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With license delays persisting and Illinois legislative session ending, situation called 'dire' for some marijuana entrepreneurs

"Dire" situation for some marijuana entrepreneurs
With Illinois legislative session ending, situation called 'dire' for some marijuana entrepreneurs 03:01

CHICAGO (CBS) -- The State of Illinois made $131 million last month alone in legal weed sales – but none of that marijuana was grown or produced by new state license winners trying to break into the industry.

As CBS 2's Tara Molina reported Wednesday, there is a deadline this week at the Illinois State Capitol. The legislative session ends Friday - and if nothing happens on some pending bills, it could be another year of waiting. In turn, it could be another year until you see any new products on the shelves of cannabis dispensaries.

Molina is told some entrepreneurs can't afford to hold on any longer.

Illinois has seen more than $2 billion in cannabis sales in the more than two years since legalization for recreational use. And there is not one new company growing it, moving it, or selling it.

"There's no minority representation," said Frank Cowan – a dispensary license winner whose licenses are still tied up in a court case.

"You know, the last thing that Illinois wants is for investors to lose interest in Black and Brown companies because it just took so long that maybe some of the opportunity was missed," said Akele Parnell.

Parnell won a craft grow license from the State of Illinois to grow marijuana. But with state rules limiting grow space for new growers to 5,000 square feet, investors are looking elsewhere. It's just not profitable.

There has been an ask for a long time now for state lawmakers to address this and increase the space to 14,000 square feet.

"People who have licenses right now need to know if they can build for that capacity," said Edie Moore, Chicago NORML legislative co-chair and board member.

That is just one of the holdups right now in Springfield. With the legislative session wrapping this week, it's closing time.

"This would be another year without any progress, and there are so many people that would be affected by non-activity," said Douglas Kelly of the Cannabis Equity Illinois Coalition.

And the door could shut on those the state promised to give a piece of the multibillion-dollar pie -- again.

We to Moore and Kelly, both social equity industry advocates, about what is at stake.

"It's dire," Moore said. "This whole thing could fall apart."

Moore says everyone who has won a license, and paid thousands for the opportunity to get involved in pot in Illinois, is stuck in some kind of red tape right now.

"They're discouraged. They're going broke. Teams are falling apart," Moore said. It's hard to find capital, because they're going to other states like New Jersey and New York."

Kelly echoed the sentiment.

"The whole premise of legalizing was to repair the harms for those mostly impacted by the war on drugs - and those are the very people that are still being locked out," he said.

People who won transporter licenses – which are required in Illinois – have their own unique problem. The dispensaries currently in business – which had been medical marijuana dispensaries before recreational legalization – already move their own product and do not need transporters. As a result, entrepreneurs who won transporter licenses have nothing to move.

"Then we have our transportation people that just received licenses, but there is no business for them to do," Kelly said. "Because there are no new dispensaries out, we've got 185 tied up in litigation. Without them and no craft growers are open, there's no work for them."

Kelly was in Springfield Wednesday and has been traveling there for almost two months now, talking to lawmakers about why the changes can't wait another year.

"They can't say that they didn't know about these issues, because we have been down here," he said.

Kelly's message to your state representatives ahead of the end of session was: "There shouldn't be any confusion. Everyone should understand what needs to be done, and do it."

"We will not be able to address any of this for another year!" added Moore. "Craft growers really need to start getting open. We need to diversify the industry and bring down the prices of the cost of weed. None of that will happen if we don't get these licenses out the door." 

Molina reached out to state stakeholders and officials. There was no response late Wednesday.

Social equity license holders are not the only ones losing out with all of the delays and state red tape. The state of Illinois makes serious money off of pot - last year, taxes on weed brought in millions more than taxes on alcohol.

Cannabis sales figures for Illinois can be found here. Tax revenue figures for those sales can be found here, through the Illinois Department of Revenue.

The Illinois Department of Financial and Professional Regulation issued the following statement about the situation:

"Due to a court order, IDFPR cannot issue the 185 conditional adult use cannabis dispensary licenses to recipients selected in the 2021 lotteries at this time.

"IDFPR looks forward to following the rulemaking process to implement a streamlined process for the 55 new conditional adult use cannabis dispensary licenses to be issued later this year. This streamlined process includes a simpler application process that does not include the scoring of applications, removes barriers for social equity applicants, and expands opportunities targeted to the communities most impacted by the failed war on drugs."

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