How to Open a Dispensary in Illinois
With the legalization of recreational marijuana in Illinois, it is natural for entrepreneurs to consider opening a dispensary. Opening a dispensary has all of the same challenges as opening any other business, plus several unique obstacles regarding licensing and permits. Make sure that you follow all of the laws when opening your dispensary and keep general business advice in mind.
Understand Permits and Licensing
Before you can even start to consider opening a dispensary in Illinois, make sure you are aware of the permits and licensing, as well as how competitive the permitting and licensing process is likely to be. By 2025, Illinois will approve up to 390 cannabis licenses for adult-use, a figure which does not include the 110 licenses for medical cannabis dispensaries.
The first batch will include 75 conditional adult-use licenses to be issued by May 1, 2020. Applications have already begun, and the top-scoring applicants will get the license. Illinois also divided up these 75 conditional permits by region, with the number of licenses to be given in each area determined by population. In addition to those 75 licenses, there will be another up to 110 licenses approved by December 21, 2021.
Because of the limited number of licenses that Illinois is awarding, and the limited number for specific areas of the state, competition is likely to be high, especially in areas with lower populations.
The scoring system to get a license is based on many factors, including record-keeping, security, business plan, operations plan, financials, floor plan, human resources training plan, diversity plan, cannabis-related experience and knowledge, and labor and employment practices.
Getting Your Cannabis Retail License
Be prepared to jump through several hoops and pay some high fees to get your Cannabis Retail License, which you will need to open a legal dispensary in Illinois. You will get the license from the Illinois Department of Financial and Professional Regulation. You will need to pass a background check, release your full past tax returns, and disclose any defaults on student loans, child support or alimony, as well as any past bankruptcies.
The application for a conditional adult-use dispensing license is $5,000. If you are approved, you have to pay $30,000 for the first annual permit. The future yearly renewals will also cost $30,000, and you must prove that you have enough capitalization or $50,000 in escrow. There is also a $25,000 dispensary registration renewal fee and $50 fees for replacing each identification card, registration, and renewing dispensing agent.
You Will Need a Solid Business Plan
Because of the strict requirements to get the appropriate licensing for an Illinois dispensary, you must have a solid business plan in place before you complete your application. At the minimum, the business plan should include the product or service description, market research, analysis of competitors, financials, and a leadership team.
Choosing a Location
For the best results, you want to choose the location for your dispensary carefully. After approval of your license, you must select a site within six months. It must be accessible, be able to facilitate safe cannabis dispensation, and not be within 1,000 feet of another dispensary, a place of worship, a residential zone, or a school. Of course, you also want to make sure you choose a stable location from a business perspective, where your clients can find you, and you will have potential clients nearby.
Remember that Illinois law requires that you get your cannabis from multiple cultivars. No supplier can account for more than 40 percent of your inventory.