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Illinois Gives Next Steps for Conditional Adult-Use Dispensary Licenses

The pace of licensing will be determined by how quickly applicants' compliance checks can be verified.

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On Friday, the Illinois Department of Financial and Professional Regulation (IDFPR) announced the next steps to issue 185 conditional adult-use cannabis dispensing organization licenses to applicants selected in three lotteries in 2021. State courts recently lifted stays that previously prevented the release of the licenses.

Applicants must finalize statutory compliance checks before conditional licenses can be issued. To accommodate these compliance checks, beginning June 16, 2022, IDFPR intends to issue conditional licenses to the applicants selected in the 2021 lotteries in three waves:

  • Wave 1, on or before July 22, 2022. Naperville-Chicago-Elgin BLS Region.
  • Wave 2, on or before August 5, 2022. Other BLS Regions with multiple licenses available.
  • Wave 3, on or before August 19, 2022. BLS Regions with a single license available.

The pace of licensing will be determined by how quickly applicants' compliance checks can be verified.

"Today marks the beginning of the next chapter of the most equitable adult-use cannabis program in the country," said Governor JB Pritzker in a statement. "After signing the most equity-centered program in the country into law, expunging thousands of low-level cannabis convictions and investing tens of millions of dollars in cannabis proceeds in communities failed by the war on drugs, we are about to more than double the number of adult use cannabis dispensaries in Illinois. This means countless more opportunities for communities that have suffered from historic disinvestment to join this growing industry and ensure its makeup reflects the diversity of our state."

Next Steps

Principal officers must submit a principal officer affirmation form which will be available on the department's website and must be submitted no later than July 1, 2022.

Moving forward, IDFPR will work with the Illinois Department of Revenue to verify all principal officers are not delinquent in taxes or owe money to the state. IDFPR will notify any applicant if a principal officer is not tax compliant. The applicant will then have 60 days after notification to prove tax compliance. Any applicant with a principal officer who is not tax compliant after the 60-day period shall forfeit their awarded license, which will then be offered to the next eligible applicant.

In addition, IDFPR will verify that no principal officers have a financial interest in more than ten adult-use cannabis dispensary licenses. Any applicant with a principal officer who may become a principal officer in any combination of more than ten licenses will forfeit any license they are awarded.

Additionally, any other applications the principal officer is involved with will also forfeit any licenses they are awarded. Any forfeited licenses will be offered to the next eligible applicants.

After IDFPR issues the licenses, background checks will be conducted on principal officers. After receiving a conditional license, licensees will have 180 days to select a physical storefront location and obtain the full adult-use dispensing organization license (the full list of criteria to be met may be found here).

If a conditional licensee is unable to find a suitable physical location within the 180-day period, they may request an 180-day extension. License holders are not permitted to purchase, possess, sell or dispense cannabis or cannabis-infused products until the applicant has received a full adult-use cannabis dispensing organization license.

Through a separate program administered by the Illinois Department of Commerce and Economic Opportunity (DCEO), the state offers low-interest loans to qualified licensed companies through its Social Equity Cannabis Loan Program. The first round of social equity license applicants are expected to finalize loan agreements directly with DCEO's partner lending institutions in the coming weeks. The next phase of the loan program will be launched in the near future.

DCEO also funds free licensing and post-licensing technical assistance through their partners at Oakton Community College, The Trep School, the Women's Business Development Center and the University of Illinois Chicago Law School.

To ensure fairness for all applicants and correct any errors in the lottery process, IDFPR has also announced its plans to conduct three corrective lotteries in June (one for each of the cannabis dispensary license lotteries held in 2021).

The department faces continued litigation and will comply with any pertinent court orders.

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