As social equity applicants continue to apply for the coming round of cannabis dispensary licenses, the Pritzker administration opened applications for the first $21 million Low Cost Loan Program authorized in the cannabis law signed in June. The initiative is funded through the Cannabis Business Development Fund, created by the Cannabis Regulation and Tax Act, to support social equity applicants seeking cannabis business licenses.
The fund is primarily supported through the licensing fees of the first round of dispensaries and cultivators, among other sources. As additional early use licenses for dispensaries and cultivators are awarded, the available funds for loans are expected to surpass $30 million.
“When we made equity the core of the state’s new adult-use cannabis market, we wanted to ensure that social equity entrepreneurs had access to capital to get their businesses off the ground, and we’re proud to announce that interested applicants can start this process,” Gov. J.B. Pritzker said. “Social equity applicants will have access to low-interest loans and the technical assistance they need to get their business off the ground in this new industry. Illinois took a stronger approach than any other state in the nation to right the wrongs of the past and expand opportunity to create wealth in communities most disproportionately impacted by prohibition, and I encourage people to apply.”
Applications for the loans are available here. Initially, social equity applicants for the conditional adult use dispensing organization license will be able to apply for a loan. As the license application periods open for craft grower and infuser licenses in January 2020, those social equity applicants will be able to apply to the loan program as well.
The low-interest loans will be available to those applying for a license to operate a cannabis business that meet the following criteria as set forth in the Cannabis Regulation and Tax Act:
- Has at least 51 percent ownership and control by one or more Illinois residents who:
- Have lived in a disproportionately impacted area in 5 of the past 10 years. Disproportionately impacted areas are census tracts that have high rates of arrest and incarceration related to cannabis offenses, among other qualifications including high poverty and unemployment. A map of these areas is available here.
- Have been arrested for, convicted of, or adjudicated delinquent for cannabis-related offenses eligible for expungement, including cannabis possession up to 500 grams or intent to deliver up to 30 grams.
- Have a parent, child, or spouse that has been arrested for, convicted of, or adjudicated delinquent for cannabis-related offenses eligible for expungement, including possession up to 500 grams or intent to deliver up to 30 grams.
- Has more than 10 full-time employees, and more than half of those employees:
- Currently reside in a disproportionately impacted area.
- Have been arrested for, convicted of, or adjudicated delinquent for cannabis-related offenses eligible for expungement, including cannabis possession up to 500 grams or intent to deliver up to 30 grams.
- Have a parent, child, or spouse that has been arrested for, convicted of, or adjudicated delinquent for cannabis-related offenses eligible for expungement, including possession up to 500 grams or intent to deliver up to 30 grams.
In addition to the above, other criteria will be considered for qualification for a loan, including business plans, financial details, operational and compliance information, and need. While the interest rates for all loans will be below market rate, the specific rate, size and duration of each loan will be determined on a case-by-case basis. Successful applicants will receive pre-approval for a Cannabis Social Equity Loan, conditional on receipt of a license.
In addition to releasing the application for low-interest loans for social equity applicants for cannabis licenses, DCEO is continuing to partner with the Community Enterprise and Solidarity Economy Clinic at the John Marshall Law School to offer technical assistance. Through this partnership, social equity applicants are receiving additional help with understanding licensing requirements, preparing business, security, operational plans and other important elements of running a cannabis business. The clinic has already conducted multiple community workshops across the state to educate potential social equity applicants on the cannabis industry.