Illinois Recreational Cannabis Market: New License Applications Available for Craft Growers, Infusers, and Transporters

In Illinois’ recent dispensary application process, over 700 applications were submitted for 75 dispensary licenses, of those received by the state more than 600 qualified as social equity applicants. 50 of the 250 possible points on the dispensary applications were awarded to social equity applicants. Outside of social equity status, the state’s grading focused heavily on the business plan, financials, operating plan, floor plan, security, record keeping, and cannabis-specific knowledge and experience. Such a highly competitive application process demands that teams are highly qualified and put in the work to differentiate themselves in the application’s narrative. The process was complicated and required meticulous attention to detail to correctly articulate the company’s plans and team qualifications. We learned a great deal about how to handle social equity applicants, (include other, deep findings from our work in the process here). For those who submitted their new entrant adult-use dispensary applications by the January 2, 2020 deadline, licenses will be awarded in the coming months, and businesses are anticipated to open by May 2020. The pressure is on for the 21 cultivation centers to quickly scale their operations and prepare for these new dispensaries. 

Demand for recreational cannabis in Illinois is likely to outweigh supply for at least the first year. With the next round of licenses for adult-use Cultivation Centers slated for July 2021, a new category of cultivator called a Craft Grower will be issued licenses by July 2020, to help bolster the supply from the current Cultivation Centers. Craft Grower licenses are limited to a flowering canopy size of 5,000 sq.ft. from the start, but upon approval by the state, they can increase their production in increments of 1,000 sq.ft. based on the needs of the market and the company’s track record of compliance, until a maximum of 14,000 sq. ft. We expect the Craft Grower license process to be just as detailed, demanding, and competitive as this past round of dispensary license applications. Contact 3C if you would like to hear our thoughts on handling this application process.

Now is a once in a lifetime opportunity to secure one of the first Craft Grower, Infuser, or Transporter licenses in Illinois. The Illinois Department of Agriculture just released applications on January 7, 2020, for these license types. Here are some of the highlights for each license type:

• Suitability of the Proposed Facility (75 points)
• Suitability of Employee Training Plan (50 points)
• Security Plan and Record-keeping (145 points)
• Cultivation Plan (75 points)
• Product Safety and Labeling Plan (95 points)
• Business Plan and Services to be Offered (110 points)
• Applicant’s Status as a Social Equity Applicant (200 points)
• Applicant’s Labor and Employment Practices (20 points)
• Environmental Plan (20 points)
• Illinois Resident Controlled or Owned (90 points)
• Veteran Controlled or Owned (20 points) 
• Diversity Plan (100 points) 

• Proof of property ownership or a lease and property owner’s approval. All mortgagees and/or lienholders also must provide written approval. 
• Notice of proper zoning and approval from the local zoning authority.
• Organizational Information and Financial Interest Disclosure
• Principal Officer and Board Member Disclosures for each individual.
• A notarized statement acknowledging the terms of the application process. 
• Applicant must complete the Fingerprint Submission Consent and Notification Form and submit it directly to a live scan vendor. 

• Energy Use Requirements for Lighting (Section 21a) 
• “The Lighting Power Densities (LPD) for cultivation space commits to not exceed an average of 36 watts per gross square foot of active and growing space canopy, or all installed lighting technology shall meet a photosynthetic photon efficacy (PPE) of no less than 2.2 micromoles per joule fixture and shall be featured on the Design Lights Consortium (DLC) Horticultural Specification Qualified Products List (QPL). In the event that DLC requirement for minimum efficacy exceeds 2.2 micromoles per joule fixture, that PPE shall become the new standard”
• HVAC Requirements (Section 21b)
• “For cannabis grow operations with less than 6,000 square feet of canopy, the licensee commits that all HVAC units will be high-efficiency ductless split HVAC units, or other more energy efficient equipment;
• For cannabis grow operations with 6,000 square feet of canopy or more, the licensee commits that all HVAC units will be variable refrigerant flow HVAC units, or other more energy efficient equipment;”
• Irrigation and Water Efficiency (Section 21c) 
• “The craft grower facility commits to use automated watering systems, including, but not limited to, drip irrigation and flood tables, to irrigate cannabis crop; 
• The craft grower facility commits to measure runoff from watering events and report this volume in its water usage plan, and that on average, watering events shall have no more than 20% of runoff of water;”
• Water Filtration (Section 21d)
• “The craft grower commits that HVAC condensate, dehumidification water, excess runoff, and other wastewater produced by the craft grower facility shall be captured and filtered to the best of the facility’s ability to achieve the quality needed to be reused in subsequent watering rounds;” 

• Applicants with experience in agricultural cultivation techniques, industry standards, and academic degrees in related fields will be prioritized in the application.

• Suitability of the Proposed Facility (75 points)
• Suitability of Employee Training Plan (50 points)
• Security Plan and Record-keeping (145 points)
• Infusing Plan (75 points)
• Product Safety and Labeling Plan (95 points)
• Business Plan and Services to be Offered (110 points)
• Applicant’s Status as a Social Equity Applicant (200 points)
• Applicant’s Labor and Employment Practices (20 points)
• Environmental Plan (20 points)
• Illinois Resident Controlled or Owned (90 points)
• Veteran Controlled or Owned (20 points) 
• Diversity Plan (100 points)

• Proof of property ownership or a lease and property owner’s approval. All mortgagees and/or lienholders also must provide written approval. 
• Notice of proper zoning and approval from the local zoning authority.
• Organizational Information and Financial Interest Disclosure
• Principal Officer and Board Member Disclosures for each individual.
• A notarized statement acknowledging the terms of the application process. 
• Applicant must complete the Fingerprint Submission Consent and Notification Form and submit it directly to a live scan vendor.

Application Scoring Criteria (1,000 Total Points) 

• Business Plan (180 points) 
• Suitability of Employee Training Plan (160 points)
• Security and Record-keeping (200 points)
• Applicant’s Status as a Social Equity Applicant (200 points)
• Applicant’s Labor and Employment Practices (20 points)
• Environmental Plan (20 points)
• Illinois Resident Controlled or Owned (100 points)
• Veteran Controlled or Owned (20 points)
• Diversity Plan (100 points)

• Financial Interests Disclosure
• Principal Officer and Board Member Disclosures for each individual.
• A notarized statement acknowledging the terms of the application process. 
• Applicant must complete the Fingerprint Submission Consent and Notification Form and submit it directly to a live scan vendor.

Illinois is poised to be one of the leading cannabis markets in the United States, and we believe that those who attain these coveted licenses will be uniquely positioned for future expansion and M&A opportunities. Since permits are limited, those who aggressively pursue these initial licenses will, without a doubt, have the best opportunities to develop incredible products and capture market share in the Illinois adult-use cannabis market.