You Won a Cannabis License - What’s Next?

Congratulations! You were awarded a cannabis license in Illinois. Now the real work begins.


Cannabis related businesses have unique hurdles to address, as a cannabis business is subject to a complex web of State regulatory requirements, while also being considered illegal on a Federal level. In Illinois, your cannabis business must comply with various laws such as the Compassionate Use of Medical Cannabis Program Act (410 ILCS 130) and the Cannabis Regulation and Tax Act (410 ILCS 705), regulations issued by the Illinois Department of Agriculture, Illinois Department of Revenue, Illinois Department of Public Health, and Illinois Department of Financial and Professional, as well as other health and safety laws.


Most importantly, a cannabis licensee must be prepared to immediately address compliance issues. Upon being awarded a license, a cannabis business, that did not need to identify a physical location for its operations as part of the application process, has only six months to commence operations, which may include securing a location that complies with all state and local zoning requirements. Once a location is identified, the physical space itself must conform with regulatory requirements, and the plans must be approved by the State. If your business is unable to find a location and have the plans approved within one year, you may lose your license.


Once your business receives approval for its physical location, ongoing operational requirements are imposed, and your business must remain in compliance. For example, the business must maintain a thorough inventory tracking system, implement extensive facility security measures, and create employee screening and registration systems. Your business may also be subject to unannounced inspections by enforcement agencies, and you must be prepared to comply with and defend against any inspection findings.


Last but not least, you will need a team. Your business must find a suitable banking partner, financial advisor, and accountant, as the Federal prohibition on cannabis prohibits the use of any national banking agency and complicates taxes.


While opening a cannabis business is an exciting and lucrative opportunity, it takes significant work to become operational, and even more work to successfully maintain compliant operations once awarded a license. During the first few months, it is critical to lay the groundwork for your business’s future. Given the time constraints a cannabis business immediately faces, it is worthwhile to have plans in place prior to a license award or to seek immediate advice on regulatory compliance.

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