illinois - mmlg
TRANSCRIPT
Illinois Application and Licensing - Round 1
Amanda Ostrowitz, Esq. (Regs Technology)
Aaron Lachant, Esq. (MMLG)
Disclaimer We are not your lawyers. We are not giving you legal advice. This presentation does not create an attorney-client relationship. Do not act upon information presented in this webinar without seeking professional counsel. Cannabis remains a Schedule I drug and is illegal under federal law. This presentation is not intended to assist you in violating any federal law.
Agenda
1) Available Licenses 2) Meet the Regulators 3) Local Control and Licensing Opportunities 4) Social Equity 5) Dispensary Applications and Scoring 6) Craft Cultivation and Infuser Applications and Scoring 7) Application Strategies
Available License Types
1) Dispensary - Up to 75 adult-use licenses
2) Infuser - Up to 40 licenses available 3) Transporter - Unlimited licenses available 4) Craft Grower - Up to 40 licenses available 5) Cultivation Center - Limit of 30 total
• Only current medical cultivators eligible until July 1, 2021 (maybe)
Meet The Regulators
1) Department of Agriculture 2) Department of Financial and Professional Regulation 3) Department of Public Health 4) Illinois Cannabis Regulation Oversight Officer 5) Department of Revenue 6) Department of Commerce and Economic Opportunity 7) Department of State Police
Local Control Municipalities/Counties can:
• Enact time, place, and manner restrictions • Limit the number of cannabis businesses • Prohibit cannabis businesses • Allow social consumption • Impose taxes
• However, they CANNOT regulate certain activities in more
restrictive manner than the State
Licensing Opportunities • DeKalb • Lombard • Chicago • Woodstock • Niles • Galesburg • Northbrook • East Peoria • Urbana • South Beloit • Skokie • St. Charles
• Round Lake Beach • Worth • Quincy • Rolling Meadows • Des Plaines • Rock Island • Canton • Mt. Prospect • Peoria Heights • Metamora • Chicago Heights
Social Equity Applicant Requirements
• At least 51% ownership and control by one or more individuals who:
• Have resided in a Disproportionately Impacted Area (“DIA”) for at last 5 of preceding 10 years; OR
• Have been arrested for, convicted of, or adjudicated delinquent of any offense eligible for expungement under the Act; OR
• Is a member of an impacted family (regarding arrests/convictions/adjudications)
• Applicant has at least 10 full-time employees and at least 51% of current employees:
• Currently reside in a DIA; OR • Have been arrested for, convicted of, or adjudicated delinquent of any offense
eligible for expungement under the Act; OR • Is a member of an impacted family (regarding
arrests/convictions/adjudications)
Initial Dispensary Application Period - Timeline
Conditional Adult Use Dispensing Organization Licenses
• October 1, 2019 • DFPR to release applications for
Conditional Adult Use Dispensing Organization Licenses
• January 1, 2020 • Last day to submit applications for conditional licenses
• May 1, 2020 • DFPR will award up to 75 new dispensary licenses
BLS Region Licenses BLS Region Licenses
Bloomington 1 Peoria 3
Cape Girardeau 1 Rockford 2
Carbondale-Marion 1 St. Louis 4
Champaign-Urbana 1 Springfield 1
Chicago-Naperville-Elgin 47 Northwest Illinois (nonmetropolitan) 3
Danville 1 West Central Illinois (nonmetropolitan) 3
Davenport-Moline-Rock Island 1 East Central Illinois (nonmetropolitan) 2
Decatur 1 South Illinois (nonmetropolitan) 2
Kankakee 1
Conditional Adult Use Dispensing Organization - Application Requirements
• $5,000 Fee • Proposed Legal Name • Proposed Bylaws • Evidence of SE status • Business Plan • Security Plan • Inventory Control Plan • Floor Plan • Description of ADA Features • Community Engagement Plan • Diversity Plan
• Licensed Private Security Contractor Contract
• Procedures for record keeping/security measures
• Description of cannabis storage • Description of air treatment systems • Description of training and education
provided to agents • Estimated volume of stored cannabis • Number of licenses Applicant is
applying to
Conditional Adult Use Dispensing Organization - Application Requirements
• Name, address, SSN, DOB for each Principal Officer and Board Member
• For Principal Officers: • Information about ownership
interests in other cannabis businesses
• Disclosure of bankruptcy/default on spousal or child support
• Resume • Signature
• For Board Members: • Summary of instances of past
penalties incurred as manager or board member
• Whether applicant plans to apply for grant/loan under the program
• Certification will comply with the Act • Agreement to respond to supplemental
requests for information • Reasonable assurance - no
detrimental impact on community • Statement that will not divert cannabis • Other info deemed necessary by the IL
Cannabis Regulation Oversight Officer
Conditional Adult Use Dispensing Organization - Application Scoring Criteria
Category Points Category Points
Security and Recordkeeping 65 Environmental Plan 5
Business Plan, Financials, Operating and Floor Plan
65 Illinois Ownership 5
Social Equity Applicant Status 50 Veteran Ownership 5
Knowledge and Experience 30 Diversity Plan 5
Employee Training Plan 15 Community Engagement Plan (Bonus Points) Up to 2
Labor and Employment Practices 5
Initial Application Periods Timelines
Craft Growers, Infusing Organizations, Transporters
• January 7, 2020 • DOA to release applications
• March 15, 2020
• Last day to submit applications for first wave
• July 1, 2020 • up to 40 licenses for infusers • up to 40 licenses for craft growers • licenses for transporting organizations (no limit)
Craft Grower - Application Requirements
• $5,000 Fee • Proposed Legal Name • Proposed Physical Address • Proposed Bylaws • Identification of every person with
financial or voting interest of 5% or greater in the Applicant
• For Principal Officers, Board Members, and Agents:
• Verification from State Police that background check have been conducted
• List of degrees, certifications, and relevant experience
• For Principal Officers and Board Members:
• Name, address, SSN, DOB • Instances where individual pled guilty, was
convicted, fined, or had registration/license revoked/suspended
• Instances where individual managed/served on board of entity that pled guilty, was convicted, fined, or had registration/license revoked/suspended
Craft Grower - Application Requirements
• Copy of Zoning Ordinance/Permit and verification of compliance
• Survey of facility • Cultivation, processing, inventory,
packaging plans • Commitment to local waste
provision compliance • Commitment to a technology
standard for resource efficiency • Resource plan • Recycling Plan
• Description of where cannabis will be grown, harvested, manufactured, packaged, prepped for distribution
• Proposed Employment Practices • Cultivation/Horticulture Business
Experience • Experience in agriculture cultivation
techniques & industry standards • Experience/practices that promote
economic empowerment in DIA
Craft Grower - Application Scoring Criteria
Categories
Suitability of Proposed Facility Labor and Employment Practices
Employee Training Plan Environmental Plan
Security and Recordkeeping Illinois Ownership
Cultivation Plan Veteran Ownership
Product Safety and Labeling Plan Diversity Plan
Labor and Employment Practices Community Engagement Plan (Bonus Points)
Social Equity Status Other Criteria from the DOA
Infusing Organization - Application Requirements
• $5,000 Fee • Proposed Legal Name • Proposed Physical Address • Proposed Bylaws • Identification of every person with
financial or voting interest of 5% or greater in the Applicant
• For Principal Officers, Board Members, and Agents:
• Verification from State Police that background check have been conducted
• List of degrees, certifications, and relevant experience
• For Principal Officers and Board Members:
• Name, address, SSN, DOB • Instances where individual pled guilty, was
convicted, fined, or had registration/license revoked/suspended
• Instances where individual managed/served on board of entity that pled guilty, was convicted, fined, or had registration/license revoked/suspended
Infusing Organization - Application Requirements
• Copy of Zoning Ordinance/Permit and verification of compliance
• Proposed Employment Practices • Processing, inventory, and
packaging plans • Resource plan • Recycling Plan • Description of facility/cannabis
storage
• Experience/practices that promote economic empowerment in DIA
• Experience with infusing products with cannabis concentrate
• Experience operating commercial kitchen/lab preparing products for human consumption
• Any other info required by rule
Infusing Organization - Application Scoring Criteria
Categories
Suitability of Proposed Facility Labor and Employment Practices
Employee Training Plan Environmental Plan
Security and Recordkeeping Illinois Ownership
Infusing Plan Veteran Ownership
Product Safety and Labeling Plan Diversity Plan
Labor and Employment Practices Community Engagement Plan (Bonus Points)
Social Equity Status Other Criteria from the DOA
Future Application Periods - Timelines
Wave 2 - December 21, 2021
• DFPR will award up to 110 licenses for new dispensaries
• DOA will award: • up to 60 additional licenses for infusers • up to 60 additional licenses for craft growers • licenses for transporting organizations (no limit)
Case Study: Pasadena, CA
• Competitive Licensing • 6 Retail Permits Available • 128 Applicants “How tough is for a retail marijuana business wanting to locate in Pasadena? If six dispensaries do open, that would represent less than 5 percent of all applicants. You’d have a better shot getting into Caltech.” – Pasadena Star News, March 31, 2019.
Strategies for Winning Differentiating Yourself From Your Competition
• Local Well-Capitalized But Inexperienced Groups
• Unregulated Market Participants
• Licensed Out of State Cannabis Businesses
• Multi-State Operators
• Publicly Traded Canadian Companies
Strategies for Winning Assembling a Multi-Disciplinary Team
Strategies for Winning Visuals Matter
Strategies for Winning
Capitalization Matters
• Pre-Licensing / Post-Licensing Costs
• Pro Forma
• Proof of Funds
• Social equity grants
Strategies for Winning Preparation
• Applications due before January 1, 2020
• 3 month application window
• Start early
• Set internal deadlines and keep moving forward
Strategies for Winning
Community Engagement
• Tiebreaker
• Important for obtaining local permits
• Demonstrating support in state application
• Set internal deadlines and keep moving forward
Questions?
Contact Information
MMLG (310) 449-4528 [email protected]
Aaron Lachant, CEO
(310) 499-4478 [email protected]
Regs Technology
For general information: [email protected]
For demos or additional
training: [email protected]