Starting out, Illinois craft grow license holder Louie Boulahanis and his team at Herold & Moss Management LLC were elated to be named among the first of the original licensees to be approved but faces challenges as he moves forward.
“Realistically, it was obviously great news to hear our group Harold & Moss Management LLC won a license,” said Boulahanis, Herold & Moss CEO. “We are switching into moss grown specifically. It was extremely exciting that we were going to be part of this legacy market in Illinois being the first of the original licensures to be approved. It was just a treasure trove of excitement. I feel like every member of my team specifically has just been wanting to work in this space. It’s a great way to give back really is how we looked at it.”
Fast forward to now, it’s been a pathway of hiccups and bumps in the road, he added.
“There’s just always some type of issue,” Boulahanis explained. “The hardest part, to get something like this and any other business, is that it takes money. With no warehouse location already being built out for craft grows specifications because it just wasn’t legal…So, there are no places to actually cultivate. The ask is a very high amount of money to do this appropriately. So, it’s very hard to remain as a social equity applicant at 51% when you’re asking for a decent amount of financing to do the build out and to make this a realistic play.
“It’s hard to pay rent on stuff and still try to raise money to get this done appropriately.”
One good thing is that his team has good relationships in the finance world, he said.
“I have secured the financing but other groups… I deal with about 10 different craft grows in Illinois that don’t know where to even start. I feel bad for them because they are kind of just sitting ducks on paying rent. They don’t have anyone even thinking about giving them the money.”
Grown In reported earlier this week that Ambrose Jackson, president, and CEO of Helios Labs was lucky enough to obtain his Illinois license in the August craft grow lottery before another round of litigation held up awards, and that he and his team face challenges getting his craft grow operation with a focus on small batch, high quality cannabis, off the ground.
Two years later after Illinois’ January 2019 adult-use launch and over $2.6 billion in retail sales, craft grow social equity license holders are still waiting for release of low-interest from the state’s Social Equity Cannabis Loan Program, Jackson said in the Grown In earlier interview,
“The biggest challenge is raising capital giving the canopy restrictions on craft grow business,” said Akele Parnell, CEO of Eleventh Level, Inc. also one of 40 to receive an Illinois craft grow license so far. “Right now, the canopy restriction is that you start at 5,000 sq. ft. of flower. You can go up from there, but you have to get started first. That’s not enough when you’re trying to raise capital and find investors.”
With the capital he was able to raise, Parnell was able to purchase a space for his craft grow business and is now working to close that real estate transaction.
Parnell is another applicant in line for the Social Equity Cannabis Loan Program.
“We asked for a timeline for when they would give the awards, but they said they didn’t know,” Parnell explained. “We received some more correspondence from the state this week that they are still reviewing applications.”