BELLEVILLE — They came to learn how to apply for a license to grow and sell marijuana in Illinois.
During a recent convention at the Gateway Center in Collinsville, people crowded into a room, eager to learn more about the new “green rush.” Extra chairs were brought in, and some people stood along the walls.
Joseph Wright, who served as director of the medical marijuana program under former Gov. Bruce Rauner, said he expects the application process to obtain dispensary and cultivation licenses under Illinois’ new recreational era to be very competitive.
“It will be much harder than you think it is,” he said.
Wright said there is a lot of interest in starting a marijuana-related business as recreational consumption in Illinois becomes legal on Jan. 1.
“There’s a little bit of a prospecting kind of view of how this works. It’s really important you get this license, because without this license you don’t operate, you don’t know when it’s going to come back again. They’re limited, they’re competitive,” Wright said. “You want to stake that claim, get that license, and hopefully make something happen out of it after that.”
During Wright’s session, about 60 people were in the room at one point. If all of them applied, he estimated only five people would get licenses.
Wright warned that completing the license applications could be laborious as they will be very detailed. They will ask for business plans, who will be involved and what their expertise is, how records will be kept and how employees will be trained.
There currently are 55 medical marijuana dispensaries in the state. They would have the first crack at getting a second license to open another dispensary. Then, there will be 75 more dispensary licenses awarded before May 2020 and another 110 more licenses after Jan. 1, 2021, for a total of nearly 300 licenses.
Applying for a license will cost $5,000, according to the legislation that was approved by the Legislature and signed by Gov. J.B. Pritzker.
“It’s hard, it’s very difficult and it’s only getting harder as time goes on. But because the way the system is being set up and them being competitive, that’s just how it goes,” Wright said. “Until there is a licensing system that is noncompetitive and just requirement-based, it’s tough to get in.”
Wright said it could be initially difficult for smaller operations, because as the industry has grown in the country, there are more and more multistate operators.
“They’ve been successful in the past, are able to repeat that moving forward, and get better and better and have more resources, and are more and more funded. So you see this concentration of repeat players, over and over again. I think you’ll see that again here, too,” Wright said.
“One thing that is good about Illinois, it has an aggressive social equity program. Hopefully you’ll see some other people who haven’t shown up in other states, local home-grown companies, that are able to get an extra boost because of that and get established here.”
The growing side of the business
Travis Smith and Dustin Hotle, of Belleville, and Jesse Counsell, of St. Louis, are looking to open a “craft-growing” business that would be a smaller cultivation center allowed under the recreational marijuana law. They hope to be awarded one of the 100 craft grow licenses in the state authorized by the legislation and open a facility in St. Clair County.
“We’re trying to start at the bottom because we know we’re not rich,” said Smith, 30, who is working toward a horticulture certificate at Southwestern Illinois College.
Counsell, 34, admits to using marijuana for years, and has a previous record as a 17-year-old for possession. It’s a record that qualifies for expungement under the new law.
“It’s something I feel we can do that will allow us to create opportunities, not just for ourselves, but for friends, but actually do something more than just a day-to-day job that is wearing and tearing on your soul,” Counsell said.
The trio thinks because Smith is mixed race and Counsell’s probable expungement, they could earn a few extra points in their license application.
One goal is for craft growing businesses to be veteran-owned with goals toward social equity, and hiring people from economically poor areas.
“I think one day there will be nationally recognized brands, that will be (like) DuPont, Walmart, Amazon of this industry, and I feel this is a prime time to move forward,” said Hotle, 33.
Eric Porter, of Hampton, Illinois, near the Quad Cities, came to the convention because he is working toward applying for a dispensary license.
“It’s a good opportunity. I’ve seen a lot of the benefits of CBD oil, benefits from hemp, benefits from medicinal,” said Porter, who manages as a gas station and convenience store. “I think it offers a lot of opportunities, a lot of benefits for people with cancer to fight diseases.”
He has been working on his application for eight months to open a medical dispensary, but he expects an influx of recreational businesses to make applying even more difficult.
“I think it’s going to be tremendously competitive,” Porter said. “Any kind of application like this is going to be difficult. They’ve had medicinal around for years, so it’s going to be tough to get your foot in the door.”
Erin Laubscher, 41, of Edwardsville, said she wants to open a dispensary and she and her business partner have a building in Wood River picked out.
She said she has seen the medical benefits for her husband, who has a seizure disorder.
“I think it will be a big rush because there’s so many aspects you can use it in, a million different conditions, pain, medical conditions, I think it will be great,” Laubscher said.
‘Harmed by the war on drugs’
Lt. Gov. Juliana Stratton said the social equity and expungement portions of the law, and grants that are meant to help minorities and communities that have been affected by marijuana prohibition, are important.
“We have really had a social justice and really equity-centric focus on this legislation and we want to see people starting businesses, but we want to make sure it’s expanded to people who would have some barriers to being able to enter the business,” Stratton said.
The legislation included language that could lead to 770,000 criminal records being expunged, and low-interest loans to open up to people who normally can’t get start-up capital.
“Our goal is to make sure we have people who typically would see barriers to entering this industry, to having a pathway to enter it, especially from communities that have been disproportionately harmed by the war on drugs,” Stratton said.
The Department of Commerce and Economic Opportunity plans to partner with local banks to create the loan programs.
“It’s not just about the loans, it’s also about providing the mentorship and the tools folks need to start a business,” said Acting DCEO Director Erin Guthrie. “Starting a business is intimidating.”
Businesses meet marijuana businesses
At the cannabis convention in Collinsville, there were businesses showing off types of tools a dispensary or cultivation center could use, including security cameras, packaging equipment, greenhouses, insurance, HVAC systems and business software.
There was one company that provides safes that can be used to store cannabis. That company started off as a gun safe business.
Jen Wynn, vice president of expositions for Cannabis Industrial Marketplace, said the company started doing conventions this year around the country, with one in Chicago planned for September.
“Illinois has had a lot of interest, and it will continue to grow,” she said.
Wynn said people looking to get into the industry may need help with managing the taxes associated with the businesses, and security, among other things.
“There’s licensing, there’s the insurance, there’s the shelving, all those aspects of it,” Wynn said. “That’s where we bring businesses together and have that kind of networking event as opposed to just a show for consumers.”