If you are thinking about applying for an Illinois cannabis license, you are in the right place. I have helped a number of businesses with the application process for adult-use cannabis in the great state of Illinois.
As many of you know by now, January 1, 2020, was the first day of adult-use cannabis retail sales in Illinois. The sales numbers were staggering, no surprise there, and Illinois is just getting started.
The stores which are open now, effective January 1, were themselves fast-tracked as they were previously and currently medical marijuana stores and much like Colorado, they flipped a switch on 35 medical outlets and began the sale of “recreational cannabis”.
I despise the term “recreational” as it pertains to legal cannabis, but that’s a story for another day. Now, here is a quick summary of the work I’ve been doing recently with three different businesses in Illinois.
If this is a path you are interested in following, there are a few things you should consider. I’ll outline them below. If after reading these considerations you are still set on venturing into this complicated industry, let’s chat.
What you need to consider before applying for an Illinois cannabis license
As it currently stands, the window for adult-use cannabis applications in Illinois is open. Many early applicants have already filed all their paperwork, so you may be a bit behind the curve. But it is not too late, as the winners won’t be released until May of this year. Before you start filling out your application, consider these points:
Do you qualify for Illinois’ cannabis social equity program?
The cannabis industry has a bit of an ugly past when it comes to how people who possessed or consumed the plant were treated. Specifically, communities of color were disproportionately affected by the war on drugs.
Because of this, the state of Illinois is doing their part to right previous wrongs with their social equity program. 20% of available points are based on social equity status! Here are the qualifications:
- 51% of owners must live or have lived in a disproportionately affected area.
- 51% of owners must have an expugnable cannabis offense
- At least 10 employees must satisfy the previous two qualifications
If you are entering this industry, it’s on you to do your part to create opportunities for families, communities, and regions that were harmed by the war on drugs. But, if you or your team were affected negatively, you may have a leg up on the competition.
Can you get financing for your dispensary?
One of the toughest parts about starting a retail cannabis storefront is finding financing. We have an entire article talking about ways to acquire banking for your cannabis business.
If you don’t have access to startup funds, or even a way to store your cash and pay your bills, you shouldn’t consider applying for an Illinois cannabis license. You can reach out to me, Rob, if this is a particular area of your business plan you are struggling with, as I went through this myself.
Do you have any experience in the cannabis or retail industry?
Illinois is going to choose applicants that have the best chance of success. So, if you have any experience in the cannabis industry, or even with a successful retail business in general, that is going to go a long ways.
If you don’t have any experience, don’t worry. I was the exact opposite of the type of person that you would think would want to open an adult-use cannabis store, yet here I am, more than 5 years later.
It won’t make or break your success, as long as you check the last box of our considerations – passion.
Do you have passion to start a cannabis business?
At the end of the day, this will be one of your most trying, difficult ventures yet. This industry is still figuring itself out, and it won’t be easy.
Your “why” for getting into this industry needs to be big enough to help you get through the tough days. Because they will come.
But if you have true passion for helping people in your community, then you should definitely apply for an Illinois cannabis license.
Now, here is some of the work I’ve done in Illinois.
CCN Lends A Helping Hand To 3 Retail Cannabis Applicants In Illinois
The deadline for new applicants in the newly formed adult-use cannabis system was January 2, 2020. I had the great fortune to work alongside three (3) clients all vying for one of 75 new licenses to be decided upon by the State of Illinois sometime in May of this year.
In two (2) of these situations, I applied as a Principal Officer. This was an honor to be sure but it came with an enormous amount of responsibility and, given our lawsuit crazy society we currently live in, an extra measure of exposure as well. It means I am applying along with the applicants/owners themselves.
I have no ownership in said companies nor will I have any fiduciary rights or responsibilities but nevertheless, the real applicants are trying to present the most appealing package possible to the State of Illinois.
By having an individual thoroughly experienced in the world of legal retail cannabis operation, they are saying to the state in effect, “we are endeavoring to do the right thing”.
If these two applicants are fortunate enough to be chosen, then contractually I have insisted on being named as Compliance Officer in the companies going forward.
This is necessary in my view to protect myself and my company, Cannabis Consulting Nationwide. If they follow my counsel and heed my advice in the never-ending effort(s) to stay compliant, then I will stay on as their Compliance Officer.
If not, I have an exit strategy to legally extricate myself from a situation I am uncomfortable with moving ahead with and being a part of.
I also was asked by the above-referenced applicants to help by reviewing and in a few cases, actually writing elements of the application, known as Exhibits.
The range and scope of information and plans the State of Illinois was inquiring about was amazing. I felt I was a tremendous help in the tone as well as the content of the required writings contained with the many exhibits, all required elements of the entire application.
In the third application, I was not asked to be a Principal Officer applicant, but I was much more involved in the writing(s) required as part of the application. I wrote in their entirety or very nearly all of the following Exhibits:
- Floor Plan
- Community Engagement
- Diversity Plan
- Operating Plan
- Business Plan
I contributed in other areas pf the application but the above were my purview and frankly, they were right in my “wheelhouse”.
Are You Thinking About Applying For A Retail Cannabis License In Your State?
If you are applying in your state to garner a license to retail cannabis, please contact a qualified consultant to help. I have been licensed and open and operating in Washington State since August 2014.
I have been successful and very proudly, infraction and violation-free. I have the boots on the ground, relevant experience many states are looking for when applying for cannabis retail licenses.
There is much value being placed on the presence of experienced cannabis operators, operators that is who have been in operating in a legal, compliance-driven regulatory framework.
There are very few individuals in the entire US who can claim the length of legal, violation-free operation in the heavily regulated retail cannabis industry that I possess and present via CCN.
So, do not be fooled, and do not rush to hire someone for the sheer sake of having experience in your corner. Hire someone who can help you in a real sense. Vet any cannabis consultant you encounter thoroughly.
My clients will attest to the fact I am a roll your sleeves up kinda guy who is the real deal and knows the ins and outs, the good and bad, the ups and downs of this still controversial and misunderstood business world that is legal cannabis.
If you want someone with actual, useable experience on your side to help you obtain a retail cannabis license or any phase of starting your own cannabis business, reach out to me here.
Good luck to you all. Happy New Year!
Rob Hendrix, owner
Cannabis Central of Ellensburg
Cannabis Consulting Nationwide
Many entrepreneurs are wondering how to start a cannabis business, as this industry reminds some of the gold rush with everyone rushing to claim a stake.
But starting a successful cannabis business is not for everyone. Once you start to peel back the layers of the industry, you’ll have a better understanding of what you’re up against.
I say this not to scare you away but rather to help you manage your expectations. This can be a very rewarding pathway for the right person, but again, the legal cannabis business is not for the faint of heart!
Let’s get started.
What you need to know about getting into the cannabis industry
If you are wondering how to get into the cannabis industry, don’t worry, we will get there, but first its really important that you manage your expectations.
Prepare for an invasive vetting process
If you are hoping to open a retail cannabis store, or any other licensed cannabis business, you are going to need to prepare for an invasive process.
One of the first steps in the vetting process will be a background check.
In Washington State, we had to undergo two (2) separate background checks; our own Washington State Patrol and one administered by the FBI. There will likely be a “points system” of sorts, but this varies State by State.
So while you don’t have to be a Boy or a Girl Scout, you’ll have to be pretty darned squeaky clean. And, anyone who may have a financial interest in the business will be subjected to these background checks. This includes spouses.
The cannabis industry is unlike any other
Because you are operating a business that is illegal at the Federal level, you will run into issues with taxes, insurance, banking, mortgages, lease agreements, and more.
Many times these “issues” will feel unfair. After all, it’s legal in your state, right? Unfortunately it is not that simple, and in fact, very few things in this business are uncomplicated. You’ll face roadblocks, impediments, and bumps in the road that “normal” businesses wouldn’t.
Expect the unexpected
You’ll also need to expect the unexpected. This is still a relatively new industry, and things are constantly changing around us. Even in an established, relatively mature industry like Washington State, I need to be nimble and ready for almost anything at a moments notice.
If you are in a State just entering the legal cannabis industry, hang on tight while things shake out! You’ll want to be wary, especially if your state has just legalized adult-use cannabis in particular.
It could be a bumpy ride for a variety of reasons. Plan for the regulatory “goal posts” to be moved somewhat in the opening months with changes in rules, regulations, requirements, etc.
As the proud owner of a licensed cannabis retail store in Ellensburg, Washington for the past five years, I am here to tell you it is possible. If you are still reading, it means I haven’t scared you off, which is a great sign! Now, let’s dig just a bit deeper as to how to get into the cannabis industry.
The definitive guide on how to start a cannabis business
Just like any business, starting a successful cannabis business requires real work. You need a strong “why” to remind yourself of during the darker times.
If you have a strong purpose, good organization in the form of a business plan, and the right guidance, you can be very successful. Here are some recommendations on how to begin.
Do your research
This might be the most important step of all. We touched on it at the beginning of this article, but you need to be aware of what you’re up against. You can start by learning about cannabis in general, along with the history of the industry.
On a more specific level, you need to have a deep understanding of the regulations in your respective state. Starting a cannabis business will involve many of the same steps across state lines, but there will likely be intricacies in your state. You’ll need to be totally familiar and comfortable with these details. These include eligibility, how to start the application process, whether you will take the medical or adult-use route, and more.
Get familiar with which government entity is going to regulate cannabis in your State. In Washington, the Liquor Control Board (LCB) was selected to regulate cannabis. Knowing who you are going to be dealing with is very important.
Write your business plan
Next, you’ll need a business plan. This is not just for your sake, but for the application process. Most states require a business plan to even begin the application process, and it will need to be very detailed.
Make sure the business plan takes into account every law in your State; location, vendor relations, employment, funding, and more. Here are some of the most important elements to include in your plan for the highest probability of success:
- Develop a Mission Statement for your would-be business. This should speak to your goals and values you will want to embrace as the owner.
- All of your anticipated expenses, projected revenues, and profit
- Choose and secure an acceptable location, according to both the State’s rules as well as your local town or county’s.
- A key component in any business but of critical importance in retail cannabis will be sources of inventory. You will want to begin forging relationships with possible wholesale sources for product for your store(s).
- I strongly suggest a qualified accountant and attorney, along with an experienced consultant who has extensive experience in legal retail cannabis operation.
This is where things start to get tricky.
The licensing process can vary by state, but in Washington, the LCB took all of the qualified applicants and quite literally drew names out of a hat.
There were to be two (2) picks in our town, Ellensburg, and we were drawn #2. However, we were first to open in the city, as well as the county. We were #37 licensed in Washington, and the 23rd to open and begin reporting sales. We also, at the time of writing this, are one of just a handful of stores in the State with zero violations.
If you are selected, you will need to be ready to act. Your research will be essential here, as you prepare all the necessary documentation. You may be asked to work with a number of regulatory bodies throughout the licensing process. Although, in Washington State, I was assigned a Licensing Specialist. I worked with them exclusively for the entire vetting, pre-opening and grand opening phases over a six (6) month period.
Setting up your cannabis business at the state and federal level
Before you start operating your cannabis business, you will need to register your business with your Department of State. In my opinion, you need an accountant. They can help you set up your business in the proper fashion at the Federal level as well. This will be imperative in obtaining, among other things, an EIN (Employer Identification Number), also known as a business tax ID number.
Since cannabis is still a Schedule 1 controlled substance, normal business tax rules and tax deductions do not apply. The Department of Treasury will allow such a business, but they will tax very heavily. You’ll need to learn about a section of the US Tax Code, 280E. You’ll have plenty of things that may keep you awake at night when starting a legal cannabis business. Don’t let IRS worries be one.
Get funding for your cannabis business
Finding a source of funding for any business can be challenging, but this is further complicated in the cannabis industry (are you seeing a theme here?).
Because marijuana is federally illegal, banks will not offer you a loan, nor will many venture capitalists. The risk for them is too high in most cases, as the government could pursue legal action against them for their involvement in the cannabis industry if desired.
However, if your business plan is solid, you will eventually find an investor willing to work with you. My wife and I made 37 presentations to would-be investors, but I could never quite put a deal together.
The people I spoke with wanted too much for too little, so at the end of the day, we mortgaged everything and took the plunge alone.
Times are changing
It is a new day and time in the cannabis industry now; I was a sort of pioneer, a trailblazing guinea pig is how I always described myself! Nowadays it may be different, even a little easier for you.
But, I know one thing for sure: it will be substantially easier for you if you hire me to help you with this process! If I could have hired the Rob Hendrix of 2019 back during the Summer of 2014, that would have had a profound effect on my success, and more importantly my stress levels!
If in fact you decide to make a go of it on your own or with private and/or family funding, I can assist with that process as well. Bootstrapping a cannabis business is an area many typical cannabis agencies are sorely lacking in, but thankfully, I am not a “typical cannabis consultant”.
Bootstrapping, the idea of proceeding ahead into the cannabis business alone, is an area of expertise that is seriously lacking in the cannabis consulting arena. I have already done the hard work, and am familiar with the do’s and don’ts. Let me help you.
Banking for your retail cannabis store
Another facet of getting funding for your cannabis business is finding a bank willing to work with you. We have an entire article dedicated to cannabis banking.
In all likelihood, you’ll have a hard time finding a bank willing to work with you at first, especially in newly legal states. There are ways to function within these restraints, which we dive into in that article.
Need help starting a cannabis business?
I have been through it all, seen it all, dealt with it all. I have been a hands-on owner who has persevered through short supplies and crazy high prices. In fact, I have even worked with our regulatory body, the LCB, in our capital, Olympia, to effect changes so our industry can survive and ultimately thrive. After all, it is our responsibility as participants in the industry to see that we further it for everyone.
If at any point in your own personal process you are feeling overwhelmed, troubled or lost, I can help. I started Cannabis Consulting Nationwide to help people just like you, and now, you truly have a friend in the cannabis industry. (I know that sounds contrite and cheesy but is the truth!)
Having someone in your corner from the start can be a huge asset. I can help ensure you won’t be surprised by anything. If you have any questions at all, reach out to me and I’ll be happy to chat with you! The first hour of phone time with me is always free. Call me, there is no such thing as a dumb question and there is practically nothing I wouldn’t send you upon request. Looking forward to meeting with you.