The Illinois Dispensary Awards: Surviving the Implosion

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Just last summer, Illinois looked poised to be a model of social equity and economic justice within the budding world of state-legal cannabis. Across the country, the licensing regime outlined in the Illinois legalization bill was hailed as a victory for the underclass.

However, a much different picture unfolds before us today. Where the public once expected transparency and integrity, there is now alleged scandal and litigation.

The Illinois Dispensary Awards: Surviving the Implosion

What began as a slight stumble out of the gate in the dispensary awards process has now erupted into a full-blown, red-tape disaster, strangling the life out of aspiring cannabusinesses throughout Illinois.

If you’re one of these frustrated cannabusinesses, we can show you a way out. But first, let’s look at how the situation unfolded.

A Brief History of the Dispensary Awards Debacle

In June 2019, Illinois governor J.B. Pritzker signed the bill legalizing cannabis for recreational use. Within the language of that bill were provisions to help marginalized and lower-income communities have a stake in the nascent market. The intention of the provisions was in part to push back against the lack of minority representation in the existing market and in part to right at least a few of the wrongs inflicted by nearly 90 years of prohibition.

On January 1, 2020, recreational sales officially began, with the preexisting medical dispensaries handling the first wave of demand. Meanwhile, January 2 was the application deadline for people hoping to open new dispensaries.

The first hiccup came in the form of a massive delay. Months passed with no word of who made the cut or even when the dispensary awards would be announced. Like everything in 2020, the delay was officially blamed on the pandemic, though the explanation seems tenuous at best.

When the announcements did finally come, the problems only multiplied. Of the more than 700 applicants, who in total submitted over 4,500 applications, only 21 were selected to take part in the lottery for the 75 available licenses. Exacerbating the situation further, several of the winning applicants are now suspected of overstating their share of minority ownership to take advantage of the social equity provisions.

A class-action lawsuit was filed, citing unfair treatment and possible corruption. Governor Pritzker initially pushed back and defended the system but eventually succumbed to pressure. In September, he issued an executive order to rectify the situation.

Under his new directive, those who didn’t receive a perfect score (required to be entered into the license lottery) will be given notice of deficiency in their application, along with a score sheet that shows them what needs to be adjusted.

Not surprisingly, those applicants who were successful are now filing a lawsuit of their own to protect their winnings, claiming that Pritzker’s order violates the law. If there was ever a situation that better merited the metaphorical designation of “quagmire,” we’d be hard-pressed to name it.

What to Do If the Dispensary Awards Left You Empty-Handed

We’ll address ideas for what to do momentarily. First, let’s go over a few things you shouldn’t do.

  • Don’t Panic. All is not lost, as we’ll soon illustrate.
  • Don’t let this get in the way of achieving your goals. To maintain your trajectory, you need to maintain momentum — and that means not leaving your investment needlessly tied up in a stagnant situation.
  • Don’t let this debacle sour you to the industry. It’s an ever-shifting, topsy-turvy landscape, but the potential is still virtually limitless.
  • Don’t be too proud to ask for help. 

Now, let’s talk about what you should do. Likely, it’s time to pivot to a state with a more accommodating landscape, one where the process of handling dispensary awards will be executed with efficiency and transparency. It’s not as foreboding an idea as it sounds. In fact, with the proper nuance, it can be a mere sidestep in your overall game plan.

The Illinois Dispensary Awards: Surviving the Implosion

By putting our accumulated knowledge and experience to work for you, the team of industry experts here at Higher Yields can help you take a big picture approach and navigate the unforeseen with confidence.

Finding Stable Ground

Just to touch on one of our many success stories, we recently brought on a client who’d had their sights set on a state market with lower barriers for entry. The logic, when grossly oversimplified, was that low entry costs would mean a speedier licensing process and quicker profits.

To any average player, their plan of action was practically foolproof. But we could see what others couldn’t. While this client was correct that the licensing process was a safer bet, they didn’t take into account the state’s overburdened regulatory scheme, nor did they consider its grossly oversaturated marketplace. Unbeknownst to them, they were walking into a money pit.

Thankfully, with our guidance, this client was able to make the necessary pivot and deftly avoid disaster. Through our in-depth analysis of the various state markets — in which we sized up the competition, ROI, license availability, and long-term viability — we were able to find a regime that aligned much more closely with their strengths as well as their overarching goals.

If you’re an aspiring cannabis entrepreneur stumbling over the unseen pitfalls that litter your road to success, remember that you don’t have to go it alone. We’re only a phone call or email away. Reach out today to set up a consultation and let us show you how we can help.

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