On Sept. 29th Higher Yields will be holding a Cannabis LIVE Symposium dealing with Government Outreach and Social Equity in your state or community. For more information or to register please visit this link.
“Need to Knows” About Illinois Craft Cultivation & Infuser Licensing
On January 1, 2020, the Land of Lincoln became the land of waiting in line. Consumers queued up in the cold to purchase their first taste of the state’s legal weed. Day One of the Illinois recreational cannabis rollout saw nearly $3.2 million in sales – a figure that might have been higher if most of the thirty-seven open shops had not sold out.
“Green Wednesday” was a mere harbinger of things to come. As newly minted licensees continue to open their doors, a brand new round of transportation, craft grower, and infuser licensing is afoot.
On February 14th, 2020, Illinois began accepting applications for a total of 40 craft grow and 40 infuser licenses due no later than March 16, 2020. Aspiring applicants should know this will be a highly technical process with more regulations to consider than in the dispensary round.
Learn how this process may challenge you and how to approach each step to maximize your chances of winning a license.
The Opportunity Is in the Details
Veteran applicants and newcomers alike will discover the devil is in the (many) details as they vie for craft and infuser licenses. When growing plants or producing concentrates and edibles, there is a slew of compliance standards to be met. You have to consider everything from food safety regulations to making sure your building doesn’t blow up.
To maximize your opportunity, be sure to fill in every section. For instance, both the craft and infuser license applications contain an optional Exhibit M: Applicant’s Plan to Engage With the Community. Pro tip: Don’t consider it optional.
In a point-based system of scoring, it’s imperative to take advantage of every point available. Just one or two points can be the tie-breaker, giving you the edge in a sea of applicants.
In the dispensary application round, 600 of 700 applicants included a social equity applicant on their applications. According to the regulations of the state, a social equity applicant is someone who owns 51% ownership and control of the business and who meets the social equity requirements outlined by the state.
Failing to include a social equity individual effectively became a disqualifier for the 100 who didn’t have one because they did not obtain the 50 points associated with that section.
However, while having a social equity applicant on your application is important, it’s equally important to not place a token individual on an application purely for the sake of meeting those criteria. The state wants to see that applicants are providing meaningful opportunities for social equity individuals.
Exhibit A: Property Matters for Infuser Licensing
In the application, Exhibit A is crucial for both craft and infuser licensing. Prior dispensary round applicants who decide to throw their hat into the craft grow or infuser licensing ring may be in for a surprise. Unlike round one, applicants are now required to have secured a property by the time of application.
Applicants must have a suitable location that’s been signed off on by a zoning administrator or other duly authorized individual. In fact, you must either own the property, be engaged in a lease, or have a “hold letter” documenting that the owner or landlord is holding the property for you until December 2021.
This section of the application needs to be airtight and is worth seventy-five points on each application.
Science + Environment + Safety
When it comes to the infusion and extraction plan, Illinois provides fewer guidelines than some states in the science area. Details like what solvents may be used are not delineated in the application itself, which means you must be able to able to demonstrate a high level of understanding of your craft while detailing your own high standards for compliance.
Additionally, some sections of your application that will be closely linked to your infusion and extraction plan will be building suitability, environmental plan, and employee training. Craft growers will also need to effectively demonstrate their plans while similarly connecting these dots throughout their application.
Product safety, labeling, and packaging are essential for both infusers and growers. Pay close attention to guidelines and demonstrate how you will be mindful of the regulations pertaining to minors. No one wants kids potentially playing with or consuming these products. Hint: No Daffy Duck or anime on your labels.
Exhibit C: Security & Record-Keeping
The security and record-keeping plans are combined in this round into a single 65-page exhibit. Record keeping is as important in this round as it was in the dispensary application even though it’s been rolled in with the security section.
In your application, there should be a strong focus on your plan for keeping your records safe and secure. Robust plans to prevent cannabis theft and diversion and maintain inventory tracking are also required in this section.
Additionally, transportation plans fall under Exhibit C, which states that the “applicant must also provide its plan to apply for a Transporter license or plan to work with a licensed Transporter and the procedures for safely and securely delivering cannabis-infused products to cannabis business establishments.” Don’t leave this part out.
It’s worth noting that transportation licenses are up to be awarded in this round. If you have questions about whether you should be going for one of these licenses, too, ask us.
Going the Vertically-Integrated Route?
Those interested in a vertically integrated business model may be eyeing licenses in each of these new sectors. To align these operations could poise entrepreneurs and investors for a multi-state operation.
In the meantime, Illinois has no shortage of consumers. A study published on state Senator Stean’s website indicates there are 945,640 resident cannabis consumers in the state with a potential visitor consumer base of 10,830,000. We’re talking about a green wave in a highly populated state.
Another sizable wave is the trend toward edibles, which could infuse this round of applicants with extra enthusiasm.
Prepare to Compete at a Higher Level
It remains to be seen, but given the level of work involved to meet more numerous and sophisticated requirements, the craft grow and infusing round could see fewer applicants than the dispensaries round. That could prove a good thing for those ready to compete at a higher level.
To be prepared, you must read the extensive regulations and emergency rules and get to know them. In Illinois, every round of applications is building from a framework of regulatory compliance – and there’s a lot of homework required.
When you’re investing your resources, you want to be positive you’re doing everything correctly to maximize your opportunity. Feel free to reach out to us at Higher Yields Cannabis Consulting for a free consultation. We know these regs inside and out and can help inform your application every step of the way.
Want more free information to help you through all the craft grower and infuser licensing hurdles? Check out our Illinois Cannabis Licensing Webinar and sign up for a follow-up Q&A session to get all your questions answered.