Illinois Social Equity Cannabis Program: Marijuana Licensing 101
By: Alex Ion Attorney, Cannabis & Healthcare Consultant Published on October 22, 2019
Illinois has allotted 20% of the total point structure for the license application of recreational cannabis businesses to social equity applicants. More specifically, out of the total 250 points, 50 points are designated for applicants that qualify as “social equity applicants.” This relatively large allocation is perhaps the most progressive social equity program of the 11 states that currently have a recreational cannabis licensing program, but this program’s implementation has been problematic.
Under the Cannabis Regulation and Tax Act of Illinois (410 ILCS 705), to qualify as a Social Equity Applicant an Illinois resident must meet one of the following criteria: “an applicant with at least 51% ownership and control by one or more individuals who have resided for at least 5 of the preceding 10 years in a Disproportionately Impacted Area; (2) an applicant with at least 51% ownership and control by one or more individuals who: (i) have been arrested for, convicted of, or adjudicated delinquent for any offense that is eligible for expungement under this Act; or (ii) is a member of an impacted family; (3) for applicants with a minimum of 10 full-time employees, an applicant with at least 51% of current employees who: (i) currently reside in a Disproportionately Impacted Area; or (ii) have been arrested for, convicted of, or adjudicated delinquent for any offense that is eligible for expungement under this Act or member of an impacted family.”
It is important to note, that unlike other federal and state social equity programs, this program does not explicitly provide for race-based incentives. Rather, a large portion of the legislation creating the social equity program is dedicated to the expungement of minor crimes involving cannabis. This aspect of the legislation is unique among the current state recreational cannabis regimes. The rationale behind this regulatory framework is to counteract any perceived social injustices that have plagued certain geographic and racial communities within Illinois. In theory, the legislation is meant to give back to individuals harmed by the war on drugs by expunging certain records tied to the illegal use, possession, and delivery of cannabis.
Illinois has also granted this same class of individuals, increased access to licenses by providing lower application fees, and a heightened chance of success on those applications by ensuring 20% of the points are awarded simply by virtue of meeting the definition of a Social Equity Applicant.
While many cannabis industry experts have declared Illinois’ social equity program an example for other states to follow, others believe the law does not go far enough. Currently, there are eleven active cannabis licenses issued by the City of Chicago to current operators of cannabis businesses. The Chicago City Council’s Black Caucus has noted that none of eleven licenses that have been issued are African American owned. Additionally, in an effort to give African American business owners a better chance to bid on dispensary licenses, the City Council’s Black Caucus has called for a new ordinance that would postpone the sale of recreational cannabis for another six months, until July, 2020.
For additional information regarding what is required to achieve Social Equity Applicant status under the Illinois Recreational Cannabis Program, or for general questions about applying for an Illinois dispensary license, please contact the attorneys at Ion Law. Ion Law’s attorneys are experienced with licensing, zoning rules, and additional regulations currently imposed by the City of Chicago, as well as those codified in recent Illinois cannabis-related legislation. The complex web of competing state and local regulations necessitates professional guidance. Call or email Ion Law to learn more.