Europe’s Cannabis-Friendly Hotspots Could Trigger an Economic Shift
by Bethan Rose
Last year, Illinois emerged as the first U.S. state to authorize equity licenses. In total, 88 permits have been granted to social equity craft cannabis growers, who were recently granted some respite from the state Department of Agriculture after facing mounting pressure to kickstart operations by March 1.
Previously, growers were required to have their operations up and running by the deadline date. Fortunately for those licensees, an operational extension has been confirmed for Feb. 1, 2024. The date was confirmed via a news release published by the Department, which is committed to promoting and regulating proper agriculture across the state in a way that shields consumers and natural resources.
Craft cannabis growers in Illinois who received licenses in 2022 have been informed that the deadline date has been extended to Dec. 1, 2024. Operators who have not yet kick-started operations must demonstrate “good cause” for receiving an extension. The Department issued the extensions after considering supply-chain issues and the business-related consequences of COVID-19.
Although the state Department of Agriculture’s extension provides craft cannabis growers in Illinois with the opportunity to better prepare for the official launch of their businesses, there is nothing to say that the company owners will be capable of raising sufficient capital in time.
Many Illinoian cannapreneurs have been dealing with limited capital and are now scurrying to raise several million dollars for construction and other business expenses. Based on a report issued by the IPR, just two of the 88 social equity licensees have opened for business so far, with an additional 21 already serving the state’s recreational cannabis market.
Illinois marijuana sales figures published for the month of March are on a slippery slope, mirroring a lack of new store openings and crumbling cannabis prices. Data published by the Illinois Department of Financial & Professional Regulation (IDFPR) revealed the slowest revenue growth since statewide recreational cannabis legalization was effectuated three years ago.
Last month, adult-use cannabis sales amounted to $134.8 million. While the latest figures do represent 3% growth from the same period in 2021, the Department also highlighted the fact that sales have slowed down to almost 6% year-over-year growth in February and a 9% increase in January.
Since July of last year, sales growth for the recreational cannabis market in Illinois has sunk to the single digits. When industry experts observed the number of products sold, or the amount of cannabis on a unit basis, they confirmed that sales were up 9% year-over-year in March. However, when compared with figures from January or February, sales soared 16% and 13%, respectively. For the past year, unit sales grew in the double-digits.
The plummeting cannabis sales figures in Illinois have placed major financial pressure on some of Chicago’s biggest and most successful companies, including Cresco Labs, Green Thumb Industries, and Verano Holdings. Pricing aside, the legal cannabis market in Illinois is also suffering slightly due to a major lack of new store openings.
In 2022, 192 new stores received licenses. If the total number of new licensees had managed to get their hands on the $1 million required to open a dispensary, the existing number of retail locations would almost double. Slumping cannabis stock prices, recession fears, and climbing interest rates are just some factors that are affecting licensees’ ability to raise sufficient capital.
Members of the Illinois Senate have taken things one step further in a bid to further decriminalize statewide cannabis use. Senate Bill 125 and SB 1886 would forbid law enforcement officials/police officers from searching individual vehicles if they suspect the scent of marijuana. Furthermore, certain individuals on probation would be granted the option to consume cannabis or alcohol without facing negative legal repercussions.
In separate news, the Illinois Equal Justice Foundation (IEJF) recently inaugurated New Leaf Illinois with support from members of the Illinois General Assembly. Free legal aid is provided via the network, which is open to citizens who want to get marijuana convictions expunged from their criminal records.
State-funded, New Leaf Illinois is composed of 18 non-profit organizations that strive to help former convicts steer clear of the following situations:
For further information and to gain a better understanding of the eligibility criteria for marijuana expungements through New Leaf, visit the website. Statewide services are available.
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