Whitney Economics has examined the potential impacts that bans of the sale and production of hemp-derived cannabinoid products would have at the state and national level. The company conducted a survey in Illinois in March 2025 with Illinois hemp retailers, manufacturers and distributors from a revenue, state and local tax level as well as from an employment and earnings perspective.
"The hemp-derived cannabinoid market is significant contributor to both the Chicago and Illinois economy. It is a major source of employment, wages and state and local tax revenues. Based on a survey conducted in March 2025, respondents indicated that if bans were imposed against the sale and production of hemp-derived cannabinoid products, these companies would either go out of business or else leave the state entirely. This would result in job losses, less tax revenue and an increase in expenditures by state and local governments in order to support displaced workers," Beau Whitney says.
Illinois hemp derived retail analysis
The state has roughly 1,014 businesses supporting hemp-based retailers. These retailers generate over $870 million in revenues and have an economic impact of $2.1 billion state wide. Including wholesale and manufacturing this increases to $2.7 billion in total revenue with an economic impact of $6.5 billion. These numbers are based on surveys of Illinois businesses conducted in March of 2025. These businesses generate approximately $169.1 million in tax revenues for the state.
© Whitney EconomicsSource: State of Illinois, Whitney Economics Illinois Hemp Cannabinoid Survey (March 2025)
Hemp-derived cannabinoid based revenues
The estimated revenues derived from hemp cannabinoid based products is $2.7 billion annually.
© Whitney EconomicsSource: Whitney Economics Illinois Hemp Cannabinoid Survey (March 2025)
Employment and wages
Overall, the Illinois hemp-derived cannabinoid industry, not including cultivation, employs nearly 13,500 workers statewide, paying over $545 million per year in wages,
There are roughly 4,750 retail jobs associated with hemp-derived businesses. Wholesalers add an additional 6,300 jobs and manufacturers add 2,500 jobs. Wholesale jobs are substantial as Illinois serves as a regional hub for other states.
© Whitney EconomicsSource: Whitney Economics Illinois Hemp Cannabinoid Survey (March 2025)
Illinois hemp-derived product sales breakdown
The sector breakdown of percentage of sales shows a rather even distribution between THCA flower, vapes, edibles and beverages. Beverages were anticipated to increase in 2025, in terms of total market share, coming at the expense of mainly vapes and edibles, but also on THCA flower. High state and local marijuana taxes are driving consumers into the hemp-derived market at all levels.
© Whitney EconomicsSource: Whitney Economics Illinois Hemp Cannabinoid Survey (March 2025)
Impact of excessive marijuana taxes on consumer purchasing behaviors
A separate report analyzing the impacts that cannabis taxes are having on consumer purchasing decisions shows that by lowering the state and local marijuana taxes, the sales of marijuana will increase as will tax revenues. However, a simple hemp ban will not have a similar effect, as consumers will acquire marijuana and hemp products either online or else in other states like Michigan or Missouri, where prices and taxes are substantially lower. (Source: Cannabis Taxation in Illinois – Whitney Economics – April 2025)
Chicago Specific Data
Chicago has roughly 220 identified retail businesses. (These are retailers with a Chicago address). Wholesalers, distributors and manufacturing data is harder to come by. Of these retailers, they generate roughly $475 million in sales. CBD sales add roughly $30 million to this number, but this is a rough estimate as CBD is so common in cosmetics and other non-intoxicating products. Retail sales tax revenue for Chicago is estimated to be $31 million per year for sales tax alone. That does not include $5.0 million - $7.5 million in licensing fees.
© Whitney Economics
Retail employment is also significant at 1,030 - 1,250 workers, generating $37,214,900 in wages.
© Whitney Economics
Impact of bans on firms and employment
Most survey respondents indicated that if there were legislation that imposed severe restrictions or prohibited sales, they would either move to another state or else go out of business. "Survey respondents told me individually that they were already winding down retail operations in favor of a distribution model," Beau Whitney says.
Impacts of Statewide Restrictions
Overall statewide, the impact of restrictions or bans is pronounced. Negative numbers indicate losses in the chart below.
© Whitney Economics
For more information:
Whitney Economics
Beau Whitney
(503) 724-3084
www.whitneyeconomics.com
