ILLINOIS STARTS 2020 ON A HIGH NOTE
To kick off 2020, we thought it would make sense to provide an update on what’s been going on in Illinois over the last few weeks (there’s been a lot) and is continuing to keep us extremely busy.
Recreational Sales Are Live: On New Year’s Day, thousands lined up for a chance to buy marijuana legally for the first time. The day consisted of long lines, a few setbacks, but most importantly, happy customers. On the first day alone, dispensaries sold more than $3 million worth of product according to a press release from the Illinois Department of Financial and Professional Regulation (IDFPR). While sales (and supply) dipped each of the next four days, sales for each day stayed above $1 million, and the total for the first five days was $10,830,667.91.
Conditional Adult Use Applications: Illinoisans were also lined up on January 2, but this time it was to submit timely applications for the next round of recreational dispensary licenses. The IDFPR announced its preliminary count: more than 700 applicants submitted applications seeking nearly 4,000 licenses, with more than 600 of those applicants identifying themselves as social equity applicants. The IDFPR will issue up to 75 new dispensaries licenses on or before May 1, 2020.
Supply Shortage and New Department of Agriculture License Applications: As expected, Illinois dispensaries are having a tough time keeping up with consumer demand. For example, six dispensaries in Chicago were closed on Monday, January 6, reportedly due to supply shortages. Many of the 21 current cultivation facilities are expanding capacity, but it will take time before those efforts result in an increased supply of cannabis.
Further, the state has no immediate plans to license any new large-scale cultivation centers. It does, however, plan to issue up to 40 licenses to smaller “craft growers” by July 1. To that end, the Illinois Department of Agriculture released the application for a craft grower license, along with the applications for infuser and transporter licenses. The deadline to submit all three of the applications is March 16, 2020. We are already beginning to work on those applications.
Pardons: On New Year’s Eve, Governor J.B. Pritzker issued more than 11,000 pardons for past low-level marijuana convictions. This action reinforces that the governor’s administration is making social equity a priority. “This is justice,” said Lt. Gov. Juliana Stratton. “And this is what equity is all about, righting wrongs and leveling the playing field.”
Robbery: A dispensary in Chicago’s Logan Square neighborhood was burglarized on January 6. The burglars broke into the dispensary before it opened and stole only cash. This unfortunate incident underscores two important and related issues the cannabis industry is wrestling with: banking and security. Because marijuana is illegal federally, most business operating in the cannabis industry do not have access to traditional banking products and must therefore deal in cash only. With significant cash on hand, cannabis businesses are prime targets for criminals, which in turn necessitates extensive security measures. Federal banking reform, such as the SAFE Banking Act (which we wrote about most recently here), would help resolve both issues.
Stay tuned to our blog for more developments on Illinois’s rollout of its recreational marijuana program, as well as other issues affecting the industry.