The number of independent dispensaries in Illinois is dwindling through either purchases by large multi-state operators, or by becoming vertically-integrated with cultivators through mergers and acquisitions. Today, Illinois has only eight independent dispensary owners, down from more than a dozen last summer, and almost twenty in late 2019, before recreational use was legalized. While Illinois is on pace to have almost 100 dispensaries operating by the end of March, those are mostly consolidated in the hands of a few large vertically-integrated operators.
Illinois has only 21 cultivation licenses, controlled by 18 licensees, which essentially places control of Illinois’ legal cannabis market into a small group of players. And yet, independent dispensary owners tell Grown In that the system is working pretty well for them.
“There were problems four to six months ago but now the state’s at a good spot, supply wise,” said THC Center’s general manager Michael Mandera. “Everyone would like more product but I haven’t felt lately that I’m not comfortable with the amount I’m offering my customers.”
Mandera was referring to a brief insurrection among independent dispensary owners, where, feeling supply pressures from cultivators, they pushed for a new state law that would control distribution of product. That law died in Springfield under lobbying pressure from large multi-state operators.
“Unfortunately, the independents don’t have any control,” said independent dispensary owner Christine Wildrick last May. “It went from us, the dispensaries working with a cultivator in determining what our order would entail, to where now it’s flipped to where a cultivator says, ‘This is what we’re going to give you.’”
Things have changed since then, said Hatched Dispensary co-owner Gary Leff.
“Six to twelve months ago it looked pretty grim in terms of being able to get product, because we have two disadvantages, we don’t have our own product, and there’s an incentive for vertically-integrated dispensaries to sell as much of their own product to capture that margin,” said Leff.
“But over the last six months the situation has gotten much better in terms of getting product. While we’re not getting everything we need, we’re not getting shut out. It feels like it’s getting better. That’s probably a result of not a lot of dispensaries opening and more [cultivation] capacity coming online.”
The State of Illinois does not report cultivator canopy, but many cultivators privately discuss plans to expand to their legally allotted 120,000 indoor square feet per license.
But even then, certain products, particularly high quality, smokable flower, are in high demand.
“When we put in an order, we don’t get what we want. When we buy flower, it’s not just flower,” said Leff. “There’s an art to all of it.You have 8 week cycles, but the flower is different every week that’s coming out of their grow rooms.”
Independent dispensaries have been under intense, growing pressures over the last year, as their numbers dwindle and the state has delayed awarding craft grow licenses by over seven months. But, even if all 40 of the first set of craft grow licensees were operating today and able to expand to their maximum canopy of 15,000 indoor square feet, that total of 600,000 square feet would only equal the combined total possible Illinois canopy of Cresco Labs and Green Thumb Industries, two of Illinois’ largest growers.
Even so, dispensary owners are looking forward to craft growers bringing more high quality flower to the market, which is always in high demand, they say.
“I think you’ll see some of these craft growers push the boundaries,” said Mandera, whose store specializes in a wide variety of product. “They’ll get a little bolder, more fun, [and] allow independents to receive more product. I’m really hoping we’ll see some different lines of products, different strains.”
