Starting a cannabis company in Illinois? We’ve put together a state-specific guide covering everything from available license types to fees, regulations, and what you should include in a Illinois cannabis business plan. Jump to a section by clicking below, or go straight to our sample cannabis business plan.
Illinois legalized medical marijuana in 2013, and launched recreational sales in January 2020. Illinois’ adult-use program is noted for its social equity program, which created a low-interest loan program for applicants who meet certain eligibility requirements, such as having been convicted of possession of cannabis prior to it becoming legal.
Since HB 1 passed in 2013, Illinois adults can possess up to 2.5 ounces of cannabis every 14 days if they have a written certification from a doctor. More than 150,000 patients have registered for medical marijuana use in Illinois. Medical marijuana dispensaries in the state could generate up to $410 million in sales in 2021. Medical marijuana patients can grow up to 5 cannabis plants at home.
With the legalization of adult-use cannabis in 2020, adults over the age of 21 can legally possess up to 30 grams (about one ounce) of cannabis flower and up to 5 grams of cannabis concentrates. There are no restrictions on types of marijuana products that can be sold, but growing at home is only allowed for medical marijuana patients. It is estimated that there are around 1.5 million adult-use recreational customers in Illinois, and sales in 2021 are exected to top $1.2 billion.
On the medical side, Illinois issues licenses for two broad categories of cannabis businesses: dispensaries and cultivators (grow operations). There are five recreational cannabis licenses: dispensing organizations, cultivation centers, craft growers, processors, and transporting organization. Testing labs are approved by the Department of Agriculture. All cannabis companies must use BioTrackTHC for traceability from seed to sale.
Medical Dispensary: This is a retail storefront where patients can purchase marijuana. Dispensaries must follow strict state-mandated protocols for record-keeping, advertising, inventory tracking, security, location, product testing, and more.
Medical Marijuana Cultivators: These businesses, also called grow operations, grow cannabis plants indoors or outdoors. Marijuana is then processed and used to create products such as extracts or oils or sold to a dispensary in flower form. Medical cultivators are allowed to manufacture cannabis-infused products such as brownies and tinctures as long as they don’t require refrigeration or “hot-holding.” Like dispensaries, cultivators are highly regulated in Illinois--for instance, you must be at least 2,500 feet from a school.
Adult-Use Dispensary: This is a retail storefront where anyone 21 and over can purchase marijuana. Like the medical program, retailers must follow strict state-mandated rules and regulations.
Adult-Use Cultivator: Adult use cannabis cultivation centers, also known as grow operations, can grow, cure, package, and process infused items for wholesale sales to licensed cannabis businesses. A cultivation center can have up to 210,000 square feet under canopy.
Adult-Use Craft Grower: Craft growers are smaller cultivators, with a maximum of 5,000 square feet of canopy.
Adult-Use Processor: Processors, also known as infusors or manufacturers, can buy cannabis flower from cutivators to create concentrates and cannabis-infused products.
Adult-Use Transporting Organization: Transporters are companies that trasnport cannabis products between licensed cannabis businesses, such as taking product from a cultivator to a dispensary. They cannot deliver to individuals.
Ancillary business: If you don’t want to grow or sell cannabis in Illinois, there are plenty of other ways to be part of the booming cannabis industry. You can create a marijuana app, payment processing service, advertising agency, consulting firm, pest management product, accounting firm, automated plant watering system, security service, packaging labeling service, or legal firm--and that’s just the tip of the iceberg!
Application fees: Applying for a medical marijuana cannabis business license in Illinois costs $5,000 for a dispensary and $25,000 for a cultivator. The application fees for recreational licesnes are $5,000 for all types.
License fees: It’s $200,000 for a new medical cultivator license in Illinois ($100,000 to renew) and $30,000 for a new medical dispensary license ($25,000 to renew). Annual license fees for adult use cost $60,000 for retail, $100,000 for cultivators, $40,000 for craft growers, and $5,000 for processors and transporters.
Financial requirements: Brace yourself. Medical cannabis cultivators have to have $2,000,000 in an escrow account or surety bond in an Illinois bank, and medical dispensaries have to have $50,000. All adult-use licenses require $50,000 in escrow or surety account as well as a $50,000 bond.
Background check: If you’ll be the principal officer of a marijuana business in Illinois, you have to consent to being fingerprinted and undergoing a criminal history background check. You also have to disclose if you’ve ever been charged with a crime.
A business plan is not required to get a medical marijuana business license in Illinois, but it will certainly make the process easier. Your application already has to include an operation and management practices plan, patient management practice plan, site plan, and floorplan, some of which naturally overlap with a business plan. And if you plan on raising funding from investors, you definitely need a business plan.
Google your city or municipality name and “cannabis regulations” or “marijuana laws” (here’s some information about Chicago and Decatur). If your city or municipality’s website doesn’t have information about cannabis, check recent local news coverage or contact your city clerk, city manager, or town hall.
Confused or overwhelmed yet? That’s normal. With such a highly regulated industry, and one with different rules in every state, starting a cannabis company can be very complex. Get help with your cannabis business plan from Masterplans, the industry leaders. We’ve worked with hundreds of cannabis entrepreneurs like yourself to create investor-ready documents and presentations so you can not only meet regulations but get the funding you need. Click below for your free, confidential consultation: