The Cole Memo

Six years in, incumbent cannabis corporations still take in nearly 79 cents of every dollar in statewide revenue.

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CHICAGO, June 17, 2026. Illinois dispensary shelves hold more cannabis brands than at any point since legalization: 264 by the end of 2025. A new report finds that those brands answer to a shrinking set of owners, and that 17 companies that controlled production before adult-use sales began still take in nearly 79 cents of every dollar.

The report, The Illusion of Competition, from Parabola Center for Law and Policy, maps every active cannabis brand in Illinois to the parent company that controls it across 16 quarters of Headset retail sales data. Count the owners rather than the labels, and the market is consolidating. After 10 consecutive quarters of decline, concentration began climbing again in 2025, and the fourth quarter was the first on record in which more brands left the market than entered.

Key Findings:

• Active brands climbed from 100 in early 2022 to 264 by the end of 2025. Over the past year alone, the parent companies behind them fell from 91 to 79.
• A few firms control production. Seventeen incumbent companies hold 20 of the state’s 21 large cultivation licenses, the bottleneck behind their dominance. Those 17 incumbents fall into two groups: multistate operators with national footprints, and large Illinois-only medical cultivators that predate adult-use sales. Together they take in nearly 79% of revenue, most of it captured by the multistate operators.
• Volume and value have split. Multistate operators (the national chains that grow, process, and sell across many states) moved 42% of units but took in 69% of revenue. Independent craft growers moved 27% of units but earned just 8.1% of revenue.
• Market concentration is rising again. The decline that ran through 2024 reversed in 2025, and the four largest companies’ combined revenue share rose from 45% to 47%.
• The equity gap persists. The state’s 2024 Disparity Study found minority- and women-owned businesses held 59% of dispensary licenses but earned 12.5% of dispensary revenue. Three years of data since then show little has changed.

Independent craft growers are boxed into flower. The highest-margin products (concentrates, vapes, and edibles) all start with concentrate extracted from raw cannabis, and a craft grower can produce that concentrate only inside its own grow. With just 14,000 square feet of canopy, against the 210,000 an incumbent cultivation center can run, a craft grower can’t spare any of it to feed an extraction line. The standalone license that would let independents extract at commercial scale has never been issued. The profitable products stay with the incumbents, and independents are left with flower, the one product oversupply has hit hardest, with prices down roughly 40% since 2022. Incumbents can absorb that drop because their margins everywhere else cover it. Growers who sell flower alone cannot.

“Nobody has to discriminate for this market to come out unequal,” said Damian Fagon, Policy Director at the Parabola Center and a co-author of the report. “The license head start, the canopy caps, the extraction license the state still hasn’t issued, all of it is race-neutral on paper. Stack it together and the people this law was written for can’t make real money off their own customers. The state wrote those rules. It can rewrite them.”

“In 2019, Illinois lawmakers made promises that cannabis legalization would be a catalyst to repair the harms that the War on Drugs did to Black and Brown communities,” said Douglas Kelly, Executive Director of the Cannabis Equity Illinois Coalition. “Six years later, the people it was apparently written for have been largely shut out of the regulated industry, and those who made it in are buying their product from the same companies they were supposed to compete with. Our members have been living this. The fixes aren’t complicated. Start by putting cannabis under one department that can act.”

What the Report Does Not Claim:

It does not allege that any Illinois company broke the law. It documents the market structure the state’s own licensing rules built, the same conditions behind the conduct now being litigated in Ohio and Missouri. Falling prices benefit consumers; the open question is who captures the value that remains, and whether the growers whose entry drove prices down can survive on flower alone. By the federal government’s standard measure, Illinois still rates as unconcentrated, but that measure counts only market share and misses the vertical integration documented here, where the same firms control growing, processing, and retail. The figures are panel-based estimates. Where ownership was unclear, the authors credited the smaller operator, so the real concentration is, if anything, higher than reported.

The report lays out six steps, most of them already recommended by the state’s own 2024 Disparity Study and none yet adopted. Three matter most. A standalone extraction license and a higher canopy cap would let independents make the products they now buy from competitors. One cannabis department with real authority would replace the five that share oversight today. And parent-company disclosure would stop a shelf full of brands from hiding how few companies stand behind them.

The stakes reach beyond Illinois. The largest operators here sell across a median of six states; the independent craft growers sell in one. For now, a single-state grower is shielded from those national firms only because cannabis can’t legally cross state lines. If federal law changes that, the incumbents’ hundreds of thousands of square feet of excess growing capacity would let them supply much of the country, and that last protection would be gone.

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The Illusion of Competition: Market Concentration in Illinois Cannabis, 2022-2025 is available at parabolacenter.org/illusion-of-competition.

An accompanying op-ed by report co-author Hedy Yang, Economic Research Fellow at the Parabola Center, appears in Marijuana Moment on June 17.

Parabola Center for Law and Policy is a nonprofit that develops legal and policy tools to keep cannabis markets competitive and prevent corporate capture.

The Cannabis Equity Illinois Coalition is a grassroots nonprofit founded in 2019 to ensure the communities most harmed by the war on drugs are prioritized in cannabis legalization.

Media contact: Damian Fagon, Policy Director, Parabola Center for Law and Policy, damian@parabolacenter.com. Available to answer questions and to connect reporters with co-author Hedy Yang and the Cannabis Equity Illinois Coalition.

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