Illinois Governor JB Pritzker announced on Friday that the Illinois Department of Financial and Professional Regulation (IDFPR) has issued 149 conditional state licenses for adult-use cannabis retailers to applicants selected in three lotteries held earlier this 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. Sales of adult-use cannabis began at existing medical dispensaries in 2020.

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 first 75 licenses were originally slated to be awarded in May 2020, but lawsuits have delayed progress several times.

“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

Applicants now have 180 days to secure their business location and receive final approval for licensing from state regulators. If conditional licensees are unable to secure a suitable business location within that time, they are permitted to file for a 180-day extension to complete 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. I am extremely proud of our team for their work over the past two years and look forward to working with these new businesses [sic] owners throughout the next stages of licensure.”

Many of the business owners selected as conditional adult-use retailer licensees are likely to face challenges obtaining capital to secure a site and get their operation up and running. Through a separate program administered by the Illinois Department of Commerce and Economic Opportunity (DCEO), the state offers low-interest loans to qualified licensed companies through its 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. Additional information about the Social Equity Cannabis Loan Program is available online. 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. Additional information on these resources and how to access them can be found on the program website.

One of the selected conditional applicants, Akele Parnell, a co-owner of Marigrow, plans to open a dispensary in the Chicago neighborhood of Lincoln Park. The business has already raised the necessary capital and is ready to move on to the next step in the process.

“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.”

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