A new study out of Illinois gives Kentucky a useful, honest data point in the cannabis debate: when a recreational dispensary opens, nearby businesses tend to see more shoppers — and more sales.
The study, published October 13 on SSRN and titled “Like a Good Neighbor? Demand Spillovers from Recreational Cannabis Dispensary Openings to Nearby Retail Establishments,” looked at recreational dispensary openings in Illinois between 2021 and 2024. Researchers combined administrative records of dispensary openings with monthly data on customer counts, transactions, and revenue at surrounding establishments, comparing business activity before and after openings.
What they found:
- Nearby businesses averaged a 7.47% increase in revenue after a dispensary opened.
- Transactions rose 8.01%, and customer counts rose 6.82%.
- The lift came from more people coming to the area, not from each shopper spending more — revenue per customer and revenue per transaction stayed essentially unchanged.
That last point matters. Dispensaries didn’t make existing shoppers spend more. They brought new foot traffic to the commercial area — and that traffic spilled over to neighboring shops, especially on weekends and in more walkable neighborhoods.
What the study does NOT show
An honest read also means naming the limits, and this study has two important ones:
- Food and beverage shops and retailers selling essential goods saw significant gains. Businesses selling nonessential products showed no statistically significant change.
- The positive effects were concentrated among chain retailers. Independent businesses showed no statistically significant improvement.
So this is not a claim that every neighboring business benefits, or that mom-and-pop shops automatically win. It’s a claim that regulated dispensaries can draw extra shoppers to an area, with the clearest gains for food, drink, and essential-goods retailers — and stronger effects where people can walk between shops.
What it means for Kentucky
Kentucky is not Illinois, and Kentucky’s program is medical, not recreational. This study does not prove Kentucky medical dispensaries will produce the same numbers.
But it does undercut the idea that a regulated cannabis shop is bad for a neighborhood’s economy. A licensed, regulated shop brings people in — people who then stop at the restaurant next door, the grocery, the gas station. That’s the “good neighbor” effect in plain terms.
Kentucky already has medical dispensaries open across the state, including KCFC sponsors working in their communities. The question for Kentucky voters isn’t whether cannabis exists here — it does, in a medical program. The question is whether adults 21 and over should still face criminal charges for possessing up to one ounce, or for cultivating, harvesting, and storing up to five plants for personal use.
Our proposed amendment would let Kentuckians vote on exactly that: decriminalization, not a new retail program. The economic evidence from Illinois is one more reason to stop treating cannabis shops — and cannabis consumers — like a threat to a neighborhood, and start treating them like neighbors.
Sign the petition and share it: change.org/LetKentuckyVote
Call your legislators: 1-800-372-7181 (Kentucky legislative message line)
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