Illinois MMJ Businesses Reeling After Delays, Uncertainty

52Illinois Gov. Pat Quinn made a highly controversial last-minute decision to leave office with unfinished business: the licensing status of marijuana cultivation and dispensary applicants. Now, the budding medical cannabis industry in the state has been left in a lurch.

Unfortunately for the state’s MMJ entrepreneurs, Quinn left the matter to his successor and outspoken cannabis critic, Gov. Bruce Rauner. During Rauner’s 2014 campaign, he said he would have vetoed the Illinois bill legalizing medical marijuana if he was the one in office at the time. It has been noted that his criticism is not just of the state’s medical cannabis licensing process, but also of cannabis itself.

Hundreds of license applicants are now worried about what’s going to happen next, and some even fear that the entire state’s four-year pilot program on marijuana is in jeopardy. With this uncertainty, marijuana entrepreneurs have to put their businesses on hold.

PDI Medical is one of those awaiting the state’s next steps. The company filed three dispensary applications last year, and pharmacist Joseph Friedman says the situation puts everyone “in a state of limbo.”

Illinois’s program allows for 60 dispensary licenses and 21 cultivation licenses. Many of the companies vying for these have already shelled out tens of thousands of dollars for application fees, lawyers, and consultants. Some have even begun building or renting their business spaces.

Not only are these entrepreneurs left hanging, but their investors are becoming impatient as well. Some of those who are providing startup funds are moving on.

Attorney Brian Rosenblatt, a Chicago lawyer who works closely with several of the business license applicants, attests to this. He stated that he has been informed by various individuals of their investors pulling out, or contemplating to, because of the delays.

In addition, there seems to be no consensus as to what the next scenario will be. People are seeing various possibilities, and Rauner’s comments make it difficult to determine which step the state is going to take next.

Over the weekend, news leaked that Quinn held a shortlist for business licensing before he left office. To this, a spokesman for Rauner responded that the governor’s office will thoroughly review the process used by the former administration. “No licenses will be granted,” he emphasized, “until [Quinn’s] process is thoroughly reviewed.” To some, that comment seemed to indicate that it may be a while before the licensing process picks up.

But in a separate statement last week, Rauner’s office said the governor commits to having “a quick and thorough review”, hoping that this will bring “clarity” to “many concerned families”.

Some insiders are optimistic that the new governor will tackle business licenses sooner than later. This is partly based on the fact that Rauner retained the statewide project coordinator for Quinn’s MMJ pilot program. Rep. Lou Lang, D-Skokie, says that no one knows as much about the program as the coordinator does. Lang was a prime sponsor of the bill that established the cannabis program.

Regardless of Rauner’s timetable, Illinois dispensaries aren’t expected to open until around summer at the earliest. Even if the first licenses were issued this week, cultivation operations have to set up shop and growers have to harvest their first crop. Lang projects that the product may not be available until May or June, leaving only two and a half years in the four-year pilot program.

Such outlook could dampen the interest of the business community and change the industry’s dynamics. Lang is concerned that entrepreneurs might not want to put much money into the two and a half years remaining of the program, and with no guarantee of continuance after that. In addition, he pointed out that with only two and a half years left, the prices will spike for patients.

As a solution, Lang is planning to introduce legislation extending the life of the program. It would basically restart the four-year timeline, beginning when the business licenses are actually issued.

Meanwhile, license applicants have also started taking action. Last weekend, some of them and their attorneys held a meeting in Chicago to discuss the forming of an association. One of the goals of the Cannabis Association of Illinois will be to get Rauner’s office to focus on the issue.

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