Bottlenecks of Bud Bureaucracy

By Dr. Mila K. Marshall Cannabis Corner Editor

Extensions granted for the 95% of craft grow licenses come with great relief. Growers are the genesis of the supply chain and without product there are no profits. Communities are benefiting from the holistic approach to addressing violence intervention through the state’s Renew, Restore and Reinvest (R3) program, Chicago News Weekly reached out to the agency to learn about the broader impact and challenges. Finally, as Chicago prepares to elect a new mayor, new leadership can catapult cannabis towards deeper social equity commitments. This week’s Cannabis Corner is all about the bottlenecks of bureaucracy and reflecting on the rewards if and when we get equity right.

Growing Pangs

Covid-19 and supply chain issues were identified as influencing the Illinois Department of Agriculture to grant operational extensions to craft growers. The March 1, 2023 deadline has been pushed back to February 1, 2024 for licenses awarded in 2021. For 2022, Craft Grower recipients have until December 1, 2024 to become operational.

The IDOA website states:

“Licensees should be aware that additional extensions may not be granted, and the Department retains the authority to adhere to this operational deadline, regardless of factors related to finances, ownership changes, location-related issues, or other reasons.”

“I appreciate the extension,” shared Reese Xavier of HT23, yet he has some concerns about the extension timing and payment for license renewal.

“The extension date is now pushed to February first of 2024 but my license renewal date which is this summer around June or July I’ll have to pay $40,000. If I’m not operational by that date, I only have 7 months with that timeline.” - Reese Xavier, HT23 Xavier and his team have a way to go for raising capital, but he and his team have pivoted to a new approach for becoming operational before the February extension.

Of the 85 Craft Growers listed on the IDOA’s website at the time of this publication a dozen were listed as having construction approval. None of the 11 licenses with Chicago addresses have even a construction permit. The state stands to earn about $3.4million from craft grow license renewals from establishments that are still seeking capital themselves. Average estimates range from $6.5 million to $10 million to open and build out a craft grow facility. Entrepreneurs are therefore looking to raise between $500 million and upwards $850 million in an industry where access to capital is limited due to marijuana being federally illegal.

The Politics of Payments

The creation of the R3 Board brought with it a vehicle to make an impact in communities through a funding process to support justice im- pacted communities and individuals. The Emergency Violence Pilot awarded a little over $3.5 million to 21 organizations. Recipients like the DuSable Museum and the Chicago Urban League received funds for their Assessment and Planning projects. The state celebrated awarding 80 community groups $35 million under the leadership of Lt. Governor Juliana Straton. The required 25% of marijuana tax dollars for violence prevention, trauma and re-entry services is a much-needed source for transitioning cannabis dollars into the local economy.

Chicago News Weekly was tipped off to an emerging issue with the Illinois Criminal Justice Information Authority disbursement of grant funds, the agency charged with managing the grant process. Being made aware of possible challenges, ICJIA was invited to answer questions related to grant awards and their awareness of complaints. When ICJIA was invited to comment Cristin Evans, Public Information Officer’s III for ICJIA shared the following response:

“We are going to hold off on the other responses until there is more information on the organizations that are having trouble. Distributing R3 funds in a timely manner to organizations serving their communities is a top priority so let us know what you find out so that we can check into it.”

Chicago News Weekly subsequently submitted a FOIA request for program details and will continue to follow the story on both sides.

Should Chicago follow in Evanston’s footsteps?

Two candidates are vying to lead Chicago for the next 4 years. Under the Lightfoot administration cannabis advocates have struggled to understand the city’s game plan for the city’s cannabis tax dollars. Evanston for example decided to fund municipal reparations with cannabis tax dollars. However, the city found itself with only one retail store. Recent conversations for consumption lounges in Evanston, IL have highlighted an opportunity to promote safe and fair consumption while feeding the reparations fund. Remarks from a memo published in the Evanston Roundtable, Health & Human Services Director Ike Ogbo stated, “Consumption lounges may be viewed as an equity issue for residents who reside at properties where cannabis consumption is prohibited.”

In April of 2022 Chicago got its first consumption lounge, Green Thumb Industries’ Rise dispensary at 1325 Armour Blvd. While Evanston is looking at rezoning ordinances to follow suite for opening consumption lounges for good reason, Chicago seems stalled on what to do with their cannabis tax dollars.

As Covid disseminated Chicago’s tax base Mayor Lightfoot canceled plans to eliminate 350 city jobs thanks to the cannabis tax revenue earned by the city. Under her tenure the city created a bond against future marijuana revenue to deal with a $2 billion budget shortfall as was reported in a 2020 Leafly article. The cannabis community has been waiting for leadership to work collaboratively to decide how that money should be used. Maybe the next mayor won’t let this critical aspect of financial equity go up in smoke.