Illinois

Illinois Municipalities Announce Plans to Allow Adult-Use Cannabis Businesses

Local municipalities in Illinois are moving to adopt ordinances that permit adult-use cannabis businesses. Illinois’ new adult-use cannabis law provides medical marijuana establishments with priority for obtaining an adult-use license, which may begin operating in January 2020. We expect municipalities that currently allow medical marijuana businesses to amend zoning requirements to accommodate adult-use cannabis businesses. We are also seeing new municipalities proposing ordinances to enter into the new market.

Over the next couple of weeks, the cities of Homewood, Oak Park and Addison will hold public meetings to adopt adult-use cannabis ordinances. Medical marijuana establishments currently operate in all three cities. Other Illinois cities such as Lincolnwood, Crestwood, Mcleansboro, Wadsworth, Galesburg, and Northbrook are proposing ordinances to permit adult-use cannabis.

Those looking to enter the Illinois cannabis market should start looking for a city to establish a business as the process is lengthy and can be just as competitive as the state process. Starting a business in a city that is new to the cannabis industry can be risky as local sentiment and litigation can cause a city to quickly exit or cease movement on an ordinance.

We expect the competition for real estate in these cities to heat up as potential adult-use cannabis businesses seek a place where they can start construction. Real estate speculation in the cannabis industry is increasing as brokers continue to obtain exclusives on potential real estate sites. Market entrants should build in sufficient time and money to finding a location.

7 Things You Can Do Now to Prepare for Illinois' Recreational Marijuana Application Process

The Illinois Legislature passed a bill on Friday that legalizes adult-use marijuana businesses. Entrepreneurs who want to start a cannabis business should start preparing now in order to ensure a place in the front of the line.

The legislation requires the Department of Agriculture and the Financial and Professional Regulation to begin accepting applications for early approval adult use businesses within 60 days of new law’s effective date. These businesses may begin selling adult use products on January 1, 2020. This market is limited as there are currently only 55 licensed medical dispensaries and 22 licensed cultivators in Illinois.

A total of 75 dispensary licenses will be granted by May 1, 2020. The dispensary license application will be made available no later than October 1, 2019.

Below are 7 steps that you should take to ensure that you receive a license. Application packages should be organized, professional and easy for the regulator to find what they need.

  • Apply as an Early Approval Adult Use Businesses. Current Medical Marijuana license holders may apply within 60 days as an early approval adult use business that can sell adult use products on January 1, 2020. The accelerated access to the market comes with a price. Medical Marijuana licensees choosing this route will pay a $30,000 nonrefundable fee, a 3% cannabis business development fee, and a social equity fee.

  • Capital. Start looking for smart capital. Your corporate structure should be simple and representative of your capital raises. Resist the urge to give away shares in return for human labor. Vet your investors to ensure that the money is coming from a legal source and that the investor does not have a criminal background. Applicants must show that they have access to $100,000 in liquid assets.

  • Understand Illinois’ scoring methodology. The Department of Agriculture and the of Financial and Professional Regulation must utilize a fair scoring methodology for comparing competing applications. Below are some high-level activities that can help prepare you.

    • Ensure that all owners, officers, managers have the character, veracity, background, qualification, and experience to fund the business. Regulators will perform background checks and reject applications in which individuals lied. Regulators also want to know that the managers have the knowledge and expertise to run the business successfully.

    • Create a business plan. The regulators will review the business plan to ensure that adequate supplies of marijuana will be provided and that adequate safety and security plans are in place to prevent diversion. The business plan should show that there are adequate funds to cover the first year operating expenses. Business plans should also show how the business will comply with regulations including seed-to-sale tracking, training, recordkeeping, and day-to-day operations.

    • Staffing plan. Develop a staffing plan that shows how you will ensure that qualified individuals will be running the shop, and describe the business’ consent to enter into a peace labor agreement with employees.

    • Create a security plan. The regulators will want a site plan that shows intended security including video cameras, areas of coverage, automatic and immediate alarms, limited access areas, lighting coverage on the exterior and interior - focus on areas where marijuana is transported, processed and stored.

    • Create bios or resumes for owners and managers showing relevant experience and experience in the legal marijuana market

    • Create a community outreach and social equity plan. Create a plan to show how you will inform the community about your business, and give back to the community through involvement, employment opportunities or other positive impact activities.

  • Identify Suitable Real Estate. Identify real estate in a municipality that is likely to allow the adult use marijuana businesses. This is generally take more time than expected in that you will need to consider minimum requirements related to the premises site including:

    • Look for properties at least 1,500 feet from another cannabis business and 1,000 feet away from schools. There may be other minimum distance restrictions for other organizations such as churches or drug rehab facilities,

    • Avoid residential areas- residences are not generally allowed.

    • Ensure that the local municipality plans to allow adult use establishments.

    • Understand the local zoning requirements and fire safety requirements.

    • Obtain approval from the landlord to operate a marijuana establishment.

  • Develop a Scaled Site Plan: Create a site plan for your premises including all entrances, exits, windows, and outline all areas including patient waiting areas, sales area, and storage. Identify areas that contain video cameras and other alarms.

  • Organize Your Financial Information: Organize your tax, banking, and securities information for the past 3 years. Make the package easy for the regulators to review. The regulators will want to ensure that your money was made legally and all taxes have been paid.

  • Try to Establish a Banking Relationship. Banks are hesitant to provide services to marijuana businesses as they may be charged with money laundering; however, this is changing. Develop a relationship with a bank to understand what they will need to provide you with basic services. Understand that the bank will be required to file a suspicious activity report (SAR) to the federal government when you inform them that the account will be used for a legal marijuana business. You should not try to falsify information as this will make matters worse, and possibly prevent you from obtaining a banking relationship anywhere.


Illinois' Proposed Recreational Retail Marketplace: 6 Things You Really Should Know

Governor J.B. Pritzker announced the Illinois has reached a deal that will legalize marijuana sales by January 1, 2020. We expect the Illinois Legislature to move quickly and pass the legislation by June. Illinois will hold a public hearing on the bill next Wednesday.

Here are the things that you should know about the Illinois recreational marijuana dispensary marketplace.

  • Illinois provides licensing priority to medical marijuana license holders for 60 days after the effective date of the Act. Expect the market prices for these licenses to skyrocket as firms try to find license holders that will sell. License holders that are interested in selling should consider doing so as there will be no backlog, it will be easier to get approved, costs are lower, and market prices are higher.

  • Illinois will issue 75 Conditional Adult Use Dispensary Organization Licenses before May 1, 2020. The application will be available by October 1, 2019 with a deadline submission date of January 1, 2019. The Act provides for a minimum number of dispensaries in 17 regions within Illinois. Applicants must have $100,000 in guaranteed liquid assets or be a social equity applicant that applied for a grant from the state. If granted a license, an applicant has 6 months to find a storefront. The state regulator must inspect the storefront prior to the build out, which will subject the retailer to multiple inspections as city regulators will also inspect. The regulator may extend the storefront build out process if the applicant has difficulty obtaining real estate. The final registration fee is $60,000. The licenses expire on even-numbered years.

  • The Act permits publicly owned companies but requires all organizations to file an organizational chart and stock record with the Illinois regulator. Public companies must disclose individuals and entities that own more than 5% of the voting stock to the extent known and disclosed in SEC filings, and related owners if they own more than 10% of the voting stock. If an organization is controlled by another entity, the owners, managers and board members must be disclosed.

  • Businesses may only own 10 dispensing licenses directly or indirectly. The Act also appears to limit an organization to 10 contractual arrangements with dispensaries that provides payment in any form.

  • The State of Illinois may provide loans and grants to social equity applicants. We believe that the government should partner private capital with social equity applicants. The private sector can increase the chances of success with operational guidance, infrastructure, branded products and capital. Illinois must also ensure that local jurisdictions, especially in major cities, allocate licenses to the social equity applicants from the get-go rather than as an after thought.

  • The Department of Agriculture will share oversight of the industry with the Department of Financial and Professional Regulation, which will oversee the dispensaries. This split seems logical as the Department of Agriculture oversees the hemp program.

Overall, the legislation provides a democratized approach to allocating dispensary licenses and limits the industry’s access to capital. The legislation raises concerns about the viability of the industry given the lack of traditional financing and capital available to dispensary applicants, and the extended timeline for setting up operations. The State of Illinois should not be in the business of funding start-ups, and we are interested in seeing the end result.

Free Cannabis Legislative Tracker For 20 States: Access THC, Hemp And CBD Bills

Access our free legislative trackers for Arizona, California, Colorado, Connecticut, Florida, Illinois, Kentucky, Massachusetts, Maine, Michigan, Missouri, North Dakota, New Hampshire, New Jersey, New Mexico, New York, Oregon, Tennessee, Utah and Washington. Review and access the cannabis & hemp bills introduced by the State Legislatures in the 2019-2020 session. The trackers include a summary description of the legislation, status and link to the full legislative text. The legislative trackers will be updated on a weekly basis.

Free Cannabis Legislative Tracker For 20 States: Access THC, Hemp And CBD Bills

Access our free legislative trackers for Arizona, California, Colorado, Connecticut, Florida, Illinois, Kentucky, Massachusetts, Maine, Michigan, Missouri, North Dakota, New Hampshire, New Jersey, New Mexico, New York, Oregon, Tennessee, Utah and Washington. Review and access the cannabis & hemp bills introduced by the State Legislatures in the 2019-2020 session. The trackers include a summary description of the legislation, status and link to the full legislative text. The legislative trackers will be updated on a weekly basis.

Illinois Holds Public Hearing Today on Cannabis Legalization Equity Act

The Illinois House will hold a public hearing today on HB 0902 the Cannabis Legalization Equity Act. The bill is socially progressive as it provides high cannabis possession limits, requires 51% of the cultivation and retail store licenses to be granted to communities that have been disproportionately impacted by the drug trade, and requires the state to automatically expunge prior cannabis convictions. The devil will be in the details as to how the state regulators will implement these concepts so as to create the intended equitable results.

Below are seven (7) things that cannabis businesses should know about Illinois’ cannabis legalization equity bill.

  • The bill requires the state authorities to automatically expunge cannabis convictions from the records within six (6) months of the law’s effective date.

  • The bill allows the personal possession, growth an transport of 24 mature plants. This limit is four times the 6 plant limit allowed in most states, and more than the two pound limit in New York’s recreational marijuana legalization bill.

  • The Department of Agriculture and the Department of Financial and Professional Regulation must adopt implementing rules within six (6) months of the law’s effective date, and begin accepting and processing applications within a year. This time frame seems quite aggressive, and probably unrealistic.

  • The Department of Agriculture and the Department of Financial and Professional Regulation must issue 51% of the cultivation and retail store licenses to persons in neighborhoods that have been negatively impacted by the war on drugs. These Departments are also prohibited from denying licenses for persons who are located in these areas. We question whether the licenses should be awarded to persons who were negatively impacted by prior cannabis policies rather than placing 51% of the cultivation and retail licenses in these neighborhoods.

  • A 10% excise tax will be added to the sales price on the sale or transfer of cannabis. The excise tax proceeds will be distributed to the General Fund, Illinois’ retirement systems, and to train state police on drug recognition.

  • A 10% local tax is charged on the net income of cultivation facilities, retail stores and on-site consumption facilities. Other states are sharing percentages of the excise tax charged on the gross sales with local municipalities. The proposed local tax on net income is not as generous.

  • Local municipalities may opt-in and permit marijuana establishments. The bill prescribes a robust approval process for municipalities including timelines for decision making. There are no caps on the application and license renewal fees charged by the municipalities.

Free Cannabis Legislative Tracker For 20 States: Access THC, Hemp And CBD Bills

Access our free legislative trackers for Arizona, California, Colorado, Connecticut, Florida, Illinois, Kentucky, Massachusetts, Maine, Michigan, Missouri, North Dakota, New Hampshire, New Jersey, New Mexico, New York, Oregon, Tennessee, Utah and Washington. Review and access the cannabis & hemp bills introduced by the State Legislatures in the 2019-2020 session. The trackers include a summary description of the legislation, status and link to the full legislative text. The legislative trackers will be updated on a weekly basis.

Free Cannabis Legislative Tracker For 20 States: Access THC, Hemp And CBD Bills

Access our free legislative trackers for Arizona, California, Colorado, Connecticut, Florida, Illinois, Kentucky, Massachusetts, Maine, Michigan, Missouri, North Dakota, New Hampshire, New Jersey, New Mexico, New York, Oregon, Tennessee, Utah and Washington. Review and access the cannabis & hemp bills introduced by the State Legislatures in the 2019-2020 session. The trackers include a summary description of the legislation, status and link to the full legislative text. The legislative trackers will be updated on a weekly basis.

Free Cannabis Legislative Tracker For 20 States: Access 440 THC, Hemp And CBD Bills

Access our free legislative trackers for Arizona, California, Colorado, Connecticut, Florida, Illinois, Kentucky, Massachusetts, Maine, Michigan, Missouri, North Dakota, New Hampshire, New Jersey, New Mexico, New York, Oregon, Tennessee, Utah and Washington. Review and access the cannabis & hemp bills introduced by the State Legislatures in the 2019-2020 session. The trackers include a summary description of the legislation, status and link to the full legislative text. The legislative trackers will be updated on a weekly basis.

Cannabis Regulatory Meeting Tracker 02/26/2019: 32 Meetings Today in Alaska, California, Colorado, Connecticut, Illinois, Maine, Massachusetts, Michigan, Nevada, New Jersey, New York and Pennsylvania

There are thirty-two (32) meetings today in Alaska, California, Colorado, Connecticut, Illinois, Maine, Massachusetts, Michigan, Nevada, New Jersey, New York and Pennsylvania. Links to the meeting details and agendas are provided below.

Alaska: Anchorage Assembly: Special Land Use Permits: Retail Marijuana Sales & Cultivation Facility
California: Berkeley City Council Meeting: Proposed Location For Cannabis Retailer
California: Humboldt County Board Of Supervisors: Threatened Litigation Regarding Cannabis Permits
California: Los Angeles City Council: Amendments To Cannabis Regulations
California: City Of Lynwood: Variance To Reduce Required Distance Of Cannabis Facility
California: County Of Mendocino: Cannabis Temporary License Extensions
California: City Of Pleasant Hill: Cannabis Ordinance Amendment
California: City Of Sacramento: Law And Legislation Committee Meeting
California: Santa Rosa: City Council Meeting: Appeal Of Cannabis Policy Subcommittee Determinations
California: City Of Santa Rosa: Use Permit For Adult Use Cannabis Retail And Delivery Business
California: Yolo County Board Of Supervisors: Ordinance To Regulate Cannabis Businesses
Colorado: City Of Carbondale: Renewal Of Retail Marijuana Infused Product Manufacturing License
Colorado: Chaffee County Planning Commission: Medical / Retail Marijuana In The Industrial Zone
Colorado: Glenwood Springs Planning & Zoning Commission: Amendment To Marijuana Regulations
Colorado: City Of La Plata: New Retail Marijuana Cultivation Facility License
Connecticut: Medical Marijuana Commission: Additional Qualifying Conditions
Illinois Legislature: Criminal Committee Hearing: HB0049 CRIM ID-IMMEDIATE EXPUNGE
Maine: Augusta Planning Board: Workshop On Medical Marijuana Business Zoning
Maine: Town Of Richmond: Approval To Open And Medical Marijuana Store And Wellness Center
Massachusetts: Cannabis Advisory Board Meeting
Massachusetts: Carver Planning Board: Recreational Marijuana Establishment Regulations
Massachusetts: Falmouth Planning Board: Zoning Bylaw Relating To Marijuana Treatment Centers
Massachusetts: City Of Lenox: Zoning Bylaw To Allow And Regulate Marijuana Establishments
Massachusetts: City Of Marshfield: Variance For Recreational Cannabis Dispensary
Massachusetts: City Of Wayland: Amend Marijuana Establishment District
Michigan: Athens Township Planning Commission: Zoning Regulations For Marijuana
Michigan: Kimball Township Planning Commission: Ordinance To Repeal Medical Marihuana Ordinance & Prohibit Marihuana Establishments
Nevada: Las Vegas: Zoning Code To Allow Marijuana Dispensary Use In The Town Center
New Hampshire Legislature: Environment & Agriculture: HB459 Establishing An Industrial Hemp Pilot Program.
New Hampshire Legislature: Health, Human Services And Elderly Affairs: HB364 Permitting Qualifying Patients And Designated Caregivers To Cultivate Cannabis For Therapeutic Use.
New Jersey: New Brunswick: Township Marijuana Ordinance Forum
New York: Town Of Hempstead: Ordinance To Prohibit Recreational Marijuana
Pennsylvania: Beaver Borough: Medical Marijuana Ordinance