New Fairview Heights marijuana dispensary hopes to generate thousands in sales tax
A new dispensary expected to generate more than $800,000 in new sales tax revenue for the city of Fairview Heights opened Thursday.
Ascend Wellness Holding’s Fairview Heights location at 114 Commerce Lane is its second and largest in the metro-east. It opened its doors to a line of waiting customers Thursday morning.
Ascend Chief Revenue Officer Chris Melillo said the dispensary expects a “high amount” of revenue from the new location and estimated it could serve up to 1,000 customers a day.
“We know that there’s a growing demand here that continues to grow at a rapid pace and it’s our job to continue to serve these consumers,” Melillo said.
He added that the layout of the store is much larger than the original Collinsville location becaues of the high demand for their product. The Fairview Heights location is in a 5,100 square-foot building where a Babies-R-Us once operated.
It is the largest Ascend dispensary in the state.
“There’s a lot of similarities between this store and our store in Collinsville but one thing that we did learn in Collinsville is that we probably needed a bit more room,” he said. “The demand is pretty high so we made it a larger format.”
Melillo said the new store will further build on the changes made during the COVID-19 pandemic that allowed customers to order cannabis online for express pick up and pre-order.
The dispensary is open seven days a week from 7 a.m. to 9 p.m.
Partnership with Fairview Heights
Fairview Heights Mayor Mark Kupsky, who stood alongside Melilo during the ribbon-cutting ceremony, said the dispensary is good news, not just for Fairview Heights, but for all of the metro-east.
“We’re excited to see new businesses open in our community, particularly at this site because the company that was here was bankrupt and it’s a large building right off the interstate,” Kupsky said.
Fairview Heights was slow to move on allowing cannabis sales in the city after it was legalized at the start of 2020.
Kupsky said the city took a “conservative approach” to address the concerns of residents by putting in zoning restrictions and mulling over the decision over a several-month period.
“Cannabis has been a controversial issue and it’s been a challenge for communities to try to address,” Kupsky said. “We didn’t go through with the approval to allow cannabis in the city as quickly as some other communities and we took time to kind of learn what other communities were doing so we can make sure we put the right things in.”
The city ended up settling on zoning rules that allow cannabis sales but are “restrictive,” Kupsky said. The site of Ascend’s new dispensary was one such location that met zoning rules that allow for sales, notably that it’s far enough away from schools and churches and in an area zoned for commercial use.
“For us, the most important thing was putting it in the right location to meet the concerns of the residents and guests of our community. We wanted to make sure, like many businesses, that it wasn’t close to schools and churches,” he said.
A needed boost during COVID
Kupsky said the expected boost to the city’s sales tax revenue comes at a time when COVID-19 has caused a sharp decline in revenue to the city. He said the dispensary alone is estimated to generate roughly $800,000 in sales tax revenue in 2021.
“We rely heavily on sales tax, we don’t have property tax and like everyone online sales have really hurt sales taxes over the years,” Kupsky said. “This will account for around 10% of our sales tax revenue, give or take a little bit.”
The Illinois Department of Financial and Professional Regulation reported in 2020 a total of $669 million was spent on legal marijuana, with $496 million being spent by residents from within the state. Roughly $56 million worth of those sales came from the southern region of the state.
As of February, the department had reported $169 million had already been spent on cannabis statewide.
The tax revenue from Ascend’s Fairview Heights locations will be put into specific city funds, Kupsky added. Fifty percent of the tax revenue will go into the city’s police pension fund, while 25% will go toward paying off long-term debts like the city’s new recreational center. The rest will go toward the city’s general operating fund.
Kupsky said beyond the tax revenue, the addition of new businesses is good news for the city and the metro-east as a whole because it brings in customers that can be shared by businesses and cities.
“This will be a big boost for the metro-east,” he said. “As people come to the site they’re going to stop at the local restaurants, they’re going to shop, they’re going to go to Belleville, O’Fallon and East St. Louis for things. So it really helps bring many more people to the Metro-east.”
This story was originally published March 25, 2021 at 1:13 PM.