Photo by Scott Graham
Governor J.B Pritzker’s office announced the issuance of 200 new licenses for craft growers, product manufacturers, and distributors that were originally to be issued last year, according to Capitol News Illinois. The report stated that 67% of the new licenses will go to people of color, helping fulfill part of the social equity program first proposed in the state’s adult-use legalization measure, which was passed into law in 2019.
Additionally, Pritzker signed into law Illinois House Bill 1443, which establishes three lotteries for retailer licenses. The first is essentially a do-over of one conducted last year, the 75 retailer licenses from which were never issued due to litigation over the license-scoring process. Two additional lotteries will award 55 retailer licenses each. Lotteries for new retailer licenses are scheduled to be held July 29, August 5, and August 19, 2021.
However, GrownIn reports that, following closely on the heels of Pritzker’s announcement of a new slate of cannabis license lotteries, a lawsuit has been filed by Michigan-based cannabis company Sozo Health. The company contends the new bill is in violation of the interstate commerce clause of the U.S. constitution. Sozo Health is also seeking a temporary restraining order to stop the first of three scheduled lotteries slated for July 29, 2021. Sozo Health cites the striking down of similar provisions in the states of Michigan and Maine as precedent for their actions.
As we have discussed previously, there are roughly 75 adult-use retailers operating currently in Illinois, supplied by 18 companies that were initially licensed to serve the state’s medical cannabis program. The eventual opening of 185 new retailers should provide a significant boost in sales, as more convenient access to the legal market typically translates into a greater share of total cannabis demand captured by licensed businesses.
More production-side businesses will add additional supply and competition to the market as well, but the “craft grower” licensees will not be permitted to produce at anywhere near the scale of the current licensed cultivators. As a result, this new slate of licenses could result in demand further outstripping supply in Illinois.