Illinois pot dispensary licensees want OK to sell ownership shares | Government and politics
ROBERT McCOPPIN Chicago Tribune
CHICAGO – Caught in a Catch-22, recreational marijuana dispensary license holders are asking Illinois to change its policy and allow them to sell ownership shares to raise money to start their business .
Some 200 recreational license owners have signed a Chicago NORML petition asking for permission to sell stock in their companies.
But under the direction of the Illinois Department of Financial and Professional Regulation, licensees are prohibited from selling their preliminary “conditional” licenses until they are cleared to begin retail sales.
“Which is ridiculous, because the conditional phase is where you have to raise the most capital,” said Edie Moore, co-founder of Chicago NORML and conditional licensee. “There’s no reason not to. It’s not against the law and it hurts people.
The state law legalizing marijuana effective in 2020 aimed to promote greater minority participation in an industry that had only one African American, four Hispanics and 12 Asians with interests in 2021, compared to 209 owners whites.
This summer, the state issued 182 conditional dispensary licenses, all to social equity seekers, broadly defined as those with previous convictions for underage cannabis or from areas of high poverty or arrests for cannabis.
Conditional licensees cannot open their doors until they have passed background checks, obtained local site approval, passed an inspection and paid the license fee.
The apparent intent of the policy against the sale of conditional licenses was to prevent minorities and social equity licensees from selling themselves before they even began operations. But owners say this prevents them from using their greatest asset, the ownership shares of the license, and that they should have the same rights as business owners in other industries.
The law says nothing explicitly prohibiting the sale of conditional licenses.
But Christopher Slaby, spokesman for the agency that regulates dispensaries, issued the following statement: selling the conditional license, because a conditional license is not a dispensing body.
Sparky Rose, co-founder and managing partner of cannabis consultants Supercritical in Chicago, said the state’s policy is hurting people who have licenses likely worth $5 million but don’t. money to start their business.
“Why are they doing this? ” He asked. “It’s infuriating and crazy. We need to stop doing everything in our power to make social equity candidates fail.
Rep. La Shawn Ford, a Chicago Democrat who has led legislation to increase licensing, said he believes state regulators have the power to change that policy.
If they don’t, he said, lawmakers could change the law in the fall session. The General Assembly may also consider changes such as increasing the size limit for new artisanal cannabis cultivators and providing tax deductions for businesses, which are not allowed under federal law due to prohibition. Cannabis Federal.
“We need to follow the lead of the business world,” Ford said. “It’s what they say they need to be successful. If we can help them by changing the law, we should.
Licensees have also complained that the state will not allow them to enter into management services agreements, to have another entity with more resources run the business for them.
In response to requests from licensees, the Department of Financial and Professional Regulation on Wednesday changed its policy to allow management services under certain conditions.
A contract manager can manage day-to-day operations, hire contractors or other management functions, the agency ruled, but ownership and decision-making must remain with the conditional licensee.
Any such agreement is subject to regulatory approval. It can only be implemented during the conditional license period and must end once the store has obtained its final license to open its doors. Licensees again said the policy prevented them from using their capital to start their business and only protected existing large cannabis companies.