Illinois Cannabis Accounting Services
At CJBS, we are Cannabis CPAs Who Care.
CJBS intricately understands the tax and accounting challenges of state-legal medical and adult-use cannabis businesses–and we are here to serve as your partner in navigating those challenges. The cannabis industry is unique, as is your business. That’s why the CJBS Cannabis Team is focused on tailoring solutions to meet your company’s needs.
Whether you operate as a new or established cannabis cultivator, processor, and/or retail dispensary, our experts are here to help you grow and scale your business in today’s ever-competitive environment.
Cannabis in Illinois
For consumers, purchasing cannabis products is fairly straightforward.
Behind the scenes, however, cannabis businesses must contend with tax complexities at the federal, state, and local levels, such as:
- IRS Tax Code Section 280E, which severely limits the deductions a cannabis business can take
- Illinois tax statutes that differ depending on the types of products cultivated, manufactured, and sold
- Local taxes imposed by municipalities and counties
- Additional taxation types, including the cannabis cultivation privilege tax, medical cannabis cultivation privilege tax, and the cannabis purchaser excise tax.
Cannabis Taxes in Illinois
In Illinois, cannabis taxes are imposed at the wholesale, retail, and purchaser levels. According to the Illinois Department of Revenue:
- The Cannabis Cultivation Privilege Tax rate is 7% of gross receipts from the first sale by a cultivator.
- The Medical Cannabis Cultivation Privilege Tax rate is 7% of the sales price per ounce.
- Retailers must pay an occupation tax on dispensary sales (these vary depending on the municipality), as well as a standard state sales tax of 6.25%.
- Cannabis purchasers must pay excise taxes at the following rates, based on product form and potency:
- Cannabis with a THC level at or below 35%: 10% of the purchase price
- Cannabis with a THC level above 35%: 25% of the purchase price
- All cannabis infused products: 20% of the purchase price
Seeking For Financial Solutions? We Can Help.
If you’re thinking, “Cannabis taxes get complicated and add up quickly,” you’re not alone. That’s where we come in.
The CJBS team has deep experience in cannabis tax laws and accounting in the Chicago area and throughout Illinois. Working hand-in-hand with our cannabis clients, we provide a full suite of services—including compliance expertise, tax-saving solutions, and business strategies—to help you plan for long-term success.
Cannabis in Illinois FAQs
When do I need to hire a cannabis accountant in Illinois?
In the cannabis industry, it is always better to be proactive, rather than reactive. To help prevent your business from costly fees or even greater legal penalties, you should hire an accountant as soon as you submit your application for licensure.
Are there any financial requirements in the Illinois license application?
Dispensaries (when application periods are open) are subject to a $5,000 application fee. Annual licenses are $30,000 for new dispensaries and $25,000 thereafter for each annual renewal. Cultivators are subject to a $25,000 application fee. Annual licenses are $200,000 for new cultivators and $100,000 thereafter.
Adult-use retailers are subject to a $5,000 license fee and a $60,000 annual renewal fee. Adult-use craft growers are subject to a license fee of $5,000 and annual renewal fees of $40,000. Adult-use infusers (also known as processors or manufacturers) are subject to a $5,000 license application fee, and an annual renewal fee of $5,000. Adult-use transporting organizations are subject to an application license fee of $5,000, and a $10,000 renewal fee.
Social equity retailers, cultivators, craft growers, infusers and transporting licensees are eligible to have some of these fees either lowered or waived.
What types of tax deductions can cannabis businesses take?
Cannabis businesses are very limited on the types of deductions they can take beyond cost of goods sold (COGS) because of IRS Tax Code Section 280E. In some instances, businesses will be able to take additional deductions, such as the research and development (R&D) tax credit, for example. Nuances like these illustrate why it is important to work with an accountant that is up to date on cannabis tax laws.
Our Core Values Guide Everything We Do
Our three core values — Trust, Collaboration, and Creativity — guide everything we do at CJBS, from our innovative client work to our interactions with each other. Our team has diverse personal backgrounds and specialties, but we share a common culture rooted in these values.
Trust is essential to all our work, but the stakes can be especially high for cannabis businesses, which face a higher risk of bankruptcy and IRS audits.
Close collaboration with our clients, matched with consistent and proactive communication, ensures that we’re always providing you with the insights, tools, and tactics for your cannabis tax and accounting needs.
Creativity allows us to solve our cannabis clients’ unique challenges, such as having few traditional banking options and no bankruptcy protection.
Our firm is guided by our employees’ integrity. In a burgeoning industry like cannabis, it is more important than ever to hold ourselves to high ethical standards, and follow through on what we say we’re going to do.
We operate with transparency by communicating to our cannabis clients with unwavering candor, honesty, and respect.
Your Cannabis Accounting Experts
Matt Bergman, CPA and CJBS senior partner, has been with the firm since 1997 and has specialized in cannabis accounting and tax services since 2015, when an existing client won a license under the Illinois medical cannabis pilot program. Matt worked hand in hand with them to help grow and scale their business, safely and efficiently. That business grew rapidly and was soon acquired by one of the country’s largest MSOs (multistate operators), and they remain a CJBS client to this day. Matt works with clients from small startups to the country’s biggest MSOs. After growing up in Deerfield, IL and Boston, MA, Matt lives in Wilmette, IL with his wife, two children, and three dogs.
Ryan Guedel, CPA and CJBS partner, has been with the firm for 10+ years, and currently works with clients in cannabis, real estate, manufacturing, construction, and distribution. Ryan coordinates due diligence engagements, carries out audits and reviews, and works on business development and taxation for the firm. A devoted professional, Ryan gives his all with each and every client interaction. His personal motto is “hard work and more hard work.” Ryan currently resides in Wheeling, Ill., with his wife Julie, son Cole Jameson, and rescue dog Pinky. He likes the area for its proximity to the CJBS offices. His hobbies include cheering on the NY Yankees, mixed martial arts, and motorsports.
News & Updates
Stay current on the latest Cannabis industry developments and find out what it means for you and your business.