Illinois Cannabis Experts?

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Unless you’ve been living under Lower Wacker Drive, you’ve most likely heard that earlier this summer, Illinois Governor J.B. Pritzker signed HB 1438 “The Cannabis Regulation and Tax Act” into law (the “Act”). The Act allows for the recreational use of marijuana and describes the application requirements for cultivation centers and dispensaries to acquire licenses to grow, distribute, and sell cannabis. The Act will become effective January 1, 2020.

Article 15 of the Act empowers the Department of Financial and Professional Regulation to enforce and oversee the licensing of dispensaries. In order to operate a dispensary in Illinois, an applicant must first be awarded a conditional adult use license. The conditional adult use license application will be massive in both length and requirements.  It involves a laundry list of over 20 required items for individuals and businesses to break into the market who are not registered under the Compassionate Pilot Program Act (a law which allowed for certain medical uses of cannabis). Applicants will be awarded conditional adult use licenses pursuant to a point system with up to 250 available points based on the sufficiency and thoroughness of each application. Factors such as composition of the applicant’s ownership, location of each desired dispensary or farm and inclusion of employing minorities into the business will all carry weight in calculating an applicant’s total score.  

Article 20 of the Act governs conditional adult use cultivation center applications which are enforced and overseen by the Department of Agriculture. In the event the Department opens up the application to entities not already cultivation centers under the Compassionate Pilot Program Act, the electronic application will consist of over 20 application categories, many of which have multiple sub-categories. 

There will be a ton of additional factors that will weigh in on the likelihood of success of any given application. Potential applicants are already jockeying for position by trying to lock down leases on desirable (and participating) locations, hiring lawyer and connected lobbyists.  

While there are many in the legal industry and lobbying sector that are claiming to be experts on the law and application process in Illinois, we find such claims to be “premature” at best. The simple truth is that no one can really be an expert in a law that is this new. Couple that with the fact that application itself will not even be available to the public until October 1, 2019, we urge our clients to be weary of claims of extensive knowledge and expertise in connection with Illinois and cannabis.  

The Act is uncharted territory for Illinois businesses and lawyers alike. However, the procedural requirements for licensure in the cannabis industry will likely mirror the fundamental procedures which govern other areas of heavily regulated activities, e.g. liquor and gaming. Attorneys with strong footholds in hospitality will have a significant advantage in handling HB 1438 application procedures due to familiarity with state and local licensing procedures, zoning laws, and relevant ordinances. 

We will continue to keep you up to date with the progress and news related to cannabis in Illinois. Please reach out directly to us if you have questions, ideas or both!

Olivia ShanksComment