Illinois Adult-use Cannabis and Social Equity

Opportunities for Social Equity Applicants

If you are interested in applying for a license, we invite you to read our summary of license types for a quick overview of the number of licenses available, application due dates, and associated fees. You can also access the official summary here, which includes more information on taxes, expungement, advertising and packaging requirements, and possession limits. Some of the information below was adapted from a previous blog post Taking a Deep Dive into the Illinois Cannabis Regulation and Tax Act.

Social Equity in the Cannabis Industry

The Cannabis Regulation and Tax Act acknowledges that:

• individuals who have been arrested or incarcerated due to drug laws suffer long-lasting negative consequences, including impacts to employment, business ownership, housing, health, and long-term financial well-being;
• family members, especially children, and communities of those who have been arrested or incarcerated due to drug laws, suffer from emotional, psychological, and financial harms as a result of such arrests or incarcerations;
• certain communities have disproportionately suffered the harms of enforcement of cannabis-related laws. Those communities face greater difficulties accessing traditional banking systems and capital for establishing businesses.

HB 1483 takes several steps to address these harms

1. Automatic Expungement: Automatically removing cases involving possession of up to 30 grams of cannabis from the criminal histories of those who were convicted of them.
2. Recovery, Reinvest, Renew (R3): Provides resources directly to community groups to offer services in communities that were disproportionately impacted by violence, poverty, and uneven enforcement of cannabis-related laws. Twenty-five percent of the funds generated from tax revenue and licensing fees are supposed to be available for the R3 program.
3. Social Equity Applicant: Creates “significant opportunities and resources” for those who were impacted and seeking to enter the regulatory system.

Chicago’s Disproportionately Impacted Areas vs. racial demographics

Social Equity Applicants

In short, a “social equity applicant” is a person who was arrested or convicted of a minor cannabis offense, or who is related to someone who was convicted, or is a person who has lived in an area, for 5 of the last 10 years, which has been “disproportionately impacted” by the war on cannabis.

However, it’s important to understand that this definition applies to entities and not individuals — the license application is for the operating of a business.

Therefore, “Social Equity Applicant” is an entity or business that meets one of the following criteria:

1. an applicant with at least 51% ownership and control by one or more individuals who have resided for at least 5 of the preceding 10 years in a Disproportionately Impacted Area;
2. an applicant with at least 51% ownership and control by one or more individuals who have been arrested for, convicted of, or adjudicated delinquent for any offense that is eligible for expungement under the Act or who are a member of an impacted family; and
3. applicants with a minimum of 10 full-time employees, with at least 51% of current employees currently residing in a Disproportionately Impacted Area or who have been arrested for, convicted of, or adjudicated delinquent for any offense that is eligible for expungement under the Act or who are members of an impacted family.

Advantages for Social Equity Applicants

1. Access to the Cannabis Business Development Fund, which will, among other things, provide low-interest rate loans for necessary expenses to start and operate a cannabis business, provide grants, and assist with job training and technical assistance for residents in Disproportionately Impacted Areas
2. 50% reduction of the non-refundable license application fees
3. 50 point advantage (of 250 total points) above all other applicants for licenses
4. Potential to receive $100,000 or more in seed funding from an Early Approval Dispensing or Cultivation License holder in return for no more than 10% ownership stake. In return for early approval, license holders must commit to a Social Equity Inclusion Plan one of which may include said incubation.

Part of Chicago Cannabis Company’s mission is to provide opportunities to individuals from historically disadvantaged groups. Cooperative ownership is a powerful way to extend the benefits of business ownership to all the workers that are sharing in the risk and reward of this enterprise. Read more about our worker-owned cannabis company.