Illinois has a strict regulatory environment with a recent heavy focus on social equity in awarding licenses. Only 21 mega cultivation licenses (210,000 sq. ft. allowable canopy) are permitted in the state, which also allows processing, and no single operator can own more than ten retail licenses.

The 185 new social equity applicant ("SEAs") retail licenses that had been stuck in legal limbo since September 2020, are finally getting released. The judge recently lifted the ban and will allow Illinois Department of Finance and Professional Regulation ("IDFPR") to issue the conditional licenses in three waves starting July 22.

The Illinois Department of Agriculture awarded the 60 craft grow licensees (5,000 sq. ft. allowable canopy, expanding to a cap of 14,000 sq. ft.), 32 infuser licenses, and 141 transporter licenses.

September 2023 | nuEra Cannabis announced its acquisition of ieso

November 2021 | Ayr Wellness entered an agreement to acquire Gentle Ventures, LLC (Dispensary 33) in Chicago

July 2021 | Ayr Wellness announced its acquisition of Herbal Remedies Dispensaries for $30MM

March 2021 | Parallel announced its acquisition of Windy City Cannabis up to $155MM

February 2021 | Verano Holdings LLC went public on the Canadian Securities Exchange

August 2020 | Ascend Wellness acquired Moca Modern Cannabis and Midway Dispensary

February 2020 | Jushi acquired two dispensaries in Illinois

The market continues to boom, with a total of $1.9B of cannabis sales in 2021. With only 21 mega cultivation licenses and no outdoor grow of consequence, the Illinois wholesale market is poised to be the best in the country. The addition of 185 new dispensaries in this relativity under-penetrated retail market will only further drive sales growth.

Most of the MSOs already have substantial vertical operations in the state. Mid-tier MSOs and those that aspire to be, would be wise to find their way into the Prairie State in a substantial way.

In an absolute boon to SEA lottery winners, Pritzker is allowing the licenses to trade freely, and we are beginning to witness transaction activity at a frenetic pace. SEAs are raising financing, considering selling out, and in some cases forming alliances to create the retail scale required to ensure adequate sources of future supply. Inside this activity, opportunity abounds for well-capitalized players with the foresight to enter this burgeoning market.

All we can say at this point is, buckle up and stay tuned.