The much-awaited conditional social equity cannabis licenses have been issued a little over a year after they ought to have been. The state of Illinois will have 55 new retailers that are licensed to operate in the lucrative sphere of the recreational cannabis industry in the state.
The pandemic halted a lot of proceedings in different states around America.
In Illinois, the process of issuing licenses to cannabis dispensaries for social equity candidates had to be paused, as the government’s focus was fully directed to combating the pandemic and making sure the welfare of Illinois residents was fair.
Despite this pause, the Illinois Department of Financial and Professional Regulation released a report stating that cannabis sales have increased every month since the state approved the recreational sales of marijuana in January 2020.
The Cannabis Social Equity Program in Illinois
This program was established to be a part of the Credit Reducing Term Assurance ( CRTA ) agency. The objective of the program is to provide law-impacted and disadvantaged persons that have been negatively affected by the war on drugs with an opportunity to benefit from the multi-dollars cannabis industry. The majority of the individuals in this disadvantaged group happen to be from communities of color.
The social equity program provides various aids for individuals with approved applications.
These applicants are provided with access to financial resources, sponsored training programs at approved colleges to improve their chances of entering the cannabis industry. Other resources open to these applicants include additional points for licenses applicants, as well as opportunities to register for development programs serving other disadvantaged communities in Illinois.
The selection process for applicants includes a lottery session for high-scoring applicants. Each applicant’s form has to be assessed to determine the highest scoring individuals that would proceed to the lottery phase. The lottery session ensures that chosen finalists are diverse and that the selection process isn’t right to favor one community over another.
Multiple lawsuits were filed last year by successful, as well as unsuccessful applicants. The government promptly developed legislation to reform the selection process and ensure all doubts are cleared.
“Social equity and justice are the heart and soul of the adult-use cannabis program in Illinois”, said Toi Hutchinson, the senior advisor to Governor Pritzker.
The 2020/2021 Successful Applicants
The applicants that have just been awarded their licenses were picked out from over 500 outstanding applicants. All unique applicants had at least an 85% score on their applications. The lockdown due to the COVID-19 pandemic caused a delay in issuing the licenses.
To qualify for the lottery held, all applicants had to be well suited to be conferred with the social equity status. The factors that determine the social equity status of an applicant are either an eligible cannabis-related conviction or residency in a disadvantaged community; or both. Once an applicant meets this, he/she can pick a form and fill in the right details.
Awarding these licenses to social equity candidates allows the Illinois cannabis industry to be diverse. It is also a form of repayment to the disadvantaged communities while the government keeps on working to expunge more convictions. These licenses help the government invest more in disproportionately affected communities that are bearing the brunt of the failed war on drugs in the state.
The successful applicants upon receipt of their license are given six months to pick out a physical location for their dispensers. Not all applicants can secure their location within this allotted time, while some of these applicants may receive an extension, others may be forced to transfer their license to another region. This region will be chosen and specified by the Illinois Department of Financial and Professional Regulation (IDFPR).
If neither option is granted to an applicant, it means the conditional social equity license would automatically be rescinded and awarded to another applicant. This is per the rules of the cannabis regulation and tax act which was signed on June 25, 2019.
Applicants are likely to lose their licenses because…
Some of the applicants will have lost their investors due to the long delay before the licenses were finally awarded. The lawsuits also caused some of these would-be dispensary owners to lose the talents needed to launch and position the business the right way.
A few of these applicants will try to expropriate the licenses once they accept that they wouldn’t have much luck growing the dispensary successfully.
Due to these some licenses may be rescinded and are would be very likely to change hands in no time. There are regulations currently in place to deter the transfer of some licenses until late December.
Additional Licenses To Be Issued Out
The state is set to hold another lottery to select 75 additional applicants for conditional licenses. This lottery will be held on August 19.
According to reports, the applicants that have been selected for the lottery had tied scores with other applicants when the first lottery was carried out. The rules clearly state that no applicant or individual primary officer can be conferred with more than two conditional licenses in the lottery.
Any applicant having a principal officer or board member can be denied conditional licenses, especially when the person has a financial or voting interest of at least 5% and is irregular at paying amounts owed to the state of Illinois or in filing required tax return slips.
Mario Treto, Acting Secretary of the Illinois Department of Financial and Professional Regulation (IDFPR) said “The announcement of today’s lottery selections is a milestone on Illinois’s path as a national leader in the advancement of cannabis equity and I look forward to taking the next steps together for the future of the cannabis industry in Illinois.”
Experts predict that the adult-use marijuana market will grow significantly once all licenses are issued out and the dispensaries are finally open for business.
One can just imagine how many millions of dollars will be gained in revenue by then, as well as the generational wealth that can be built if the applicants stay on the right path.
Keep in mind that last month, the state recorded that $127.8 million worth of recreational cannabis was sold in legal dispensaries statewide.