JB Pritzker, Illinois governor, announced Friday that the Illinois Department of Financial and Professional Regulation has granted 149 conditional state licences to adult-use marijuana retailers to three applicants who were selected from earlier in summer. All of the selected businesses qualify as social equity applicants under the state’s Cannabis Regulation and Tax Act, the 2019 bill that legalized recreational pot for adults statewide.

“Illinois is leading the way in addressing the War on Drugs as no state has before, and dispensary ownership that reflects our state’s diversity is a product of that commitment,” Pritzker said on Friday in a statement from the governor’s office. “These licenses represent a significant step toward accountability for the decades of injustice preceding cannabis legalization. Illinois will continue to deliver on the promises of putting equity at the forefront of this process.”

Retail Sales Began in Illinois Two Years Ago

Illinois’ Cannabis Regulation and Tax Act was the first adult-use cannabis legalization measure in the United States to be passed by a state legislature, rather than through a ballot initiative approved by voters. In 2020, adult-use marijuana sales began in existing medical dispensaries.

But licensing adult-use cannabis retailers has been marked by setbacks and legal challenges over the state’s system to license recreational cannabis businesses. Much of the controversy has centered on the state’s efforts to ensure that members of communities negatively impacted by prohibition and enforcement policies have a path to business ownership in the newly legal adult-use cannabis industry. The initial goal was to issue the first 75 licenses in May 2020. However, lawsuits and delays have caused many problems.

“Since 2019, we have worked diligently to ensure communities disproportionately harmed by cannabis prohibition and discriminatory law enforcement are included in the adult-use cannabis industry,” said Senate Majority Leader Kimberly A. Lightford. “With the release of 149 Conditional Adult Use Dispensing Organization Licenses, Illinois has become a frontrunner in cannabis minority ownership and will continue to drive social equity, social justice and inclusion into the marketplace.”

Among the conditional use licensees selected through the lottery process,  41% are majority Black-owned, 7% are majority white-owned, and 4% are majority Latino-owned, while 38% of awardees did not disclose the race of their owners. State officials noted that “Illinois has made and executed the greatest commitment of adult use cannabis tax revenue to community reinvestment, expunged the most criminal history records involving cannabis, and has the highest rate of minority ownership of any state reporting/collecting ownership demographic data in the country.”

Licensees have six months to receive final approval

Applicant have now 180 days to obtain a suitable business location. If conditional licensees fail to obtain a business location suitable within the time limit, they can file for an extension of 180 days to finish the process.

“The release of these licenses means a transformation of the retail side of Illinois’ cannabis industry, creating more opportunities for individuals from all backgrounds to reap the benefits of legalization as employees and ancillary service providers,” said Mario Treto, Jr., Secretary of the Illinois Department of Financial and Professional Regulation. “These licensees continue to lay the groundwork for a cannabis industry more diverse and equitable than any other in the country. Our team has done a tremendous job over the last two years. I look forward to being able to work with new companies. [sic] owners throughout the next stages of licensure.”

Most of those selected for conditional adult use retailer licenses may have difficulty obtaining capital in order to finance a site or get their operations up and running. The state also offers loans at low interest to licensed businesses through the Illinois Department of Commerce and Economic Opportunity’s Social Equity Cannabis Loan Program. 

The first round of social equity license applicants are expected to finalize loan agreements directly with DCEO’s participating lenders in the coming weeks, with the next phase of the loan program launching in the near future. You can find additional information online about the Social Equity cannabis loan program. DCEO also funds free licensing and post-licensing technical assistance through their partners at Oakton Community College, The Trep School, the Women’s Business Development Center, and the University of Illinois Chicago Law School. You can find additional information and access to these resources on the program’s website.

Akele Parnell is a conditional applicant and co-owner at Marigrow. She plans to open a dispensary near Chicago’s Lincoln Park. It has raised enough capital to be able to proceed to the next phase.

“We have our financing,” Parnell told Crain Chicago. “Now we have to go through rezoning.”

“It was quite the wait. It’s a relief now to have the license in hand,” Parnell added. “There’s a lot of work ahead.”