Illinois Cannabis Applications: From The Front Lines

The deadline to submit an application to the Illinois Department of Financial and Professional Regulation or Department of Agriculture to run a dispensary or grow facility (respectively) came and went on Monday this week. With applications complete, the conversation now turns to how many applications were submitted and when decisions might be made.

Yesterday afternoon we learned that the state received 211 applications for the 60 dispensary licenses that will be awarded, and 158 grower applications for a mere 21 cultivation center licenses. Clearly competition will be stiff, particularly on the grow side, but nowhere near what some had predicted. Just a week or so ago, numbers in neighborhood of five to seven hundred were being tossed about — numbers we thought were overly optimistic. Our best guess, based upon our own conversations with potential and actual clients and those already in the industry, attendance at various local cannabis events, the hefty application and accompanying fees, and the fact that Illinois only has a 4-year pilot program in place, was that there would be an average of around 4 applications per available dispensary license. Guessing at the number of possible grower applications was harder – though the fee just to apply was $25,000 (and another $200,000 to get your license and open your doors), the grow side is widely seen as the more lucrative part of the business, especially in Illinois where so few will supply the entire state. In that regard, the number of people willing to roll the dice on the grower application is not too surprising.

As reported in today’s RedEye, the director of Illinois’ medical cannabis pilot program Bob Morgan was pleased with the number of applications received, and has high hopes that the competitive process will result in a quality medical cannabis marketplace in this state. Morgan also clarified that applications would be first given a once-over for completeness, and applicants given a chance to cure any defects (though we suspect glaring omissions may still get your app tossed).

So, who were all these applicants? Our lawyers were in the application line on Monday afternoon, and like much of the industry, it was a mixed bag. There were applicants with lawyers or consultants in suits, applicants barely out of college in jeans and t-shirts, locals and out-of-staters. Nearly everyone looked a little frazzled, but the atmosphere was generally congenial (some who had forgotten to seal or label their original unredacted application were passing rolls of Scotch Tape and Sharpies). The Sun Times reported that “dozens” were in line at 3 pm and “hundreds” of applications were received Monday, but that was not our impression. At 3 pm (the time by which you had to be in line to meet the deadline) there were probably 25 or so queued up, but rumor had it the office was quiet just an hour before. DFPR officials that were processing receipt of applications did not seem like they had been mobbed all day.

We snuck a peek at the notes of one official who was tallying which district each dispensary applicant was applying in, and, from that cursory glance, it looks to us like there may be a handful of districts where one or two, or maybe even no applications were received. The state has said before that if no acceptable application is received for a particular district, it will reopen the application window. Based on what we saw Monday and the overall numbers, we are guessing this may happen for two or three districts.

Assuming the application window is reopened, we would expect a tight timeline for those applications – probably starting in the next month. The numbers of applications received in each district is supposed to be announced late next week, so by then officials will know if there are districts with no applicants, and will likely have taken a look at the districts with only one or two applications. Given that the state wants decisions reached by the end of the year (though we might say by Thanksgiving, even), any new applicants will have to have submissions ready in the very near future.