Gov. J.B. Pritzker’s budget proposal will be $382 million in the red until lawmakers pass bills to legalize sports gambling and recreational marijuana use for adults.

The next budget year for Illinois begins July 1. Lawmakers have until May 31 to pass a budget with simple majorities. Pritzker’s budget plan calls for spending more than $38 billion. To balance his budget proposal, the governor is banking on new streams of revenue, including taxes on managed care organizations and plastic bags, is money from the licensing of legal cannabis growers and sellers, and legal sports betting license.

Pritzker’s budget relies on $382 million in revenue from sports betting and cannabis license fees.

A marijuana legalization advocacy group said once Illinois does legalize recreational pot, the demand is going to skyrocket, which will mean there will have to be more producers.

Kelvin McCabe, a member of the board for the Illinois Chapter of NORML, said a demand study found Illinois’ medical pot program produces 15,000 pounds of marijuana a year. If recreational use is approved, he said there would need to be 1.3 million pounds a year to fulfill a consumer base that’s expected to multiply exponentially.

“We do anticipate that we will need hundreds, and hundreds more licensed producers, different sizes, it’d be nice if they could be spread out to different communities,” McCabe said.

State Rep. Carol Ammons, D-Urbana, has a bill she filed at the statehouse to legalize recreational use for adults. She said she plans to amend it.

“We want small entrepreneurs to be able to participate in the industry,” Ammons said. “Under the current discussion, there are no provisions for that. So my amendment is going to correct that.”

Gov. J.B. Pritzker is counting on $170 million in revenue from pot licenses in his budget that starts this summer. Budget Director Alexis Sturm told the House Revenue and Finance Committee how the administration came up with that number.

“If there was a potential for 2,000 cultivator licenses, those could be marketed at potentially $100,000 each, which would bring some money in for fiscal year ‘20,” Sturm said as a rough calculation.

It’s estimated the tax revenue from the recreational cannabis market, beyond cultivation and dispensary licenses, could be up to $700 million a year, if not more.

State Sen. Heather Steans, D-Chicago, is one of the chief negotiators for getting legislation together to legalize cannabis for adult use. She said that she and other interested stakeholders have met with the governor.

“Hopefully we’ll have something to put down and file sometime soon,” Steans said.

State Rep. Mike Zalewski, D-Riverside, is taking the lead on legalizing sports betting. He said whatever bill ultimately surfaces, he wants specific provisions.

“Good consumer protection, transparency in the process, I want it to happen relatively quickly,” Zalewski said. “I don’t want the gaming board to sit for two years on it. I think that’s a view shared by a lot of stakeholders. And I want to make sure that our state is a good beneficiary of what we do as a result.”

Pritzker’s budget relies on $212 million from sports betting licenses.

“If we did 20 sports betting licenses and sold them for $10 million each upfront it would generate $200 million,” Sturm said. “In that model, we would envision sort of an upfront fee traded off by a credit down the line so then as the tax collections came in in future years there could be some recovery of the economic value of that license by receiving tax credits there.”

She said a similar tax credit down the road could also be worked into the legal cannabis marketplace.

“There’s a lot of different interested parties on what the structure would look like,” Sturm said.