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Here’s Illinois Recreational Marijuana Business Details

by Faith Fidura June 05, 2019

Update: Governor J.B. Pritzker signed the marijuana legalization bill into law on June 25, 2019, making Illinois the 11th state to legalize recreational marijuana. 

Illinois Will Have Recreational Marijuana Business Opportunities

IllinoisBlogOn May 31, 2019, Illinois legislators approved the long-awaited cannabis legalization legislation known as the Cannabis Regulation and Tax Act. The proposed legislation will allow the following:

  • Illinois residents ages 21 and over would be allowed to purchase and possess up to 30 grams of cannabis;
  • Non-residents ages 21 and over would be allowed to purchase and possess 15 grams of cannabis;
  • Illinois adults ages 21 and over would be allowed to grow up to five cannabis plants in each household;
  • Municipalities, employers and landlords would be able to prohibit possession and use;
  • Criminal records of citizens whose careers and futures have been harmed by cannabis convictions for low-level possession and dealing would be expunged. The sale of adult use cannabis will begin on January 1, 2020.


The bill still needs to be signed into law by Governor J.B. Pritzker, but we anticipate that to happen sooner rather than later, as marijuana legalization was one of his campaign promises and he worked with state lawmakers to help craft the legislation.

The new law will continue to limit the number of marijuana business licenses and endures preferential treatment towards equity applicants. The proposed application process will give additional points for diversity, diversity of ownership, diversity of workforce, and diversity of contractors hired.

The legalization of adult use cannabis does not alter the state’s medical cannabis pilot program. In fact, lawmakers also approved a bill on June 2, 2019 that would make the state’s medical marijuana program permanent as well as expand it. The measure, which still awaits Pritzker’s signature too, would add broader qualifying conditions such as chronic pain, autism and irritable bowel syndrome. 

Illinois Recreational Marijuana Business Licensing Details

The new law outlines that the Department of Agriculture will be responsible for the registration and oversight of cultivation centers, craft growers, processors, transporters, and their agents. Additionally, the Department of Financial and Professional Regulation will be responsible for the registration and oversight of dispensaries and their agents.

See below for the list of marijuana business license types that will work together to form the state’s recreational market: 

Early Approval Licenses (for Existing Medical Cannabis Businesses):

An Early Approval Adult Use Cultivation Center License is a license that permits a medical cannabis cultivation center licensed under the Compassionate Use of Medical Cannabis Pilot Program Act to begin cultivating, packaging, transporting, and selling cannabis to adult-use cannabis business establishments for resale to purchasers on January 1, 2020.

  • The application for an Early Approval Adult Use Cultivation Center License requires a $100,000 nonrefundable application fee and a nonrefundable Cannabis Business Development Fee equal to 5% of the cultivation center’s total sales between July 1, 2018 to July 1, 2019, or $500,000 (whichever is less), as well as the identification of a Social Equity Inclusion Plan.

An Early Approval Adult Use Dispensing Organization License is a license that permits a medical cannabis dispensing organization licensed under the Compassionate Use of Medical Cannabis Pilot Program to begin selling cannabis to purchasers on January 1, 2020.

  •  The application for an Early Approval Adult Use Dispensing Organization License requires a $30,000 nonrefundable application fee and a nonrefundable Cannabis Business Development Fee equal to 3% of the dispensing organization's total sales between July 1, 2018 to July 1, 2019, or $100,000 (whichever is less), as well as the identification of a Social Equity Inclusion Plan.

 

General Licenses (for all interested parties):

A Cultivation Center License is a license that permits a business or organization to cultivate, process, transport, and perform other necessary activities to provide cannabis and cannabis-infused products to cannabis business establishments.Screen Shot 2019-04-22 at 4.12.14 PM

  • The application for a Cultivation License requires a nonrefundable application fee of $30,000. Once awarded a license, an annual registration/renewal fee of $100,000 is required.

A Processing Organization License or Processor License is a license that permits a business or organization to process cannabis and perform other necessary activities to make cannabis available for sale at a dispensing organization or use at another processing organization. 

  • The application for a Processor License requires a nonrefundable application fee of $5,000. Once awarded a license, an annual registration/renewal fee of $20,000 is required.
  • The Department is to award up to 40 Processor Licenses by July 1, 2020 and 60 additional licenses by December 21, 2021.

A Conditional Adult Use Dispensing Organization License is a license awarded to top-scoring social equity applicants for an Adult Use Dispensing Organization License that reserves the right to a dispensing organization license if the applicant meets certain conditions, but does not entitle the recipient to begin purchasing or selling cannabis or cannabis-infused products.  

  • Applicants who receive a Conditional Dispensing Organization License will have 180 days from the date of the award to identify a physical location for the dispensing organization retail storefront when new entrants are allowed in the market.
  • The purpose of this conditional license is to reduce the costs associated with entering the industry. The application for a Conditional Dispensing Organization License requires a nonrefundable application fee of $5,000. Once awarded a license, an annual registration/renewal fee of $60,000 is required.
  • The Department is to award up to 75 Conditional Adult Use Dispensing Organization Licenses by May 1, 2020.

An Adult Use Dispensing Organization License or Dispensary License is a license that permits a business or organization to acquire cannabis from a cultivation center, craft grower, processing organization, or another dispensary for the purpose of selling or dispensing cannabis, cannabis-infused products, cannabis seeds, paraphernalia, or related supplies to purchasers or to qualified registered medical cannabis patients and caregivers.

  • The application for a Dispensary License requires a nonrefundable application fee of $30,000. Once awarded a license, an annual registration/renewal fee of $60,000 is required.
  • The Department is to award up to 110 additional Adult Use Dispensing Organization Licenses by December 21, 2021.

A Transporting Organization License or Transporter License is a license that permits a business or organization to transport cannabis on behalf of a cannabis business establishment.

  • The application for a Transporter License will require a nonrefundable application fee of $5,000. Once awarded a license, an annual registration/renewal fee of $10,000 is required.

A Craft Grower License is a license that permits a business or organization to cultivate, dry, cure, and package cannabis and perform other necessary activities to make cannabis available for sale at a dispensing organization or use at a processing organization.

  • A craft grower may contain up to 5,000 square feet of canopy space on its premises for cultivating plants that are more than 5 inches tall.
  • A craft grower may share premises with a processing organization or a dispensing organization, or both, provided each licensee stores currency and cannabis or cannabis-infused products in a separate secured vault to which the other licensee does not have access or all licensees sharing a vault share more than 50% of the same ownership.
  • The application for a Craft Grower License requires a nonrefundable application fee of $40,000. Once awarded a license, a license fee of $100,000 is required and an annual registration fee of $40,000 will be required to renew the license every year.
  • The Department is to award up to 40 Craft Grower Licenses by July 1, 2020 and 60 additional licenses by December 21, 2021.

 

Recreational Program Timeline:


Within 60 days of the effective date of the Act –
Existing medical cannabis businesses may apply for Early Approval Adult Use Cultivation Center Licenses or Early Approval Adult Use Dispensing Organization Licenses. Eligible applicants will be awarded a license within 45 days of applying.

January 1, 2020 – Adult use cannabis available for purchase

By May 1, 2020 – Department to award up to 75 Conditional Adult Use Dispensing Organization Licenses

By July 1, 2020 – Department to award up to 40 Craft Grower Licenses, up to 40 Processor Licenses, and a TBD number of Transporter Licenses

By December 21, 2021 – Department to award up to 60 additional Craft Grower Licenses, up to 60 additional Processor Licenses, and up to 110 additional Adult Use Dispensing Organization Licenses

 

Begin Preparing for Illinois Medical Marijuana Business Opportunities 

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  • An Application Guide & Checklist for a detailed summary and checklist of over 100 action items you'll need to complete before submitting your application
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