Illinois Cannabis License Lottery To Pick 55 Of 2,693 Social Equity Applicants

CHICAGO — People submitted nearly 2,700 applications for licenses to legally deal weed in Illinois, state regulators announced.

The Illinois Department of Financial and Professional Regulation, or IDFPR, administer the state's tightly controlled adult-use cannabis dispensary market.

Agency officials said they plan to hold a lottery by mid-May to determine the next 55 winners of cannabis dispensary license.

Each winning applicant will have 45 days after the lottery to prove that they qualify as a "social equity applicant" in order to get a license.

How do they do that? According to the most recent version of the state's social equity criteria, individuals who collectively account for at least 51 percent of ownership must prove that they have spent at least 5 of the last 10 years living in a census tract classified as low-income or receiving public benefits — and they must have been a victim or a firearm injury or a family member must have been been charged with a low level cannabis crime.

IDFPR Secretary Mario Treto said his department was committed to making sure the state's marijuana industry "continues to set the gold standard for social equity."

"Our simplified online application process increased the accessibility for individuals of all backgrounds and from all over Illinois to have the opportunity to write the next chapter of the most equitable cannabis industry in the country," Treto said in a statement.

Last year, a Cook County judge ordered state officials to carry out dozens of "corrective lotteries" following a series of problems, delays and lawsuits associated with the first 185 licenses open to "social equity applicants" — the law that legalized the retail sale of marijuana in Illinois called for 75 licenses to be issued by May 2020 and another 110 by January 2021.

Related: Cannabis Dispensary Licenses Issued To New Owners For 1st Time Since Legalization

After next month's planned "Social Equity Criteria Lottery," IDPFR will have 60 calendar days to make sure applicants meet eligibility criteria.

The licenses will be geographically distributed across the state's 17 Bureau of Labor Statistics Regions, with 36 of the next 55 licenses to be issued set aside for the Chicago-Naperville-Elgin area.

Applicants in the lottery needed to register as a business, provide a list of officers and pay a $250 fee to be included. Principal officers can only be included in one entry and applicants are forbidden from applying in more than one region, according to IDFPR rules.

Next month's lottery is the first to be held under new rules announced in January.

Related: Amid Pot Shop License Legal Limbo, Simpler Process Proposed

Illinois' high taxes and limited supply means it has had some of the most expensive legal cannabis in the nation. Last year, it had the fewest licensed cannabis businesses per capita of any state where marijuana is legal.

Last month, nearly $134.8 million worth of cannabis was sold in Illinois, with about 25 percent of it coming from residents of other states. While overall sales are up 3 percent compared to last year, sales to residents of other states fell by 17 percent.

Missouri became the latest state in the Midwest to legalize recreational cannabis, which could provide significant competition for out-of-state consumers.

Financial analysts last month said Illinois weed prices have dropped 18 percent compared to a year earlier, with sales of pot shops in the south of the state facing sales declines in excess of 30 percent, Crain's Chicago Business reported.

Cannabis tax in Missouri is about 6 percent, while combined state and local taxes in Illinois can approach 40 percent on marijuana.

Anyone who wants to contest the list of 2,693 applicants for the next round of 55 adult-use cannabis licenses has until May 5 to submit a contestation form.