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Monday, Mar. 23, 2026

Is Wisconsin losing millions in tax revenue to states where cannabis is legal?

Madeline Heim / Milwaukee Journal Sentinel, Wisconsin Watch
yes

Cannabis isn’t legal in Wisconsin, so residents are purchasing it in states where it is, generating tax money for those states. 

Wisconsin borders three states with legal recreational cannabis: Michigan, which legalized it in 2018; Illinois, which legalized it in 2019; and Minnesota, which legalized it in 2023. 

Illinois tracks cannabis sales by in-state versus out-of-state purchasers. A 2023 analysis from Wisconsin’s nonpartisan Legislative Fiscal Bureau found Illinois collected $36.1 million in tax revenue in 2022 from out-of-state residents who purchased cannabis in counties bordering Wisconsin.

About half of cannabis sales in 2022 at dispensaries in Illinois counties that border Wisconsin were to out-of-state residents, the analysis found. 

Michigan and Minnesota do not track nonresident cannabis purchases. In Michigan, marijuana tax revenue is shared with local governments and tribes, as well as the state’s School Aid and Transportation funds.

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