There’s been little word from Illinois’ first social equity dispensary licensees since they got their licenses from the state in late summer 2022. Although dozens of license winners attended Grown In’s Cannabis Business Conferences in September 2022, one cultivator told us that it’s been, “Very quiet out there.”
Illinois is one of the nation’s most lucrative cannabis markets, with just 110 dispensaries that are making $160 million in sales a month. With those kinds of numbers, one would expect dispensary license holders to move as quickly as possible to get a store open.
So, we checked in with a group of license winners to learn about where they are in the process – and how soon we might begin to expect new dispensaries to open up.
Star Buds: Aiming to be the first
With one of Illinois’ first craft grow locations already operating, Ahmad Joudeh is barrelling ahead with his company’s first Illinois dispensary.
“We are in the build out phase now. Once we got awarded our conditional license [in July], we closed on our property in Burbank, Illinois and we didn’t hesitate. We started construction right away,” he said.
Joudeh and his team are the majority owners of the dispensary license, with investment and operational support from Colorado-based Star Buds. The home team, which is mostly from Chicago’s South Side, looked for a location near home, but wanted to avoid the bureaucratic demands of the city, so they chose Burbank, a town of about 30,000 in Chicago’s southwest suburbs.
“We stayed out of the City of Chicago. The zoning is very difficult, whereas the city of Burbank was very open arms with us. They loved the knowledge we brought to the city, they loved that we bought a very old building and rehabbed it and made it modern,” he said.
So far the Illinois Star Buds team has avoided significant supply chain problems with their construction process, which has been made easier since they are just doing a rehab. Plus, the operational help from their investors has made a big difference.
Star Buds is, “helping with POS and designs. The only hurdles I can think of are from [state regulators] IDFPR for inspections and the timing of them coming out for inspection. But they’ve been very helpful so far.”
Joudeh is optimistic they can get construction completed and shelves stocked quickly. “We’re hopefully launching by New Year’s!”
Umi: The long route through the city
It was a no-brainer for Akele Parnell and his team whether or not they would have a store in the city.
“Chicago is my homebase, I live in Chicago. I shop in Chicago dispensaries. The brand building opportunities are much bigger than in the suburbs,” said Parnell. “Ultimately I wanted a dispensary in a place where I can, and my friends can go there. It’s just [that] opportunity in Chicago is greater for someone who lives in Chicago.”
An attorney for cannabis delivery company Lantern by day, Parnell was prepared for how complex the city’s approval process would be: First meetings with the local Alderman, then required community meetings, then a zoning change approved by City Council, and then a special use permit approved by the city’s Zoning Board of Appeals.
The Umi (the name is Arabic for “Mother”) team signed a lease for a defunct diner in Chicago’s ritzy Lincoln Park neighborhood in March, and immediately began meeting with local community groups, the district police commander, and neighborhood chamber of commerce, all in anticipation of officially getting their license in July. Now, with the support of the Alderman, they’re waiting for the City Council to approve the zoning change. But with all that, they might not get zoning and special use permits arranged by January or February 2023.
“We’d be the first dispensary in Lincoln Park,” said Parnell. “I think it’s important that it be an independent social equity operator.”
Once Umi gets city approval, they expect construction to take about six months, with drawings already completed and contractors lined up.
“We’ve been holding the location since March. Can’t do that forever. We definitely need to get through the process.”
Indus365: A new-build dispensary and craft grow
Krishna Balakrishnan is an experienced real estate developer in Central Illinois, so building a greenfield facility doesn’t phase him. And while he’d been expecting to get a dispensary license for some time, the craft grow license was an unexpected bonus after an unexpected disappointment.
Balakrishnan’s Indus365 company had originally arranged a property for the dispensary, but that didn’t work out.
“We had a location locked prior [to this]. The owner had held it [for us] for two years, but due to the delays had to let it go,” Balakrishnan said, referring to the over two year wait between when Illinois dispensary applications were first submitted in January 2020, and when they were finally awarded in July 2022.
But now that he has a craft grow license as well, he’s building out a combination craft grow and dispensary location in tiny Harristown (population 1,310) in central Illinois, next to Decatur, the former corporate headquarters of corporate agribusiness giant ADM. Decatur opted out of allowing cannabis businesses, and the geographic region Indus365 won a dispensary license for requires him to site somewhere in the county surrounding Decatur.
Now, Balakrishnan is building a location from the ground up for the two licenses to be next to each other. So far the village of Harrisfield has been helpful in getting the business built.
“There’s a lot of different moving pieces when you’re doing a ground up. We’re putting in water, sewer, and working with the utility companies. That’s the majority of the delays,” he said.
He’s hired an architect from California that’s experienced with designing cultivation and dispensaries, and Balakrishnan expects when he gets to putting in electric for the craft grow, he’ll hit supply chain delays. But for now, the dispensary is the priority.
“If it was up to us, we’d like to open first quarter next year. It might be delayed but we think we’ll open by second quarter for the dispensary. The priority is getting the dispensary up and running. For the craft grow it might take until the next year,” he said.
“We’re all pretty excited and nervous. You don’t control a lot of things, especially when you’re going against the timeline.”