Cannabis Business in Illinois

Illinois Cannabis Industry Overview

• Medical Marijuana Patients: In 2021, Illinois had 101,366 registered medical marijuana patients, according to the Illinois Department of Public Health.

Cannabis Sales in 2023:

• Medical Cannabis Sales: $16.3 billion
• Recreational Cannabis Sales: Nearly $321 million
• Total Cannabis Sales: Close to $16.7 billion \ (Source: Illinois Cannabis Regulation Oversight Officer or CROO)
• Tax Revenue: In 2023, adult-use cannabis generated nearly $452 million in tax revenue, as reported by the Illinois Department of Revenue.

What is a Cannabis Touching Business?

Cannabis-touching businesses are those directly engaged in the cultivation, processing, distribution, or sale of cannabis products. These businesses are closely connected to the cannabis they handle.

As per the CROO, in 2024, there were:

• 282 adult use cannabis dispensaries in Illinois.

According to the Illinois Department of Agriculture, there were:

• 21 cultivation centers,
• 87 craft growers,
• 55 infusers,
• 163 transporters,
• 6 testing labs in the state in 2024.

Here are some examples of cannabis-touching businesses and their roles in Illinois:

• Craft Growers: Focus on small-scale cultivation, emphasizing high-quality, artisanal cannabis products and sustainable methods. They grow unique strains and comply with state safety and quality regulations.
• Cultivators: Grow cannabis plants indoors or outdoors, often specializing in strains or breeding new varieties. They must meet state quality and regulatory standards.
• Infusers: Incorporate cannabis extracts into consumable products like edibles and topicals. They ensure products are dosed accurately, safe, and meet strict state regulations.
• Testing Laboratories: Verify cannabis products' purity, potency, and safety, ensuring they are free from contaminants before distribution.
• Dispensaries and Retail Stores: Sell cannabis products to consumers, adhering to age verification, purchase limits, and state tracking requirements.
• Distributors: Transport cannabis products securely from producers to retailers, ensuring compliance with state tracking and transparency standards.

Hemp in Illinois

Hemp production and processing are legal in Illinois. The Illinois Department of Agriculture (IDOA) issues licenses for hemp cultivation and processing. If you are interested in a cannabis business for sale or starting a cannabis business, there are specific regulations you must be aware of.

Hemp Legality

• Illinois legalized hemp cultivation in 2015 as a pilot program following the 2014 Farm Bill.
• The Illinois Industrial Hemp Act was signed into law in 2018, removing restrictions on commercial hemp cultivation and aligning with the 2018 Farm Bill.

Obtaining a License

To legally cultivate or process hemp in Illinois, a person or business must obtain the appropriate license from the IDOA.

License Types

The following are the licenses for hemp cultivation and processing in Illinois:

• Industrial Hemp Cultivator License
• Processor/Handler Cultivator license

Application Requirements

To apply for either license, applicants must submit an online application. The application process for both licenses requires specific documentation and information, which may include:

• Personal Information: Applicant's name, phone number, email address, and physical address
• Business Information: Business name, physical address, and legal structure (e.g., sole proprietorship, LLC, corporation)
• Cultivation Details: Hemp strains, GPS coordinates of the cultivation site, legal proof of farm status, map of the cultivation site, and the application fee

Additional Requirements

• Criminal Background Checks: Applicants will undergo criminal background checks conducted by the Illinois State Police. Applicants with drug-related felony convictions in the past ten years will be ineligible.
• Fingerprint Tests: Applicants are required to pay a fee for fingerprint tests.
• Application Fees: Fees vary based on license type and duration.
• License Issuance: The IDOA has 30 days to review the application and either issue a license or deny the application.

Costs

The costs of hemp grower licenses in Illinois are as follows:

• 1-year license: $375
• 2-year license: $700
• 3-year license: $1,000

CBD in Illinois

Legality

• CBD products derived from hemp are legal in Illinois if the THC content does not exceed 0.3%.
• Marijuana-derived CBD oil with higher THC content is legal for patients with qualifying medical conditions who hold a valid medical marijuana card and have a physician's recommendation.

Regulations

• CBD products must be tested in a licensed laboratory and labeled according to the Illinois Food, Drug and Cosmetic Act.

Availability

• Hemp-derived CBD products can be found in various locations, including health food stores, head shops, smoke shops, vape shops, and online retailers.
• Marijuana-derived CBD oil with higher THC content is available at licensed medical marijuana dispensaries.