Dispensary License in Illinois
What is a Cannabis Dispensing Organization?
A “Dispensing Organization” is a facility operated by an organization or business that is licensed by the department of Financial and Professional Regulation to acquire cannabis from a cultivation center, craft grower, processing organization, or another dispensary for the purpose of selling or dispending cannabis, cannabis-infused products, cannabis seeds, paraphernalia, or related supplies to purchasers or qualified medical cannabis patients and caregivers.
You cannot dispense cannabis or cannabis products to purchasers in Illinois without a license.
How Can I Get a Dispensary License in Illinois?
The Department of Financial and Professional Regulation shall issue up to 75 dispensary licenses before May 1, 2020. Applications can be submitted up until January 1, 2020, and Wolfe Miglio’s cannabis attorneys can assist you in filing for your dispensary license in Illinois. A dispensary license allows the holder to own and operate a dispensary organization and to dispense cannabis and cannabis products to adults in Illinois.
What Does the Application Process for a Dispensary License in Illinois Require?
The cannabis lawyers at Wolfe Miglio will help you through the entire application process for a Dispensary License in Illinois, which must include the following:
- A non-refundable $5,000 application fee which shall be deposited into the cannabis regulation fund. This means that if you apply and do not receive a license, this $5,000 will not be returned to you. This fee is a barrier to entry meant to ward off non-serious applicants;
- Certification that the applicant will comply with all applicable regulations and provisions of Illinois cannabis legislation;
- Legal name of the proposed cannabis dispensing organization;
- A statement that the proposed dispensing organization agrees to respond to requests for additional information from the Department of Financial and Professional Regulation;
- Statements from each principal officer as to whether each person has held or currently holds an ownership interest in a cannabis business establishment in Illinois or an ownership interest in a cannabis business in another state that had its license or registration compromised, in any way, by means of disciplinary action;
- Disclosure of whether any principal officer has ever filed for bankruptcy or defaulted on spousal support or child support obligations;
- A resume for each principal officer including all academic degrees, relevant certifications, and relevant experience with cannabis businesses or related industries;
- A drafted plan for training and education that will be provided to dispensing organization agents and employees;
- Proposed operating bylaws;
- A business plan that complies with Illinois cannabis legislation including, at minimum, descriptions of the following:
- Services to be offered; and
- The process of dispensing cannabis;
- A security plan for the organization including descriptions of the following:
- Protocols to monitor and secure the dispensary to prevent loss and theft; and
- Process to ensure restricted access to important areas to agents, professionals, inspectors, and security personnel;
- A compliant inventory control plan;
- A proposed floor plan, including an estimation of square footage and outline of security devices such as cameras, servers, motion detectors, alarm services providers, and data storage capabilities;
- Additional personal information on each principal officer;
- Evidence of applicant’s status as a social equity application, if applicable, and whether a social equity applicant plans to apply for a loan or grant issued by the Department of Commerce and Economic Opportunity;
- Location and contact information of the applications principal place of business, if applicable;
- Information regarding involvement in non-profits (it is recommended that you do not apply without first making a commitment to non-profits in Illinois);
- Plans for community engagement;
- Procedures to ensure correct record keeping;
- Estimated volume of cannabis to be stored at the dispensary;
- Description of features that will provide accessibility under the ADA (Americans with Disabilities Act)’
- Description of air treatment systems to reduce odor;
- Reasonable assurance that issuance of a license will not have a detrimental impact on the community of the proposed location;
- Description of the enclosed and locked facility where Cannabis will be stored by the Dispensing Organization;
- Diversity plan, including a 2,500-word narrative that establishes a goal for diversity in all levels of employment;
- A contract with a private security contractor.
All of an applicant's proposals, plans and protocols become a condition of the cannabis dispensary license if an applicant is awarded with a cannabis dispensary license. As a result, applicants must be careful to be realistic and not overpromise during their application period, or they may find themselves stripped of their license in due time.
How is Illinois Scoring and Comparing Applicants for a Dispensary License in Illinois?
- Points system & scoring
- There is a geographic distribution of licenses which has been predetermined by the Illinois legislature. This means that certain areas of Illinois will be able to receive more licenses than others. For instance, the Chicago-Naperville-Elgin area is eligible for a total of 47 cannabis dispensary licenses, while St. Louis is only eligible for 4 cannabis dispensary licenses.
- Scoring is done on a scale that ranges from 0 to 250, points are awarded according to the following metric:
- 15 pts – Suitability of Employee Training Plan
- 65 pts – Security and Recordkeeping
- 65 pts – Business Plan, Financials, Operating, & Floor Plan
- 30 pts – Knowledge and Experience
- 50 pts – Status as a Social Equity Applicant
- 5 pts – Labor and Employment Practices
- 5 pts – Environmental Plan
- 5 pts – Illinois Owner
- 5 pts – Status as a Veteran
- 5 pts – Diversity Plan
- 2 pts (Bonus) – Community Engagement Plan
- The more points you are able to accumulate, the more likely you are to receive one of these very coveted licenses. The better your application in each category, the more points your application will receive.
- The cannabis lawyers in our Illinois office can help you to maximize the chances of success for your application.
- If you receive a license, you have 6 months (180 days) to identify a location for the dispensing organization, this timeline may be extended an additional 180 days at the discretion of the Department of financial and professional regulation. This location shall be inspected by the Department of financial and professional Regulation prior to the issuance of a license
- Potential Pitfalls & consequences of violations
- If you don’t begin operations within 1-year of receiving your license, it will be revoked
- If your application would result in any one person or entity having direct or indirect interest in more than 10 adult use dispensing organization licenses, your application will be denied.
- If you fail to uphold the plans that you set out for yourself, your license can be revoked or suspended.
- Minor violations may result in hefty fines of up to $20,000 levied against the holder of the dispensary license, so be meticulous in your operation to avoid these penalties.
Some Useful Tips to Help You Apply for your Cannabis Dispensary License:
- Make sure that your location isn’t within 1,500 feet of an existing dispensary.
- The Department of Financial and Professional Regulation will conduct a background check of organization agents and principals. The background check will be at the applicant’s expense.
- Know your officers and board members. If anyone with more than a 5% interest in the organization is delinquent in filing tax returns or paying amounts owed to the State of Illinois, the license application will be denied.
- If you get a license, the information and plans that you set out for yourself become A CONDITION OF YOUR LICENSE! Make sure that you are able to comply with the plans you set out for yourself.
- Implement a plan for diverse flower sourcing! No more than 40% of a dispensaries inventory can come from any one cultivation center.
- No drive-through windows or cannabis vending machines are allowed, so don’t plan for them.
- Plan to educate your employees on bookkeeping, safety, theft prevention, and best-practices. Invest time into your employees to avoid fines and operational errors.
- Make plans for individual product identification and pricing.