Illinois will delay awarding more than 80 marijuana licenses meant to expand the industry, following setbacks in the application process brought on by the coronavirus pandemic.
The state’s Department of Agriculture, which regulates marijuana grow facilities, was set to award 40 craft grow licenses, 40 infuser licenses and an undetermined amount of transporter licenses Wednesday.
Gov. J.B. Pritzker issued an executive order delaying the licenses. According to the order, dated Monday, the Department of Agriculture will notify the public when licenses will be issued.
The delays could be catastrophic for some applicants, particularly those who were paying to hold real estate for grow facilities. The setbacks also threaten efforts to diversify the largely white industry.
“We’re going to have to write another check to the landlords to hold the building,” said Jamil Taylor, who leased a South Side building for a grow facility through the end of July. “That definitely puts us in a tough spot … We have to shell out thousands and thousands of more dollars.”
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Under the law, grow license applicants had to secure property in advance. Taylor, who applied with a group for grow, transporter and dispensary licenses, said some groups won’t be able to afford an indefinite delay, and could lose their properties.
Social equity applicants are particularly at risk, Taylor said.
The state’s recreational marijuana law laid out specific social equity rules, meant to foster opportunities for entrepreneurs of color to break into the industry. Social equity applicants must either have a marijuana-related arrest on their record, live in an area disproportionately affected by the war on drugs or meet another qualification.
Taylor qualifies as a social equity applicant, as does Nakisha Hobbs, who applied with her business partners to open a grow facility and a dispensary.
Hobbs is paying $5,000 a month to hold a property in Schaumburg for the potential grow operation. She has it through Aug. 1, but with no real date for when the licenses will be issued, she’s not sure she wants to pay more for a building she doesn’t even know she’ll be able to use.
“We’ve already spent $25,000 to hold, so this would take us up to $30,000, $35,000, we don’t know where the number could potentially go if there’s no definitive date,” she said. “And it makes it very hard for us to go back and even negotiate.”
The recipients of the 40 craft grower licenses will be the first businesses allowed to grow marijuana in the state outside of the 21 cultivation facilities licensed through the state’s medical cannabis program.
When recreational sales started in Illinois Jan. 1, only existing operators were allowed to sell or grow marijuana. The new licenses will be the first chance for those not already in the industry to participate.
The transporter and infuser licenses will create categories of businesses that do not exist in Illinois’ marijuana industry. Recipients of the transporter licenses will take marijuana products from grow facilities to dispensaries. Infuser license winners can make marijuana-infused edibles, concentrates and other products. Currently, marijuana growers are responsible for both processes.
This spring, the state pushed back the application deadline for those licenses by 1\u00bd months because of the pandemic.
“The COVID-19 pandemic and the six-week deadline extension granted to applicants have caused unforeseeable delays in the application review process,” said Jerry Costello II, acting director of the state’s agriculture department. “The department is working tirelessly to ensure that applications are scored and awarded in a fair, deliberate and equitable manner.”
Already, the state delayed awarding 75 dispensary licenses because of the pandemic. Those were set to be awarded May 1, but the Illinois Department of Financial and Professional Regulation, which regulates dispensaries, had not yet awarded them, or said when it will do so.
Hobbs said she hopes the state offers to help social equity applicants who are in a financial bind.
“If the goal is really to level the playing field, and the state is causing this additional delay, I feel like there should be some type of safety net that the state is willing to put in place for people that are going to be financially harmed by this delay,” she said.
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