Illinois Cannabis Dispensary Lottery 2023

In order to get a dispensary in Illinois in 2023, you will need to apply on time and meet a few qualifications. You must be social equity as defined under new regulations. If you cannot meet the requirements of social equity you can not play the lottery to win one of 55 new Illinois cannabis dispensary licenses being awarded in 2023.  We will explain how to qualify for eligibility and provide help to those hopefuls that want to open a dispensary in IL.  Contact our offices for help getting into the lottery, or after you win.  You won’t really need a lawyer or consultant until after you win.

How to qualify for the Illinois Social Equity Cannabis Dispensary License Lottery.

If you meet all of the qualifications, you can apply for a dispensary license through the Illinois Department of Financial and Professional Regulation (IDFPR). The application process is not straightforward, and the department will provide all of the information you need to apply.  However the IDFPR’s own press release from December 21, 2022, contains inconsistencies with the approved regulatory process.  The regulations for eligibility for the social equity lottery calls for either/or Criteria 1 and Criteria 2, but the IDPFR says that you need both.  This may result in a lawsuit during the licensing process to make the regulations comply with the statute and for the IDFPR’s procedures to comply with their own regulations.

The IDFPR has changed the definition of Social Equity, despite not amended it under the statute, and probably has exceeded its authority.  However, it gets more peculiar when you consider that the IDFPR has provided a procedure for the lottery and cites to a section of their own regulations, but the procedure is completely different from the cited regulation.

The IDFPR said:

This guide provides examples of the types of documents that are acceptable for top
participants’ individual majority owners to prove their social equity status for Criteria A
and Criteria B, as required in 68 IAC 1291.410(e).

How to open an Illinois Cannabis Dispensary in 2023

However, the regulation requires something wholly different than what the IDFPR says in its forms for the new dispensary license lottery in Illinois for 2023. Reg 68 IAC 1291.410(e)(6) actually provides for either one or another way to be eligible for the lottery and not both of them.  The regulation cited by IDFPR provides as follows at subpart (6):

6) an acknowledgement that if awarded an opportunity for a conditional license in the lottery, the applicant (1) will meet and prove at least one of the criteria of paragraph (A) of this section for Option 1; or (2) will meet and prove at least 4 of the criteria of Paragraph B of this Section for Option 2.

A) Option 1 (only 1 required)

  1. The applicant is an Illinois resident with at least 51% ownership & control by people who have resided for at least 5 of the preceding 10 years in a DIA; or
  2. The applicant is an Illinois resident with at least 51% ownership & control by a person or a member of their family arrested for, convicted of, or adjudicated delinquent for any offense eligible for engagement under the Act.

B) Option 2 (4 required)

  • 26% owned by Social Equity applicant;
  • will locate and operate dispensary for at least 2 years in a DIA;
  • during first 2 years will buy at least 25% of cannabis from social equity license holders;
  • During first 2 years will use 30% of all services and vendors from minority, women, or disabled owned businesses;
  • grant $250,000 to a community college and provide mentorship;
  • within 60 days of winning a license provide $250,000 to a grant to another license that is actually owned by a social equity applicant;
  • within 60 days, pay $500,000 to the Cannabis Business Development Fund.  (edited for brevity – Link to regulations: Here)

The IDFPR Press Release from December 21st provides different requirements for eligibility:

In order to be eligible for a conditional license in the above scenario, the top participant must prove to the Department for each individual making up 51% ownership:

  1. The individual’s home address is within the eligible census tract in Criteria A;
  2. The individual has resided at the home address for a total of 5 of the past 10 years
    and has appropriate documentation and proof (acceptable documents listed below); and
  3. The individual qualifies under one of Criteria B’s requirements.

The IDFPR again stated their policy on having both the long time & current residency in a DIA plus be a victim of a qualifying arrest, its family member, or a gun violence victim.

Remember, if a top participant has multiple individuals who make up the 51% ownership or control of the entity, the top participant needs to prove the above three bullet points for each individual.

The IDFPR cited a regulation, then failed to follow it completely and expanded the scope of social equity to mandate current residence in a DIA, and a qualifying arrest or conviction, and long time residency (5 of past 10 years) in a census track for poverty, food stamps, or a victim of a gun crime.

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Eligibility under Criteria 1

  1.  Criteria A(i): Poverty Level Census Tract 7
  2. Criteria A(ii): SNAP Census Tract  Criteria A(iii):
  3. Food Desert Census Tract.
  4. Criteria A(iv): Medicaid, Supplemental Security Income, Social Security Disability, and/or Subsidized Housing  Criteria
  5. A(v): High School Graduation Tract

The IDFPR has read into the phase “who has resided for at least 5 of the preceding 10 years” to mean current residency as well as long time residency.  This means that if you want to win an Illinois Cannabis Dispensary license in 2023, you must only live in very specific areas of the state.

Eligibility under Criteria 2

To qualify for eligibility for Criteria 2, you must be an individual who has been arrested for, convicted of, or adjudicated delinquent for any offense, or substantially similar offense, of Illinois, federal or other state law for: •

  • possession of not more than 500 grams of cannabis; or • manufacture, delivery, or possession with intent to deliver, or manufacture of cannabis up to 30 grams;
  • An individual who has a family member who has been arrested for, convicted of, or adjudicated delinquent for any offense, or substantially similar offense, of Illinois, federal, or other state law for: • possession of not more than 500 grams of cannabis; or • manufacture, delivery, or possession with intent to deliver, or manufacture or cannabis up to 30 grams.
  • An individual who has been a victim of firearm injury, as those terms are defined in this Part. This must be evidenced by either a police report or medical record.

Timeline for Illinois dispensary lottery 2023

Despite not following their own regulations, IDFPR will provide only 2 weeks for eligible applicants to play the lottery.  The lottery window should be open between February 1st to the 14th of 2023.  All applications must be completed on the IDFPR web portal.  The IDFPR predicts the following steps:

  • form an entity eligible under social equity requirements
  • submit application before February 14, 2023
  • Publish list of lottery participants that qualify
  • Five days to contest list
  • lottery for 55 new conditional dispensary licenses
  • 45-day ‘prove-up’ period to prove you are social equity
  • IDPFR review of eligibility
  • deficiency period
  • notification of next highest lottery loser (2nd place) if winner is not social equity
  • issue conditional licenses.

What happens after you win the Illinois dispensary lottery in 2023

Once your application wins the lottery and you prove social equity eligibility, you will need to secure a location for your dispensary and undergo a rigorous inspection process. The department will also require you to submit detailed plans for your dispensary, so make sure you have everything planned out ahead of time.

Once your dispensary is open, you will need to follow all state regulations regarding cannabis sales. You must also comply with local zoning regulations, so make sure you know what those are before starting your business.

Disproportionately impacted areas in Illinois

In Illinois, those who have been disproportionately impacted by cannabis prohibition are given priority consideration when applying for a dispensary license. These criteria include individuals within an eligible census tract; individuals who have resided at their home address for 5 of the past 10 years with appropriate documentation and proof; and individuals who qualify under one of Criteria B’s requirements. Applicants must also provide satisfactory evidence that they meet all Illinois licensing requirements, including experience in the Illinois cannabis industry as well as specific financial qualifications (i.e., documented financial resources).

How much does it cost to apply for a dispensary license in Illinois

Only $250 dollars.  You can only apply once.  However, if you win, a compliant Illinois cannabis dispensary may cost approximately $1.5 million dollars to open its doors. It may cost even more if the real estate is in or around Chicago.

Conclusion.

The first step to obtaining an Illinois dispensary license is to register for an account on IDFPR’s website and submit an application. Applicants will then be required to submit supporting documents, such as proof of Illinois residency and financial information, as part of the licensing process. Once you have submitted all of your necessary documents and passed both background checks, IDFPR will send you a conditional license. This does not guarantee final approval; however, it does allow applicants to proceed with the next step in the Illinois dispensary license process.

Finally, applicants must complete the Illinois Dispensary License Final Application and wait for a decision from the Illinois Department of Financial & Professional Regulation. If approved, a successful applicant can begin their journey as an Illinois cannabis dispensary owner and start selling recreational marijuana legally to adults 21 years or older.

By understanding Illinois social equity criteria, navigating the Illinois dispensary license application process, and providing all necessary documentation to the Illinois Department of Financial & Professional Regulation, successful applicants can reap the benefits of owning an Illinois cannabis dispensary. Good luck!

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