations for the last few years, but overall that business and the industry as a whole are still “headed in the right direction.”

He believes that the dispensaries in Illinois are losing customers to closer Midwest states like Michigan, where the “competition is more cut-throat” and products are less taxed.

But Hasty feels Ottawa’s situation is the result of the availability of the product not just locally but all over the state – as of January, there are now more than 170 dispensaries in Illinois – that has cut into the sales at the local business.

“Peru has a dispensary now and there are a few in the Aurora area, so we’re seeing our tax (revenue) go down,” Hasty said. “People in Peru who used to come to Ottawa, with the opening over there, they aren’t coming to Ottawa anymore. That’s my theory.

“In my own opinion, there is a natural plateau already with marijuana. I’m sure there were people who decided to try it and use it a while because it no longer had the stigma associated with it, but it’s not something that is socially acceptable as liquor or gaming or other things like that … It’s not like some of the other ‘sin taxes’ that typically grow with time. This one has diminished.”

Hasty did add that while the marijuana sales tax numbers fall, the city’s tax revenue from gaming continues to climb.

“That’s something the council talks about from time to time, that you would think that would plateau at some point and it really hasn’t. It continues to grow,” the mayor said. “Every time another restaurant goes in with six more machines, you have to think that at some point, these have to stop producing revenue, right? But they haven’t. It continues to go up.”