How to Win an Illinois Cannabis Business License | Illinois Cannabis Business Consultants
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Illinois Cannabis Business Consultants
The adult-use marijuana market in Illinois is thriving. Many cannabis entrepreneurs are currently operating thriving cannabis businesses, and there are more opportunities to come for those who want in on the Illinois cannabis industry.
On July 15, 2021, the Illinois Department of Agriculture awarded licenses to top-scoring craft grower, infuser, and transporter applicants. We’re happy to report that we were 100% successful in helping our clients win craft grower and infuser licenses.
Additionally, our cannabis consultants in Illinois are excited to announce that the Department will issue 60 additional Craft Grow licenses and 60 Infuser licenses by December 21, 2021. Our cannabis consulting firm predicts that the department will begin to accept licenses as early as August 2021.
With that being said, if you’re an entrepreneur or investor seeking to obtain a cannabis business license in Illinois, you’re in the right place. In this article, our Illinois cannabis consultants breakdown the Illinois cannabis market, license application process, regulations, and best practices for winning a license.
Illinois Cannabis News From Most Recent Licensing Round
As mentioned above, Illinois recently granted licenses to the top applicants for cannabis craft grower establishments, cannabis infuser establishments, and transporter establishments. For the applicants that did not receive a license, the department will consider your application for the next cannabis licensing round.
On the other hand, adult-use dispensary licenses in Illinois are still delayed. However, Illinois will issue 185 adult-use dispensing organization licenses in three lottery rounds by August 19, 2021.
First, you are considered a qualifying applicant if you submitted an application that received at least 85 percent of 250 application points under Section 15-30. Additionally, your application must meet the definition of “Social Equity Applicant.”
Also, you may be considered a “Qualifying Social Equity Justice-Involved Applicant.” In order to qualify as this, you must have received at least 85 percent of 250 application points under Section 15-30. Lastly, your application must meet the criteria of either Paragraph 1 or 2 of the definition of Social Equity Applicant.”
Below is a timeline of the upcoming cannabis license lottery in Illinois:
For the Qualifying Applicant Lottery and the Social Equity Justice-Involved Lottery, Illinois will reward licenses to the following regions in the following amounts:
- Bloomington (1)
- Cape Girardeau (1)
- Carbondale-Marion (1)
- Champaign-Urbana (1)
- Chicago-Naperville-Elgin (36)
- Danville (1)
- Davenport-Moline-Rock Island (1)
- Decatur (1)
- Kankakee (1)
- Peoria (2)
- Rockford (1)
- St. Louis (3)
- Springfield (3)
- Northwest Illinois nonmetropolitan (1)
- West Central Illinois nonmetropolitan (1)
- East Central Illinois nonmetropolitan (1)
- South Illinois nonmetropolitan (1)
No Qualifying Applicant or Qualifying Social Equity Applicant can be awarded more than 2 Conditional Adult-Use Dispensing Organizations at the conclusion of the lottery.
If you have any additional questions about the upcoming lottery, contact our cannabis business consultants in Illinois.
Overview of Marijuana Market in Illinois
Medical and adult-use sales in Illinois exceeded $1 billion in 2020. Over 152,000 people in Illinois are registered as medical marijuana patients. There are currently 96 licensed adult-use dispensaries and 21 licensed cultivators in Illinois.
The graphic below displays adult-use cannabis sales in Illinois from 2021 to the present.
Rules and Regulations for Illinois Cannabis Business Licenses
Outline of Important Sections of the Illinois Cannabis Business Bill
- Social Equity Justice-Involved Lottery | Section 115.5
- Requirements, Prohibitions, Penalties | Section 130
- Adult-Use Dispensaries | Section 15-15
- Craft Grower Licenses | Section 30-5
- Illinois Infuser Licenses | Section 35-5
- Transporter Licenses in Illinois | Section 40-25
- Cannabis Packaging and Labeling | Section 55-21
- Restricted Cannabis Zones | Section 55-28
Timeline for Cannabis Business License Applications
When Does the Application for Illinois Cannabis Business Licenses Open?
The application for Craft Grow and Infuser licenses will open as early as August 2021.
As for Illinois Dispensary business licenses, the department plans to issue at least 50 adult-use dispensing licenses before December 21, 2022.
When Can I Start my Cannabis Business in Illinois?
Now is the time to apply for a cannabis business license in Illinois. As mentioned above, Illinois is about to grant an additional 60 Graft Grow Licenses and 60 Infuser Licenses. Talk to our Illinois cannabis consultants for a head start on your application. Our cannabis application writers are experts within the Illinois cannabis industry.
Application Process and License Awarding
Are Illinois Cannabis Business Applications Merit-Based or Lottery-Based?
Illinois cannabis business applications are scored based on a point system. If applications tie, the state conducts a lottery to determine who wins a license.
How are Cannabis Applications in Illinois Scored?
When you submit a cannabis application in Illinois, you receive application points. For instance, Application points are the number of points a Dispensary Applicant receives on an application for a Conditional Adult-Use Dispensing Organization License.
An Eligible Tied Applicant is a Tied Applicant that is eligible to participate in the process by which a remaining available license is distributed by lottery.
Contact our cannabis business consultants in Illinois to score high on your application for a cannabis establishment in Illinois.
How Many Cannabis Business Licenses Can I Win in Illinois? | Illinois Cannabis Business Consultants
For Craft Grower licenses, a person or entity can only hold one license. Additionally, no license may be issued to a person or entity who is licensed by any licensing authority as a cultivation center, or to any person or entity having more than 10 percent interests in a persons licensed in Illinois licensed as a cultivation center.
For Infuser Licenses, no infuser license can be issued to a person licensed by any licensing authority as an infuser. Additionally, no infuser license can be issued to any person or entity that has more than 10 percent interest in a person licensed in the State as an infuser.
A single person or entity can not have a direct or indirect financial interest in more than 10 Conditional Adult-Use Dispensing Organization Licenses or Adult-Use Dispensing Organization Licenses.
Social Equity for Illinois Cannabis Businesses
How Do I Qualify for Social Equity in Illinois?
A social equity applicant is an applicant that meets the following requirements:
- First, an applicant with at least 51 percent ownership and control by one or more individuals who have resided for at least 5 of the preceding 10 years in a Disproportionately Impacted Area
- Secondly, an applicant with at least 51 percent ownership and control by one or more persons who: have been arrested for or convicted of any expungable offense or is a member of an impacted family
- Thirdly, for applicants with a minimum of 10 full-time employees, an applicant with at least 51 percent of current employees who: currently reside in a Disproportionately Impacted Area; or have been arrested or convicted of any expugnable offense.
Additionally, to find out if you are eligible for participation in the Illinois Adult-Use Social Equity Program, take a look at this map.
Contact our Illinois cannabis business consultants for more information about social equity applicants.
Map of Disproportionately Impacted Areas
A Disproportionately Impacted Area is a census tract or comparable geographic area that satisfies the following requirements by the Department of Commerce and Economic Opportunity:
- The area has a poverty rate of at least 20 percent
- 75 percent or more of the children in the area participate in the federal free lunch program
- At least 20 percent of the households in the area receive assistance under the Supplemental Nutrition Assistance Program
- The area has an average unemployment rate that is more than 120 percent of the national unemployment average
- Lastly, the area has high rates of arrest conviction and incarceration related to the sale, possession, use, cultivation manufacture, or transport of cannabis
You must meet at least one of the above criteria to qualify as social equity.
Types of Cannabis Business Licenses Available in Illinois
Adult-Use Cultivation Center License in Illinois
The Department of Agriculture issues this license type, and it permits a person to act as a cultivation center
Conditional Adult-Use Cultivation Center License
This license is awarded to top-scoring applicants for an Adult Use Cultivation Center License that reserves the right to an Adult Use Cultivation Center License if the applicant meets certain conditions made by the Department of Agriculture. However, this does not entitle the license holder to begin growing, processing, or selling cannabis-infused products.
Adult-Use Dispensing Organization License in Illinois
The Department of Financial and Professional Regulation issues this license type. It permits the person or entity to act as a dispensing agency.
Conditional Adult-Use Dispensing Organization License
A Conditional Adult-Use Dispensing Organization License is a contingent license awarded to applicants for an Adult Use Dispensing Organization License that reserves the right to the license if the applicant meets certain conditions. However, this license does not entitle the licensee to begin purchasing or selling cannabis or cannabis-infused products.
Number of Illinois Cannabis Dispensary Licenses Available Per Region
For a map of the amount of available Illinois cannabis dispensary licenses for the next licensing round, click here.
Applying for a Conditional Adult-Use Dispensing Organization License
An applicant for Conditional Adult-Use Dispensing Organization License in Illinois must:
- First, pay a nonrefundable application fee of $5,000 for each license for which the applicant is applying
- Secondly, have a certification that the applicant will comply with the requirements contained within the Act
- Thirdly, state the legal name of the proposed dispensing organization
- Lastly, provide a statement that the dispensing organization agrees to respond to the Department's supplemental requests for information
Principal Officers
As for principal officers, you must include a statement indicating whether that person:
- First, has previously held or currently holds an ownership interest in a cannabis business establishment in Illinois
- Secondly, has held an ownership interest in a dispensing organization registration or license suspended, revoked, placed on probationary status
Additionally, you must include:
- Firstly, disclosure of whether any principal officer has ever filed for bankruptcy or defaulted on spousal support or child support obligation
- Secondly, a resume for each principal officer, including whether that person has an academic degree, certification, or relevant experience with a cannabis business establishment or in a related industry. So, if you do not have experience within the cannabis business industry, you can still win a license.
- Thirdly, s description of the training and education that will be provided to dispensing organization agents
Business Plan
Additionally, you need to provide a proposed business plan that includes:
- A description of services
- A description of the process of dispensing cannabis
Security Plan
You also need to include a copy of the proposed security plan that includes:
- First, the process, or controls that monitor the dispensary, secure the premises, agents, and currency.
- Second, the process to ensure access to the restricted access area is restricted to registered agents, Department inspectors, and security personnel
Additionally, you must include an inventory control plan and a proposed floor plan.
If you want to open a marijuana dispensary in Illinois, talk to our cannabis business consultants in Illinois.
Cannabis Testing Facility License in Illinois
A cannabis testing facility in Illinois is registered by the Department of Agriculture to test cannabis for potency and contaminants.
Craft Grower License in Illinois
A Craft Grower is a facility operated by an organization or business that I licensed by the Department of Agriculture to cultivate, dry, cure, and package cannabis and perform other activities to make cannabis ready for sale at a dispensing organization.
Put differently, a cannabis craft grower license in Illinois allows you to Cultivate, Process, and Infuse cannabis.
Canopy Space for Craft Grower Establishments
A Craft Grower in Illinois can have up to 5,000 square feet of canopy space on its premises for plants in the flowering space. The Department of Agriculture authorizes increases or decreases of canopy space in increments of 3,000 square feet. This is based on market need, craft grower capacity, and the licensee's history of compliance. The maximum space is 14,000 square feet.
Additionally, a craft grower is able to share space with a processing organization or dispensing organization, or both. However, each licensee must store currency and cannabis or cannabis-infused products in a separately secured vault.
Lastly, by December 2021, the state will issue 60 Craft Grow licenses. No person or entity shall hold more than 2 Illinois Craft Grow Licenses. You also can not sell that license until after December 2021.
Illinois Craft Grower Application Resources
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- Department of Agriculture Site | Here
- Cannabis Regulation and Tax Act (410 ILCS 705) | Here
- Program Regulations | Here (Craft Grower Rules start on Page 790)
- Sections | Here
- Current Early Craft Grower License Holders | Here
- Social Equity Program Overview and Interactive Map | Here
- IDFPR Questions and Answers – R1 | Here
- IDFPR Questions and Answers – R2 | Here
- Sample Table of Organization, Ownership, and Control | Here
If you have any additional questions about the next round for Craft Grow licenses, make sure to contact our cannabis business consultants in Illinois.
Cannabis Processor License in Illinois
A Processing Organization in Illinois is a facility operated by an organization of business that is licensed by the Department of Agriculture to either extract chemicals or compounds to make cannabis concentrate or incorporate cannabis or cannabis concentrate into a product formulation to produce a cannabis product.
Transporting License in Illinois
The Department of Agriculture issues this license type. It allows the person or entity to transport cannabis or cannabis-infused products on behalf of a cannabis business establishment.
If you want to learn more about this license type, check out our article about Cannabis Transporter Licenses in Illinois.
Cannabis Infuser License in Illinois
An Infuser Organization is a facility operated by an organization or business that is licensed by the Department of Agriculture to directly incorporate cannabis or cannabis concentrate into a product formulation in order to produce a cannabis-infused product.
Remember, Illinois is awarding an additional 60 Cannabis Infuser licenses soon. Make sure to work with our cannabis business consultants in Illinois so that you can win a license.
Application and Licensing Fees
Each cannabis business establishment in Illinois has different application and licensing fees.
For an Illinois Craft Grow Establishment, the application fee is $5,000. For social equity applicants, the application fee is $2,500.
Secondly, for a Cultivation License, the application fee is $30,000, and the licensing and renewal fee is $100,000.
Thirdly, the application fees for an Infuse license in Illinois are the same as those for a Craft Grow license. The licensing and renewal fee is $20,000.
Fourthly, the application fee for a Conditional Dispensing Organization is $5000. The licensing and renewal fee is $60,000. However, for an Adult Use Dispensing Organization License, the application fee is $30,000 and the licensing and renewal fee is $60,000.
Lastly, for Transporter Licenses, the application fee is $5,000, or $2,500 if you qualify as a social equity applicant. The licensing and renewal fee is $10,000.
Illinois Ownership Limitations
What is the Maximum Number of Licenses an Entity Can Own?
A single person or entity can not have a direct or indirect financial interest in more than 10 Conditional Adult-Use Dispensing Organization Licenses or Adult-Use Dispensing Organization Licenses.
Also, you are limited to one craft grow license and one infuser license.
Selling and Buying licenses (transferring ownership)
Transfer of dispensary licenses
You can only sell your dispensary license upon approval for the final license. Currently, everyone was awarded conditional licenses. Current holders of conditional licenses must obtain a site, have the department inspect it, and pay the registration fee ($30,000 - $60,000) within 180 days to obtain a final dispensary license.
Afterward, final dispensary license holders can apply to the department to sell their licenses.
Transfer of license awarded to Social Equity Applicant.
In the event a Social Equity Applicant seeks to transfer, sell, or grant a cannabis business establishment license within 5 years after it was issued to a person or entity that does not qualify as a Social Equity Applicant, the transfer agreement shall require the new license holder to pay the Cannabis Business Development Fund an amount equal to:
- Any fees that were waived by any State agency based on the applicant's status as a Social Equity Applicant, if applicable;
- Any outstanding amount owed by the Qualified
Social Equity Applicant for a loan through the Cannabis Business Development Fund, if applicable; and - The full amount of any grants that the Qualified Social Equity Applicant received from the Department of Commerce and Economic Opportunity, if applicable.
Local Municipality Opt-Out
Legal voters in Illinois are able to petition the allowance of local cannabis establishments within their municipalities. They can petition home cultivation, one or more types of cannabis business establishments, home cultivation, and one or more types of cannabis business establishments.
The legal voter must then go through a process in order for the request to receive approval. After that, these areas become restricted cannabis zones for 4 years.
Expungable Cannabis Crimes in Illinois
J.B Pritzker has cleared over 500,000 marijuana arrests since Illinois legalized an adult-use marijuana market. Individuals in Illinois are eligible for either automatic expungement or need to file a court petition to start the expungement process.
You receive automatic expungement if:
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- Possessions under 30 grams or less
- Sale of marijuana up to 10 grams
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You need to file a court petition if:
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- Minor marijuana offenses that relate to a violent or sexual crime
- Delivery on school grounds, trafficking, or possession of marijuana plants.
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Possession Limits and Personal Cultivation
Adults age 21 and older are able to purchase and possess marijuana in Illinois. With that, you can not have more than 30 grams of cannabis flower, 500 milligrams of THC, or 5 grams of cannabis concentrate if you are a resident in Illinois.
An adult over the age of 21 is able to cultivate up to 5 marijuana plants.
Illinois Cannabis Tax Rates
State Sales Tax in Illinois
The state sales tax for cannabis in Illinois is 6.25 percent.
Cannabis Excise Tax in Illinois
As for excise tax, there is a 7 percent excise tax on the first wholesale sale. Additional excise taxes are applicable to different forms of marijuana products. For example, cannabis with a THC level at or below 35 percent has an additional 10 percent excise tax. Additionally, all cannabis-infused products have an additional 20 percent excise tax. Lastly, for cannabis with a THC level of 35 percent or higher, there is an additional 25 percent excise tax.
Useful Resources from Our Illinois Cannabis Business Consultants
Below are some useful resources that our Illinois Cannabis License Consultants recommend for you:
Conclusion
If you want a cannabis business in Illinois, now is the time to apply for a cannabis business license. The state plans to award many licenses within the next year. Work with our expert cannabis consultants to guarantee a high score on your application. Lastly, we have the highest success rate in the industry and already helped business entrepreneurs win plenty of licenses in Illinois.
