Illinois Cannabis Giants Look to Stifle Competition

It’s the age-old story: in the marijuana space, Big Cannabis is still trying to keep the biggest pieces of the pie and doesn’t want to share with smaller craft growers. In the state of Illinois, this has been dragged front and center in the case of Bill SB3105

The bill would allow craft growers in the state to increase their canopy size from 5,000 square feet to 14,000 square feet–an increase that would allow smaller operations to become more attractive to investors and secure their place in the industry.

However, large cannabis organizations, like the Cannabis Business Association of Illinois, formally resolved to oppose the bill at a board meeting last week.

Here is the lowdown on what you need to know about the current state of this crucial legislation.

Craft Cannabis In Illinois

In Illinois, many craft grower licensees–most of which are people of color–believe it is necessary to pass this legislation allowing them to increase their canopy size, because the marginal cost of operation for smaller-scale operations is too high to attract investment. Craft grow licenses were issued in August of last year, and many companies are currently setting up their facilities and gathering capital.

The fact that state law requires craft grow licenses to be operational by July, or the state may withdraw their license, adds to their fears.

Time is ticking, and in order for craft grower licensees to succeed and secure the capital they need to get up and running, Bill SB3105 needs to be seriously considered. As Eric Ice-Gibson, owner of the craft grow operation The 1937 Group says: “When we talk to investors, people look at the 5,000 square feet, and it is impossible to make those numbers work at 5,000. At 14,000, things look a lot better.” 

RELATED READING: Diversity and Equity Still Being Stifled By Limited License Markets

Cannabis Giants Fear Fair Competition

The opposition from Big Cannabis has been fierce. The state’s largest cannabis trade association, which includes several multistate operators, is fighting the proposed legislation that would allow social equity-owned craft cultivators to expand their canopy size and compete more effectively.

MSOs including Illinois-based Cresco Labs, PharmaCann, and Verano Holdings lead the Cannabis Business Association of Illinois.

Illinois “should pause to properly assess where our industry stands rather than attempt to make incremental changes to an evolving industry”, according to the trade association, in a written statement.

However, the group stated that it will continue to support industry inclusion and diversity. It is unclear how they can reconcile their ostensibly pro-equity attitude with their current opposition to measures that would benefit minority-owned businesses.

The only reason to oppose such a critical piece of legislation is that the largest cannabis operators in the state (and the world) seem to believe that smaller equity-owned craft operators will outperform them–if they play on a level playing field.

Where Bill SB3105 Stands Now

The current Illinois legislative session is winding down, as are the possibilities of a craft grow canopy extension. The deadline for legislation to pass out of committee was the end of February, and SB3105 did not make it.

Cannabis lobbyist John Daley said, “Anything moving from this point on, now that deadlines have gone, will likely need the support of leadership to be moved after the deadlines, and before April 31 (the end of session)”.  One option is for House or Senate leadership to include the craft grow canopy extension in another law that is already expected to pass, but given the state’s cannabis industry’s disagreement, this is a risky move.

Mega cannabis giants are fighting a legal reform that would give social equity craft growers a chance to compete. It’s all about competition, and Big Cannabis has had none for years, and they’re fighting tooth and nail to keep it that way. If smaller grower licensees had a chance at a more equal market share, their offerings–more diverse, unique, and niche products–would truly compete with MSOs. 

Want to keep your finger on the pulse of what’s happening in the cannabis space? Head over to the Beard Bros website to read more.

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