Politics
Illinois Officials Boast Of ‘Most Diverse Cannabis Industry In The Nation’ As 100th Social Equity-Owned Dispensary Opens
As the 100th social equity-owned marijuana store in Illinois opened its doors last week, officials are touting what they say have been successful efforts to diversify ownership of the state’s cannabis market. Citing a new study, they announced on Thursday that Illinois “currently has the most diverse cannabis industry in the nation.”
The study, published by the state’s Cannabis Regulation Oversight Office (CROO), found that 60 percent of all adult-use marijuana business licenses granted by regulators have been issued to minority- or women-owned businesses.
During the study period itself, which stretched from January 1, 2020 through January 31, 2023, 59 percent of marijuana retail licenses went to women- or minority-owned businesses—a much greater share than the 21 percent of medical marijuana dispensary licenses owned by minority- or women-owned businesses.
Social equity-owned businesses also represented 63 percent of craft growers, 61 percent of infusers and 74 percent of cannabis transporters, according to the study. And almost 84 percent of Illinois’s direct forgivable loans went to minority-owned businesses.
“These demographics make Illinois the most diverse cannabis industry in the nation,” CROO said of its new disparity study.
“We’re incredibly proud of our emerging cannabis industry, and we’re fully committed to making this an industry where people most affected by the War on Drugs can start their own business and thrive,” Gov. JB Pritzker (D) said in a statement about the report. “That’s why Illinois commissioned the largest, independently reviewed cannabis-focused disparity study in the nation, and the results show that our administration’s policies focused on social equity have paid off.”
“Illinois is first in the nation when it comes to diversity in the cannabis market,” he added, “and this report provides concrete steps we can take to continue supporting new businesses in a highly competitive marketplace.”
Via the Office of Illinois Gov. J. B. Pritzker.
CROO commissioned the minority- and women-owned data analytics company Nerevu Group to conduct the study, which looked at the state’s adult use cannabis market’s first three years of operation. The work culminated in a 262-page report.
As for its recommendations on how to strengthen the state’s social equity program, Nerevu recommended that Illinois increase access to capital, simplify management and administration, unify state policies and practices across agencies and expand economic opportunities for new businesses.
CROO notes in the report that neither the cannabis licensing program itself nor the recommendations from Nerevu’s disparity study speak directly to race or gender. “All industry participants,” it says, “would benefit from these policies.”
The report also recommends another disparity study be conducted in three to five years.
Erin Johnson, the state’s cannabis regulation oversight officer, called the new report “a critical first step in understanding diversity in our cannabis industry.”
“Every week, new businesses open, and the industry continues to change, evolve, and grow,” Johnson said. “We thank all those that contributed to this report and look forward to discussing the recommendations in the coming weeks and months.”
“The numbers are clear: the spirit of the Cannabis Regulation and Tax Act is being achieved, with people from all backgrounds now obtaining licenses to own and operate dispensaries,” said Mario Treto Jr., secretary of the Illinois Department of Financial and Professional Regulation (IDFPR). “We look forward to additional dispensaries meeting the requirements for licensure in the future—which will further increase sales and mean additional funding for resources for all people across Illinois.”
The report shows significant diversification of the state’s cannabis industry since its launch in 2020. As CROO pointed out in a report published late last year, initially “businesses were 100% majority White owned,” with only one majority woman-owned business having been licensed.
In 2020, no marijuana business licenses in Illinois were controlled by businesses majority owned by Black, Latino or Asian entrepreneurs. All 32 licenses were held by white-owned businesses. And just 3 percent of licenses went to women.
By 2023, Black-owned businesses represented 27 percent of all licenses. Majority Latino- and Asian-owned businesses, meanwhile, climbed to 5 percent and 3 percent of licenses, meanwhile, while mixed-race owners held 2 percent of licenses. Demographics information for 18 percent of license holders was unknown or unreported.
As for gender, women-owned businesses held 16 percent of licenses by 2023.
“Illinois set out to create the most equitable cannabis industry in the nation, and this study confirms we’re on the right track,” Lt. Governor Juliana Stratton said in a press release about the new report. “Numbers alone don’t tell the whole story, though—each license represents an opportunity for communities long left behind. We’re not just changing an industry; we’re changing lives.”
Separately on Friday, the Pritzker administration announced the opening of the state’s 100th social equity-owned marijuana retailer, The Dispensary Champaign, operated by SEquity Ventures LLC.
“We’re very excited to have been selected and to be part of the Illinois social equity program,” owner Jeff Soenksen said in a state announcement. “We’re grateful to IDFPR for their exceptional service and professionalism during the process to date. We’re even more excited that we’ve completed the build out and state inspection for our dispensary so we can start serving the Champaign community.”
Also last week, the Pritzker administration announced that the state-legal cannabis industry passed the $1 billion sales mark for the year on July 1—about two weeks ahead of when that milestone was reached last year.
The governor said the state’s marijuana industry is “growing and thriving.”
“The increase in total adult-use cannabis sales, combined with the policies my administration is implementing to support communities ravaged by the War on Drugs, highlights how this emerging industry is helping us set a national standard in equity and economic justice,” Pritzker said at the time. “Growing sales in 2024 means cannabis tax revenue will continue to play a major role in righting decades of wrongs in the state’s criminal justice system.”
Illinois retailers sold just under $2 billion worth of marijuana in calendar year 2023, setting a monthly record in December that still stands.
The new records came after a more minor one set in November: the most-ever marijuana sales to in-state residents, as reported by the Illinois Department of Financial and Professional Regulation (IDFPR).
Tax revenue from cannabis sales has now put more than $244 million toward grants to encourage economic development, violence prevention and youth development in areas disproportionately impacted by cannabis arrests and imprisonment, the state said on Wednesday. And through its Cannabis Social Equity Loan Program, “almost $22 million in forgivable loans has been issued to social equity craft growers, transporters, and infusers.”
Officials in Illinois in recent months have eyed making changes to how hemp-derived cannabinoids are regulated, but a proposal to do that failed to make it out of the General Assembly this session.
Separately, state senators earlier this year took up a bill that would have legalized psilocybin and allowed regulated access through service centers, where adults could use the drug in a supervised setting.
The state also gave preliminary approval in March to add female orgasmic disorder, or FOD, as a medical cannabis qualifying condition.
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Photo courtesy of Philip Steffan.
