Illinois passed recreational cannabis laws in June 2019, with retail sales beginning on January 1st, 2020. The Cannabis Regulation and Tax Act allows consumers to use, sell, and possess small amounts of cannabis and provides a legal framework for medical marijuana users. Non-medical cannabis users cannot cultivate their own cannabis in Illinois.
Opening up a cannabis dispensary in Illinois can be an exciting and profitable venture. However, you will have to carefully familiarize yourself with the state’s cannabis laws and take time to make sure your business remains compliant well into the future.
Do I need a license to operate?
Yes. Illinois has a two-step licensing process. First, prospective dispensary owners need to apply for a Conditional Adult Use Dispensing Organization License. Conditional license holders have 180 days to find a suitable location to open the dispensary in their district, pass an inspection, and pay a registration fee. At that point, they will earn an Adult Use Dispensing Organization License.
Who manages cannabis licenses in Illinois?
The Department of Financial and Professional Regulation oversees cannabis programs for the state of Illinois.
How do I get a license in Illinois?
To obtain a cannabis dispensary license in Illinois, you must create a comprehensive business plan, obtain a conditional license, find a suitable location, pass an inspection, apply for the full license, and pay a registration fee.
All of the forms you need to begin the application process are on the Department of Financial and Professional Regulation’s cannabis program website.
How much does a license cost?
Conditional license applicants have to pay a $5000 application fee. Conditional license holders who successfully apply for a full license must pay a registration fee of $60,000, valid for two years.
Illinois offers a discount on licensing fees to individuals from communities that have been disproportionately impacted by cannabis laws. Social equity applicants must be majority-controlled by individuals who live in areas with high rates of unemployment, poverty, social welfare, or cannabis-related crime, who have been personally convicted for cannabis-related offenses, or who hire at least ten employees, with the majority fitting the same criteria. Social equity applicants only pay $2500 for conditional registration and $30,000 for a two-year license.
So far, over 600 of the 700 conditional license applications under state review are social equity applications.
5. Are there annual licensing fees?
There are. Illinois cannabis licenses cost $30,000 per year for non-equity applicants and $15,000 per year for social equity applicants. These are paid on a two-year basis.
6. What license type do I need to service recreational and medical patients?
Illinois offers both recreational and medical cannabis licenses to prospective dispensary owners. Along with the creation of a recreational market, Illinois also expanded qualifying medical conditions to include chronic pain, migraines, osteoarthritis, and a variety of other conditions in 2019.
7. Will I be able to get a retail license if I already have a dispensary?
Yes. Of the five licenses issued before January 1st, 2020, all were same-site licenses at existing medical dispensaries. However, in Naperville, one of those licenses was blocked by a city council vote against opening recreational cannabis dispensaries in its jurisdiction.
8. What local (county level) permissions will I need to operate?
Local governments can issue their own requirements concerning recreational cannabis dispensaries and are empowered to block dispensaries from opening entirely. For example, Naperville does not allow any recreational cannabis businesses to operate within its jurisdiction.
Cannabis Event Information
Do I need a license to host a cannabis event in Illinois?
There is no need to hold a license for hosting a public cannabis event like the NECANN convention. Conferences and expos are covered under state law. Consumption-related private events do occur in Illinois, but operate in a legal grey area and are typically restricted to areas with historically cannabis-friendly local ordinance, like Chicago.
In those events, hosts typically manage medical-only consumption events with the stipulation that all attendees are medical marijuana license holders. In general, these events have to prohibit on-premises consumption if non-medical consumers attend.
Do I need a separate premises license for cannabis events?
No. You do not need to apply to the state for a cannabis event premises license, but you will need to clear your intent with the venue.
Can I get a cannabis event license if I hold a retailer license?
There is no law preventing cannabis retailers from hosting events, but licensed businesses tend not to participate in events in any official capacity. When they do, it is most often in a traditional happy hour or cocktail party format, where cannabis consumption does not occur.
Managing Your Business in Illinois
How can I ensure that I remain compliant?
Pay close attention to developments in the cannabis retail space, particularly with respect to regulatory compliance. You will have to track every transaction, implement a robust security plan, and document all of your processes clearly in order to pass regulatory scrutiny.
What security measures am I required to take?
You must implement access restrictions, alarms, and video surveillance in your dispensary and submit your security plans to the state. The state makes strict security requirements of cannabis dispensaries in Illinois. You must have:
24/7 closed-circuit video surveillance displayed on 19-inch monitors,
A backup system that can remain operational during power outages,
Enough security storage space to retain video surveillance for 90 days.
Additionally, video surveillance data must be made available to regulators in real-time through a secure web-based portal with reverse functionality 24 hours per day.
These requirements will significantly add on to the initial startup costs for a dispensary in Illinois.
Can I package and label cannabis in my retail store?
Yes, Illinois requires dispensary agents to complete a cannabis retail training that covers cannabis storage, packaging, and labeling. All cannabis being transported to or from a dispensary must be properly labeled and packaged.
Can I sell alcohol or tobacco at my cannabis retail store?
Illinois does not allow cannabis dispensaries to sell alcohol except in tinctures, defined as products containing no more than 100 milliliters of liquid. The state law does not mention tobacco.
Can I vertically integrate my cannabis businesses?
Illinois imposes a maximum limit on the amount of cannabis a dispensary can stock from a single cultivator. Dispensaries cannot stock more than 40% of their product from a single source. Other than this stipulation, there are no specific rules against vertical integration.
Can I sample or give product away in store?
Illinois state law does not specifically prohibit product give-aways, but it does have strict requirements about transaction reporting and consumer verification. It requires dispensaries to list cannabis as either “sold” or “destroyed” and to provide detailed information.
What are the operating hours for a retail shop?
Illinois cannabis dispensaries are only allowed to operate between 6:00 AM and 10:00 PM. Also, dispensaries cannot operate when there are less than two employees on-premises.
Can I have public-facing displays on my storefront?
Yes, but you cannot include images of cannabis plants or leaves, nor make any medical claims about cannabis-infused products. You cannot include images of cartoons, toys, animals, or children, nor can you stock products that imitate candy packaging. You also may not depict the actual consumption of any cannabis product on public or in-store displays.
How old does someone need to be to buy cannabis?
Recreational cannabis consumers must be 21 years of age or older. Medical cannabis users under 18 must identify a designated caregiver.
What is seed-to-sale reporting, and what is required of retailers?
The Illinois Department of Public Health contracted BioTrackTHC as its seed-to-sale reporting partner. Cannabis dispensaries must appoint an “agent-in-charge” whose responsibilities include daily inventory reconciliation and reporting all transactions to the state through the seed-to-sale tracking system.