Illinois Application and Licensing - Round 1 Amanda Ostrowitz, Esq. - - PowerPoint PPT Presentation

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
• n 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
• n 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 info@mmlg.com Aaron Lachant, CEO (310) 499-4478 alachant@mmlg.com Regs Technology For general information: info@regstechnology.com For demos or additional training: aaron@regstechnology.com