Want to Apply for an Illinois Cannabis Store License? Start With this List of To-Do’s

The Illinois Department of Financial and Professional Regulation announced the recipients of the first adult-use retail licenses last week. The five (5) same site adult-use licensees currently operate medical marijuana dispensary operations in Mundelein, Naperville, Joliet, Canton, and Effingham.

The recipients of the same site license will be permitted to open a second location. The DFPR expects to receive additional applications as local municipalities adopt zoning ordinances that permit adult-use cannabis establishments.

The state also will not review an application for a secondary site license unless the applicant submits an approval or a conditional approval from the local zoning authority. The DFPR indicates that medical cannabis licensees may find it difficult to locate a city that permits adult-use stores, or real estate that is at least 1,500 feet away from another retailer. An entity that is first to receive a license from the DPFR will be the recipient if there is a zoning conflict.

The DPFR will release the application for the 75 retail licenses that are available for those entities that are not medical cannabis license holders no later than October 1, 2019. The retail licenses will be allocated throughout 17 designated regions.

Applications must be submitted to the DPFR by January 1, 2020, and the winners will be announced no later than May 1, 2020. The scoring methodology appears to be straightforward with the majority of points to be awarded for security and recordkeeping (26%), business, finance and operating plan (26%) and social equity status (20%). If there is a tie between two applicants, the state will award the license to the applicant with the most generous Community Benefits Plan.

It is not clear whether Illinois will require applicants to provide local zoning approval along with the application prior to the January 1, 2020 submission deadline. The process is more complicated given the limited number of licenses available in the majority of regions.

Entities that are thinking about applying for a conditional adult-use cannabis retail license should begin to:

  • Locate a city and property for the retail cannabis establishment.

  • Document the organizational structure including gathering information from principal owners, board members, and management. Entities should consider a social equity structure as this constitutes 26% of the score. Document how the social equity status will be reflected in the ownership and management structure.

  • Create pro formas that show how the business will be capitalized and operated in a profitable manner. Collect information that demonstrates that all start up funds are liquid and are from legal sources. The pro formas should be realistic and tie to the overall business plan. Ensure that the revenues and costs are realistic given current market prices.

  • Create a security plan that incorporates the findings of professional security consultants. Make sure that the security features are outlined on your site plan and include the requirements from the local municipality where the cannabis dispensary will be located. The security plan should also include the controls that will be used to ensure that records are safe and unalterable.

  • Read through the scoring methodology and work with your business partners to structure a business plan that exceeds the requirements of each category. The result should be realistic and reflect how your organization can execute and be an asset for the community.