Advocates are concerned that the state has not yet set up a funding program meant to make it easier for those with marijuana-related arrests on their records to start businesses in the industry. The application process for 75 new dispensaries opens Oct. 1, and time is running out, they say.
The applications will be the first path into the industry for entrepreneurs who don’t already operate a marijuana facility, and those applicants could face stumbling blocks if there isn’t clarity on the promised financial aid.
“People are ... working on their plans, they’re working on their locations, they’re working on what they can work on, but they don’t know how much money they have to spend,” said Edie Moore, executive director of Chicago NORML, a marijuana reform nonprofit that has been working with people preparing to apply for licenses.
The state’s Department of Commerce and Economic Opportunity is charged with establishing the grant and loan program. Spokeswoman Charity Greene said it will issue details on the program, including loan and grant sizes, by the time it the state begins accepting applications.
Some are concerned that might not be soon enough.
Several groups that have advocated for equitable marijuana legalization sent a letter on Wednesday to Gov. J.B. Pritzker and other state officials asking for clarity on how several aspects of the new law will be implemented. The letter, obtained by the Tribune, asks for a meeting to discuss the group’s questions before Oct. 1.
Among other questions, the letter asks how a social equity applicant will apply for the money, and how the loans and grants can be used to assist with application expenditures.
Greene said only individuals who are awarded licenses for new dispensaries can apply for the loans and grants. Applications are due Jan. 1 and licenses will be awarded by May 1. She also encouraged grant and loan applicants to explore other support services, such as help with business plan development, that are available to them.
“People shouldn’t feel pressured to turn around and turn in their applications as quickly as possible,” Greene said. “We want them to take advantage of all the different support services we will be making available.”
Most banks do not work with cannabis companies, so operators often must come up with the capital to start a business themselves.
The state’s grant and loan program could help ensure everyone has an equal chance to establish a business in the industry, but applicants need to know what that process entails, said cannabis entrepreneur Jamil Taylor.
“People of color are going to be left out of the next wave if they can’t receive the proper grants to apply,” Taylor said.
The Woodlawn resident plans to apply for several licenses, though he does not intend to use the grant and loan program. He has advocated for social equity in the cannabis industry, and is concerned that the current operators’ head start puts minority entrepreneurs at a disadvantage.
The medical dispensaries already in operation will be given the first shot at the industry. They can apply to sell recreational marijuana from their current locations starting Jan. 1, and each can apply to open a second store.
Lawmakers have said established companies get a head start in part because the state has vetted them, and they can get the program started sooner since they are already operational.
Illinois was the first state to legalize the sale and use of recreational marijuana through legislation. Many have praised the law for its social equity components, which include reduced application fees and the grants and loans for those affected by the war on drugs, with some of that money coming from the existing cannabis companies.
The state did well to craft the social equity provisions into the law, said Seke Ballard, founder and CEO of Good Tree Capital, a black-owned business that provides financing to cannabis companies. But figuring out the loan and grant program in time for the application process is urgent.
“If we don’t get the execution phase of the bill right ... it undermines the whole possibility that we have equality and access,” he said.
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