On June 25, 2019, Illinois became the 11th state to make recreational cannabis legal. In the 2 years since recreational cannabis sales to adults aged 21 and above began, Illinois has become one of the top-selling cannabis states in the U.S.
Although medical cannabis dispensaries had a headstart in the race, having been allowed to function legally since 2014, Illinois is making impressive strides with the adult-use sector, with its 110 recreational use dispensaries hitting a record $1.38 billion in sales in 2021.
Can I open a dispensary in Illinois right now?
The answer to this question is: yes. Under Illinois’ Cannabis Regulation and Tax Act, cannabis businesses are allowed to acquire adult-use dispensing organization licenses to enable them to make legal sales to persons aged 21 years and older.
How do I open a cannabis dispensary in Illinois?
The Illinois Department of Financial and Professional Regulation (IDFPR) oversees the licensing and regulation of cannabis businesses. In order to open a cannabis dispensary in Illinois, you must fulfill a number of requirements which include the following:
- A dispensary security plan: Your business is expected to submit a detailed description of electronic facility access control and surveillance, physical security measures, employee emergency protocols and training, and cash/inventory management to communicate that you are prepared for the risks of operating a dispensary.
- A business plan: This will show how your dispensary will be managed and should include a description of your preferred POS system, your financial management plan, how you will maintain customer confidentiality, and your legal and administrative compliance strategy, among others.
- Proof of knowledge or experience in the cannabis field: Each principal officer is required to submit an anonymized resume detailing their qualifications and education that are relevant to running a dispensary.
- Application for an adult-use dispensing organization license or dispensary license: This license permits your dispensary to purchase cannabis from a cultivator or another dispensary for retail purposes. It requires a nonrefundable application fee of $30,000 and, once awarded, an annual renewal fee of $60,000.
What are the current cannabis laws in Illinois in 2022?
As of January 1, 2020, adults aged 21 and above who are residents of Illinois are allowed to purchase recreational cannabis from licensed retailers in Illinois. They can possess up to 30 grams of marijuana, up to 500 milligrams of THC in a marijuana-infused product, or up to 5 grams of marijuana concentrate.
Non-Illinois residents may possess up to half of what a resident can possess.
The sale of marijuana is limited to only licensed dispensaries.
Eligible patients, with a doctor’s recommendation, may legally consume medical marijuana. However, individual cultivation, even for medical use, is not permitted.
What type of cannabis retail license do I need to open a dispensary in Illinois?
To open a dispensary in Illinois, you need an Adult Use Dispensing Organization License or Dispensary License. However, to reduce the costs associated with opening a dispensary, the IDFPR will award a Conditional Adult Use Dispensing Organization License to successful applicants, which costs $5,000.
This license reserves the right to an Adult Use Dispensing Organization License but does not permit the recipient to begin purchasing or selling cannabis.
How do I get a cannabis dispensary license in Illinois?
Application forms for Adult Use Dispensing Organization Licenses are available on the IDFPR website. Successful applicants are then provided with Conditional Adult Use Dispensing Organization Licenses.
These give successful applicants 180 days to find a store location while new entrants are allowed in the market.
Once you have secured a location, passed an inspection, and paid the annual registration fee of $60,000, you will be awarded a full Adult Use Dispensing Organization License, and retail operations can begin.
The State of Illinois makes special provisions for Social Equity Applicants (SEAs). An SEA may be eligible for financial and technical assistance to obtain a license and start their cannabis business.
The criteria for becoming an SEA include one or more of the following:
- Has at least 51% ownership and control by one or more individuals who
- Have lived in a disproportionately impacted area in 5 of the past 10 years.
- Have been arrested for, convicted of, or adjudicated delinquent for cannabis-related offenses eligible for expungement.
- Have a parent, child, or spouse that has been arrested for, convicted of, or adjudicated delinquent for cannabis-related offenses eligible for expungement.
- Has more than 10 full-time employees, and more than half of those employees:
- Currently reside in a disproportionately impacted area.
- Have been arrested for, convicted of, or adjudicated delinquent for cannabis-related offenses eligible for expungement.
- Have a parent, child, or spouse that has been arrested for, convicted of, or adjudicated delinquent for cannabis-related offenses eligible for expungement.
How much does it cost to open a dispensary in Illinois?
Opening a dispensary in Illinois may cost you $75,000 to $180,000. A detailed breakdown of the costs of starting up a dispensary in Illinois will give you a look at real estate costs, business equipment and infrastructure costs, security costs, and operational costs.
How can you keep your dispensary compliant in Illinois?
Much like dispensary owners in other states, Illinois dispensary owners need good seed-to-sale software or a POS system that enables them to remain compliant.
Some of Illinois’ compliance requirements include the following:
- Cannabis retailers must establish an account with the state’s verification system that documents sales transactions, inventory, cannabis products acquisition, and disposal of cannabis every day.
- Cannabis retailers must have a real-time, web-based, and state-accessible inventory control and POS system.
- A dispensary must file an annual compilation report with the IDFPR, including a financial statement and any other requested documents.
What is the track and trace technology used in Illinois?
BioTrack is the official State of Illinois traceability program. It uses its tracking and reporting capabilities to assist Illinois state and local governments with enforcement of regulations, tax collections, product quality verification, and the prevention of illegal cannabis production, sale, and consumption.
If you want to learn more about opening a dispensary in Illinois, download our free guide below!
