Illinois: the Midwest Mecca for Marijuana [Infographic]

Updated: May 26, 2019

With medical cannabis consumption rising up to 80% in Illinois, lawmakers are beginning to see a green light at the end of the fiscal tunnel. Ten states have legalized recreational cannabis thus far but Illinois will be the first state in the Midwest- making it a mecca for the upcoming cannabis market. Recreational cannabis sales alone are projected to generate between $350 to $750 million annually and with new Governor-elect J.B. Pritzker behind the bud, the light is only getting brighter.

The establishment of this epicenter is likely to cause a domino effect across other states. Legalization passed through the legislature, along with Michigan voters doing the same this November, could lead to other states in the region—for example, Wisconsin, Ohio, and Minnesota—adopting their own legalization laws in the years to come. However, with federal law still intact, the cannabis market will continue to vary from state to state.

Since 2013, the state of Illinois has taken vigilant steps in establishing a pilot program and maintaining it. The state has ensured that the medical cannabis program will be in effect until at least July 1, 2020. Industry leaders, however, sense a change in the wind after November’s elections.

Legislation presented in Illinois—House Bill 2353 and Senate Bill 316 — would allow adults 21 and over to grow, possess, sell, and consume limited amounts of recreational cannabis. Between the state’s demographic advantage (being the center of a new frontier for Canna-business) and Governor Pritzker’s goal to “legalize immediately”, Illinois will soon become a beacon for cannabis culture. The already packed West coast cannabis industry will be forced to expand— only this time, due East.

Then & Now: A Progressive Outline

of Illinois' Cannabis Legislation

August 2013

Illinois' Medical Cannabis Pilot Program launches. Then-Governor Pat Quinn signs the Illinois' Compassionate Use of Medical Cannabis Pilot Program Act which allows patients with qualifying debilitating conditions to register with the Illinois Department of Public Health (with a physician’s permission) to legally obtain medical marijuana. Regulations followed in July 2014.

The rules authorize up to 60 dispensaries, and require 60 permits—if there are sufficient qualified and geographically dispersed applicants. Similarly, the rules permit up to 22 cultivation center registrations, and not less than 22 if there are sufficient qualified applicants.

November 2015

After reviewing 214 medical cannabis dispensary applications, the state selects 56 applicants to advance to the registration stage and opens eight dispensaries. The Illinois Department of Agriculture authorizes cultivation centers to begin operating in 17 of the 22 districts.

January 2016

Illinois once again rejects an expansion of qualifying conditions despite a recommendation by the state’s own Medical Cannabis Advisory Board to add eight new, including several pain-related conditions.

April 2016

Illinois approves applications for 5,600 qualifying patients. These patient counts are very low, potentially in part because Illinois does not include chronic pain as a qualifying condition. Chronic pain is by far the most common qualifying condition for medical cannabis in other states.

March 2017

Rep. Kelly Cassidy proposes House Bill 2353 and Sen. Heather Steans pushes for Senate Bill 316. Legislators introduce a proposed bill that would establish an adult-use infrastructure which would allow adults 21 and older to possess, cultivate, sell, purchase and consume limited amounts of cannabis.

March 2018

Voters in Cook County, home to the states largest pool of cannabis patients (7,492) and Chicago– vote in favor of a ballot initiative supporting legalization of recreational marijuana at the state level. Though the referendum was nonbinding, it does go a long way to demonstrate favorable public opinion of such an initiative.

August 2018

Illinois launches the Opioid Alternative Pilot Program which allows medical cannabis as an opiate-alternative. The state eliminates criminal background checks and fingerprinting requirements as part of the medical cannabis card application for qualifying patients – essentially, making it easier and faster for patients to apply and obtain a medical cannabis card.

October 2018

Retail sales of medical cannabis in October alone reach $12,596,725.47 ($6,095,868.59 in dry flower sales and $6,500,856.88 in concentrates/infused products) Licensed medical cannabis dispensaries serve 27,760 unique patients, who procure 553,171 grams of dry cannabis.

November 2018

The Illinois Department of Public Health (IDPH) approves applications for 48,240 qualifying patients (including 347 persons under 18 years of age), since it began accepting applications for the Medical Cannabis Registry Program on September 2, 2014.

A Budding Future for Canna-Business in Illinois

If legislation is passed, Illinois' canna-businesses will be licensed and regulated by the state to cultivate, process, and sell recreational cannabis. Current medical marijuana facilities will be permitted a trial period of one year to test recreational sales before any new licenses are allotted.

The current medical cannabis program allows no more than 60 retail licenses and 19 cultivation licenses. At this time, the state is not accepting applications for additional cultivation or dispensary facilities. The current program allows for the following business licenses: Medical Marijuana Dispensary and Medical Marijuana Cultivation.

When recreational cannabis passes, the following licenses will be available: cultivation, production, testing, retail, and on-site consumption.

Types of Cannabis Business Licenses

Dispensary Application Requirements and Fees

Non-refundable application fee for a dispensary permit: $5,000 Once issued a permit, $30,000 permit fee for the first year Annual permit renewal: $100,000

Applicants were required to demonstrate $400,000 in liquid assets and $50,000 in escrow

Cultivation Application Requirements and Fees

Non-refundable application fee for a cultivation permit: $25,000 Once issued a permit, $200,000 permit fee for the first year Annual permit renewal: $100,000 Applicants were required to demonstrate $500,000 in liquid assets and a $2,000,000 bond to the Department of Agriculture

The general public (also counting out-of-state visitors) will be allowed to purchase up to 28 grams (roughly one ounce) of cannabis and to grow five plants. However, transporting any products over state lines is still prohibited. Taxes will follow at a rate of $50 per ounce wholesale, plus the state's standard 6.25 percent sales tax.

While the majority of registered medical patients reside in Cook County and leading districts include 24, 27, and 29—if legalization takes place, the amount of physicians and consumers (medical or not) are likely to skyrocket. As of now, there are more than 3,000 registered and Illinois licensed physicians. IDPH approved over 4,000 designated caregivers between 2017 and 2018 alone. In four years, the number of registered qualifying patients has increased by about 1400%. (2,663 in 2015 to 39,808 in 2018)

Start your Cannabis

Business Today

With Michigan legalizing recreational cannabis in the November election and Illinois on the cusp, it’s evident the canna-bus is leaving the station and taking off fast in the Midwest. Why wouldn’t you, as a prospective marijuana business owner, want a seat?

The potential for expansion is there— expressed in recent legislation, annual reports, as well as politicians stepping out in favor of cannabis reform— it’s no wonder cannabis conglomerates are heading east.

Illinois will become one of the country’s most valuable cannabis commerces with such a limited selection of facilities for a population of 13 million. While some states, such as Massachusetts, encourage mom and pop “pot” shops, cannabis licensing in Illinois will be fiercely competitive with merit-based applications.

If you're looking to break into the Illinois cannabis industry, developing your business plan, being well capitalized and getting guidance from industry experts is your ticket to securing a seat on the canna-bus. Entrepreneurs and organizations that act now will be best positioned to carve out a slice of the budding cannabis market. At The J. Whitney Group, we are experienced cannabis consultants providing business solutions to meet all your needs - from launch to exit. Contact us today to request a free consultation.

© 2019 by The J. Whitney Group.

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Cannabis Business Consulting
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