Cannabis is legal in Illinois for both medical and recreational use. Illinois became the eleventh state in the US to legalize recreational marijuana effective January 1, 2020.

With the passage of the Illinois Cannabis Regulation and Tax Act in 2019, Illinois became the first state in the nation to legalize recreational sales by an act of the state legislature, as previous states had legalized sales by voter initiatives. Vermont legalized recreational use, but not sales, through its legislature (later legalizing sales after Illinois had already done so). At full maturity, Illinois is expected to generate between $2 and $4 billion in annual revenues from recreational sales. A first in the nation, Illinois will also expunge an estimated 700,000 marijuana-related police records and court convictions in a phased approach forecast to be completed by 2025. Retail sales from recreational cannabis in Illinois average an estimated $40 million in revenue each month since legalization and have allowed police to acquire an estimated $3 million from marijuana related civil asset forfeitures each year.

Since 2014, the Illinois Medical Cannabis Patient Program (MCPP) has also enrolled over 172,000 qualifying patients in the state's medical cannabis and opioid alternative programs across 110 dispensaries offering a lower tax rate when compared to recreational transactions.

In 2022, the 113 dispensaries across Illinois sold $1.5 billion worth of marijuana products.