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Illinois Announces Changes to Social Equity Retail License Requirements

This month, Illinois regulators made several changes for social equity applicants hoping to get their hands on one of the state’s 55 new adult-use retail licenses. Among the significant changes are that license applicants would confront a much shorter application, related fees would be reduced from $2,500 to $250, and all winners will be chosen in a lottery, according to Crain’s Chicago Business.

The Illinois Department of Financial and Professional Regulation announced that it would begin collecting applications on January 30 after distributing them around 17 designated regions.

What’s New?

On January 1, 2018, Illinois launched its recreational cannabis program. Though this was a significant moment in the state’s history, it was not without its challenges. As an early adopter of marijuana legalization, Illinois had to adapt to a new regulatory system while educating consumers on what the new laws meant for them.

In February 2018, Governor Rauner signed significant changes to the previous legislation into law. One of these changes was eliminating specific requirements that applicants for social equity licenses had to meet to gain priority status for receiving an MJ business license. The previous legislation outlined several factors that would give candidates bonus points toward their application score. Living in a region disproportionately affected by low-level marijuana arrests or arrests for possession or distributing marijuana; or being arrested or convicted for possession or distribution of fewer than five grams of marijuana before August 1, 2016. However, these bonus points were eliminated and replaced with other provisions designed to encourage minority communities to participate in the industry.

The legislation also modified how many applications could be filed by each applicant and how many regions an applicant could apply in. Applicants can now only file one application and must choose one area they wish to operate in. 

Illinois Changes Retail License Requirements

On A Positive Note

The changes come on the heels of concerns that large capital groups were able to game the application process by attempting to gain multiple applications through shell companies or hiding ownership information. This lottery system will make such attempts more difficult, as winners will be chosen at random, and while it may take longer to award all licenses this way, it will likely mean the process is less likely to be skewed by outside influence.

These new rules appear to make it less likely that highly capitalized individuals and companies can attempt to game the licensing process by submitting large applications for an unlimited number of locations. The rules also seem to narrow down the pool of applicants so that only those with a genuine interest in providing social equity benefits can apply.

There are some positives about these changes. For one thing, the commission can now accept applications for fewer locations than before. This means that each licensee will receive more attention from the commission and have more customized assistance as they proceed with their project. It also means that there will be fewer social equity applicants overall and, therefore, less competition between them—this should also foster better relationships between these applicants and their communities as they work together towards similar goals.

positives about these changes

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