Cannabis megastores in New Buffalo, Michigan, just a short drive from Chicago, are luring Illinois consumers with lower prices, ample parking, and broad product selections.
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This trend has created a dilemma for Illinois, where cannabis tax revenue supports vital state programs. In September, Illinois saw a rare dip in cannabis sales, from $139.5 million in 2023 to $136.5 million in 2024, a decline since the state first legalized recreational use in 2020.
Illinois cannabis businesses feel the impact. NuEra Cannabis COO Laura Jaramillo Bernal explains that Michigan's cheaper cannabis is drawing Illinoisans across state lines, heightening competition among Illinois dispensaries and putting pressure on prices. The increased competition in Michigan has been driven by New Buffalo’s recent surge in cannabis stores. Though the town of just 2,500 people only began accepting dispensary applications in April 2023, it has already approved around two dozen applications and hosts seven operational stores.
On a recent visit to JARS Cannabis in New Buffalo, Illinois and Indiana plates filled the 50-car parking lot. Despite the 25-minute wait, Illinois customers were still attracted to prices like $14 for Camino Midnight Blueberry gummies, which cost $26 at Illinois stores, where taxes are also higher.
Transporting cannabis across state lines presents legal risks, as driving through Indiana with cannabis is illegal. However, Indiana police report limited transparency on enforcement, making it uncertain how often Illinois buyers face penalties for cannabis possession.
Ultimately, while New Buffalo’s cannabis options offer Illinoisans convenient alternatives, the trend poses a challenge to Illinois’ cannabis tax revenue and involves legal risks for cross-border shoppers. And in a lighter coincidence, New Buffalo also celebrated the arrival of its first Rainbow Cone this summer, adding a little extra incentive for Illinois visitors.
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