Illinois Medical Cannabis License Applications. The Basics

Better get out a pen.

The list of tasks you need to complete before you even submit your Illinois medical cannabis license application is quite long. But if you’re a glass half-full type, you should view the state’s rigorous application process as serving to both weed out (pun intended) the corner-cutters who could ruin the pilot program for us all, and as ensuring that you get all of your ducks in a row before entering the medical cannabis marketplace in Illinois. The recent release of the draft regulatory rules from the departments of Agriculture and Financial and Professional Regulation gave us a much better idea of what the application process will look like.

Though there are particular provisions that apply only to dispensaries or to cultivators, applicants for either type of license will be providing exhaustive information on each of the following:

  • Finances: If you can name it, you probably have to provide it. Budgets, projected revenues and expenditures, funding sources, documentation related to any loans, mortgages, etc. incurred in starting up your business. If applicable (i.e., if you are already in operation in another state), last year’s financial statements and three years of tax returns.
  • Ownership and Organization: You need to document your ownership structure and provide an organizational chart, as well as copies of your articles of incorporation/organization, operating or partnership agreements, agreements relating to profit/loss sharing. And the big one — complete disclosure of anyone with a direct or indirect interest in your medical cannabis business.
  • Operating plans: The state of Illinois needs to know the nuts and bolts of your operation. What will you sell? How much? How will you transport or receive your product? How many employees will you need? How will you train them? What benefits will you provide? How will you keep your medical cannabis out of the wrong hands? The state is basically asking for your business plan, which you should have anyway.
  • Background checks: Live scan checks of your officers, board members, and agents (employees) will be required. Illinois state police and FBI records will be searched. You may want to begin this process now, because if anyone involved in your project has a criminal history that includes an “excluded offense” (i.e., a felony or drug crime), your application will be red-flagged.
  • Security: Cannabis in any shape or form must be stored in a safe, vault, or secured room. At minimum you will need perimeter alarms, a panic alarm, video surveillance (including the parking lot). Law enforcement will have access to surveillance video or photos via online portals. Access to your business should be as limited as possible, to only those necessary for efficient operation of the facility. Site drawings and/or plans submitted with your application must show your intended security system and describe the various access points and security measures (e.g., bulletproof glass, silent alarms, etc.) within each room. Check the rules for more detailed information on surveillance, including required resolution, date and time stamps, and video tape retention.
  • Inventory and tracking: Obviously you can’t inventory a product you can’t yet sell, but Ag and DFPR want to know how you will do it if you become licensed. You will have to submit detailed plans for tracking purchases, sales, stock on hand, and any waste or lost product.
  • Zoning: You will need to provide evidence of the zoning restrictions for your proposed location and evidence that your facility will comply with those restrictions. This may require applying for or obtaining special use permits or variances.
  • Bonus points: Illinois opted for a points-based system for evaluating dispensary registration and cultivator permit applications, rather than a lottery. Thus, both DFPR and the Department of Agriculture included a list of attributes that might give your application a bump, including: certified woman- or minority-owned business, environmentally friendly operations, facilitating medical cannabis research, plans to positively impact your local community and combat substance abuse, employee-friendly policies.

This list is by no means exhaustive of the myriad requirements of Illinois medical cannabis business applicants, but it should give you an idea of what you will need to be focusing on over the coming months.