You and Illinois’s new Cannabis Regulation and Tax Act. Part 5 – Dispensaries

In Part 2 of this series we discussed early approval of Adult Use Dispensing Organization Licenses that will be made available to current medical cannabis dispensing organizations under the new Illinois Cannabis Regulation and Tax Act.   But what about dispensary licenses that aren’t connected to the prior medical facility licenses (everything but the early approval licenses).

Under the Act, the Illinois Department of Financial and Professional Regulation (IDFPR) is responsible for issuing the new Conditional Adult Use Dispensing Organization Licenses.  The Act requires the IDFPR to issue up to 75 Conditional Adult Use Dispensing Organization Licenses before May 1, 2020 and an additional 110 licenses by December 21, 2021.  To ensure geographic dispersion of the Conditional Adult Use Dispensing Organization Licenses, the licenses are to be awarded based on the percentage of the Illinois’s population in each of the Act’s delineated geographic regions.

 To be awarded a Conditional Adult Use Dispensing Organization License, an application must meet thirty different requirements, including:

• Payment of a nonrefundable application fee of $5,000 for each license for which the applicant is applying.
• Certification that the applicant will comply with the requirements of the Act.
• Listing the legal name, address, telephone number, and email address of the proposed dispensing organization.
• A statement that that the dispensing organization agrees to respond to the IDFPR’s supplemental requests for information.
• The details of various financial and biographical information of each principal officer.
• A description of the training and education that will be provided to dispensing organization agents.
• Copies of the proposed operating bylaws, business plan, inventory control plan, and floor plan.
• Evidence of the applicant’s status as a Social Equity Applicant, if applicable, and whether a Social Equity Applicant plans to apply for a loan or grant issued by the Department of Commerce and Economic Opportunity.
• A plan for community engagement.
• Procedures to ensure accurate recordkeeping and security measures.
• The estimated volume of cannabis the organization plans to store at the dispensary.
• A description of the features that will provide accessibility to purchasers as required by the Americans with Disabilities Act.
• Detailed descriptions of various parts of the organization’s facilities, including the air treatment system and the facility where cannabis will be stored.
• A reasonable assurance that the issuance of a license will not have a detrimental impact on the community in which the applicant wishes to locate.
• Signed statements from each dispensing organization agent stating that he or she will not divert cannabis.
• The number of licenses it is applying for in each geographic region.
• A diversity plan that includes a narrative of at least 2,500 words that establishes a goal of diversity in ownership, management, employment, and contracting to ensure that diverse participants and groups are afforded equality of opportunity.
• A contract with a private security contractor that is licensed under the Private Detective, Private Alarm, Private Security, Fingerprint Vendor, and Locksmith Act of 2004.
• Other information deemed necessary by the Illinois Cannabis Regulation Oversight Officer to conduct the disparity and availability study to be conducted by the State.

After the application is submitted, it’s time for the IDFPR to evaluate it.  Section 15-30 of the establishes the selection criteria for conditional licenses.  The Department will score the applications out of a total of 250 points.  Applicants will be awarded points based on a determination that the application satisfactorily includes the following:

• Suitability of Employee Training Plan (15 points)
• Security and Recordkeeping (65 points)
• Applicant’s Business Plan, Financial, Operating and Floor Plans (65 points)
• Knowledge and Experience (30 points)
• Status as a Social Equity Applicant (50 points) (Social Equity Applicants are businesses where the ownership or staff has been directly impacted by the enforcement of cannabis related laws)
• Labor and Employment Practices (5 points)
• Environmental Plan (5 points)
• Illinois Owner (5 points)
• Status as a Veteran (5 points)
• A Diversity Plan (5 points)

The IDFPR may award up to 2 bonus points for an applicant’s plan to engage with the community.  

An applicant who receives a Conditional Adult Use Dispensing Organization License will have 180 days from the date of the award to identify a physical location for the dispensing organization retail storefront. 

The IDFPR will not issue the Conditional Adult Use Dispensing Organization License to an applicant until the IDFPR has inspected the dispensary site and the license awardee has paid a registration fee of $60,000.

Without doubt, there will be more applications than available licenses, so it will be vital for all applicants to develop and refine their applications to score as many points as possible to give themselves the best chance at being awarded a license.