ILLINOIS: IDFPR Announces Approval Of Permanent Rules For Conditional Adult-Use Cannabis Dispensary Licenses Tie-breaking Process

Illinois Joint Committee on Administrative Rules Approves Tiebreaker Rules; Dispensary Licenses to be Issued in Coming Weeks

ILLINOIS: The Illinois Department of Financial and Professional Regulation (IDFPR) announced today that permanent rules have been adopted for adult use cannabis dispensary licensees to be selected when there are two or more applicants in the same Bureau of Labor Statistics Regions with tied high scores. The rules, which were filed in June, may be found here.

The approval of these rules allows IDFPR to move forward in awarding the 75 conditional adult use cannabis dispensary licenses that were authorized by the 2019 Cannabis Regulation and Tax Act. Consistent with the new rules, IDFPR will provide a public notice announcing the applicants with tied high scores who, if they meet the requirements in the rules, may participate in the selection process for a conditional license.

“We are pleased that these rules have been adopted, and we remain unwavering in our commitment to ensuring these licenses are issued in a fair and objective way that implements Illinois’ equity-centric law,” said Toi Hutchinson, Senior Advisor for Cannabis Control to Gov. Pritzker. “Additional licenses will be made available in the coming years and these rules will help ensure a strong foundation is established for the licensing process in the future.”

Once IDFPR awards a conditional license, the licensee will have 180 days to find a location within its BLS Region to operate. A license to operate cannot be issued if the location is within 1,500 feet of an existing licensed dispensing organization. More about the awarding of the conditional adult use dispensing organization licenses may be found under 410 ILCS 705/15-25 and 15-30 of the Cannabis Regulation and Tax Act.

In addition, application scoring for craft grower, infuser and transporter licenses is being finalized, and the Illinois Department of Agriculture will announce award dates in the near future.

Surna Announces Largest Contract In Its History

Announces $2.8 million Sales Contract in July

COLORADO: Surna announced today that it recently signed a sales contract valued at $2.8 million.

The project in Illinois is for a multi-state operator with whom Surna has worked on previous facilities in other states. The facility is approximately 88,000 square feet, of which approximately 66,000 square feet is dedicated to cultivation, drying and processing areas. Surna is under contract to provide a full suite of climate control products and technologies for the cultivation and processing spaces (the mechanical engineering design was done by Surna through a previous contract), supply of major mechanical equipment, SentryIQ environmental controls, and system start-up. While Surna can and does provide MEP design and equipment for a wide range of climate control approaches, in this case the priorities of reducing electrical infrastructure requirements and reducing roof loading, along with the desire for precise control of the facility’s environment, resulted in the selection of a 4-pipe hydronic system. The design has integrated dehumidification, in which Surna is providing its proprietary line of multi-function fan coils, destratification fans, dehumidifiers and heat recovery chillers.

Tony McDonald, CEO commented: “The team at Surna has worked diligently to secure the largest single contract in the Company’s history. Now our operations and controls departments will be hard at work ensuring the delivery of a precisely controlled environment and on-time delivery of equipment to meet our customer’s requirements.”

Pritzker Administration Announces Fourth Month Sales Totals For Illinois Adult Use Cannabis

State’s new adult-use cannabis industry generated more than $37 million in sales in April

ILLINOIS: The Illinois Department of Financial and Professional Regulation has announced preliminary numbers show statewide adult-use cannabis sales in April totaled $37,260,497.89. Dispensaries across the state sold 818,954 items over the 30-day period. Sales to Illinois residents totaled $29,735,650.41, while sales to out-of-state residents totaled $7,524,847.47. These figures do not include taxes collected. A portion of every cannabis sale will be reinvested in communities harmed most by the failed war on drugs.

Medical and adult use cannabis dispensaries remain open as part of the essential businesses and operations named in Governor Pritzker’s executive order signed on March 20, 2020. Both sides of the cannabis industry were included to ensure the cannabis supplier industry protects medical cannabis patients during the COVID-19 pandemic. Additionally, the revenue generated by adultuse cannabis sales funds the important social justice and equity goals at the core of Illinois’ adult-use law.

“Our top priority is to ensure consumers are safe when they go to a dispensary to purchase cannabis,” said Toi Hutchinson, Senior Advisor for Cannabis Control to Gov. Pritzker. “The steps we’ve taken to increase social distancing at dispensaries are accomplishing that, while also enabling this new industry to continue to grow. As such, curbside pickup will remain an option for medical cannabis users to obtain the product they need through May 30.”

Dispensaries are permitted to sell medical cannabis outside of their limited access area on their property or on a public walkway or curb adjacent to the dispensary. Medical cannabis patients will be able to continue to utilize their designated caregiver to purchase medicine for them. However, dispensaries may not deliver medical cannabis to a patient or caregiver’s home. These rules do not apply to adult-use cannabis sales; those must still take place inside the limited access area. A complete list of the rules extended may be found here.

Illinois: Pritzker Administration Releases 2019 Hemp Harvest Numbers

ILLINOIS: The Illinois Department of Agriculture (IDOA) has released final harvest numbers from the 2019 hemp growing season. IDOA issued 651 Hemp Growers licenses for the 2019 season. All but 137 of those licensees planted at least an acre during the inaugural season resulting in over 2.27 million pounds of total yield, with 73% of acres planted being harvested.

“We are encouraged by these yield numbers and optimistic for the 2020 growing season,” said Jerry Costello, IDOA Acting Director.  “The Department has been diligently working to open markets for growers to sell their hemp.  We recently developed a policy allowing licensed hemp growers to sell product to licensed cannabis cultivators for use in medical and adult-use cannabis products.”

Harvest numbers have been broken down into four distinct categories and a fifth to account for undefined variables in reporting.  Farmers reported harvesting 1,482,489 pounds of Biomass, 595,128 pounds of flower, 65,489 pounds of seed and 15,107 pounds of stalk.  Biomass and flower are typically used for their CBD oil, stalks for industrial uses, and seed will be planted this year or used for hemp seed oil.

The Illinois Department of Agriculture is currently accepting applications for the 2020 Hemp growing season.  If you are interested in growing or processing hemp, please visit our website.

Illinois: Pritzker Administration Announces Revenue Figures For First Month Of Adult Use Cannabis

Screenshot 2020-02-25 16.04.04

ILLINOIS: The Illinois Department of Revenue announced that adult-use cannabis sales generated $7,332,058 in cannabis tax revenue during the month of January, with an additional $3,147,928.29 generated in retail sales tax revenue. Governor Pritzker’s recently released budget conservatively estimated the state would collect $28 million in cannabis tax revenue during the remainder of the fiscal year, ending June 30, 2020. Today’s announcement puts the state on track to surpass that estimate.

Once administrative fees are accounted for, 45% of the adult-use cannabis tax revenue will be reinvested in communities disproportionately impacted by the failed war on drugs and used to fund substance abuse and mental health programs. The $3,147,928.29 in sales tax revenue will be divided between the state’s general revenue fund and the local governments where purchases were made.

“Today marks another milestone in the successful launch of Illinois’ legal cannabis industry. Our goal has been to build the nation’s most socially equitable program that includes new opportunities for the communities most harmed by the failed war on drugs. Revenue raised in this first month will soon begin flowing back into those communities to begin repairing the damage done by the failed policies of the past and creating new opportunities for those who have been left behind for far too long,” said Toi Hutchinson, Senior Advisor to Governor Pritzker for Cannabis Control.

The state collects cannabis revenue in two ways: a variable excise rate dependent on THC potency and type of product, and a 7% cultivators excise tax imposed on the sale of cannabis to retailers. Earlier this month, the state announced that over $39 million in adult-use cannabis product was sold at retail stores.

Last Wednesday, Governor Pritzker released his Fiscal Year 2021 budget, which projected cannabis sales would generate $28 million in cannabis tax revenue for the remainder of Fiscal Year 2020 (ending June 30, 2020). As the industry matures, revenues are estimated to grow to $127 million in FY21, of which $46 million will go to General Funds.

Background:

CANNABIS TAX RATES

• Cannabis Cultivation Privilege Tax:

o 7% of the gross receipts from the sale of cannabis by a cultivator or a craft grower to a dispensing organization

• Cannabis Purchaser Excise Tax:

o 10% of the purchase price – Cannabis with a THC level at or below 35%
o 20% of the purchase price – All cannabis infused products
o 25% of the purchase price – Cannabis with a THC level above 35%
o This tax is not imposed on cannabis that is subject to tax under the Compassionate Use of Medical Cannabis Pilot Program Act.

ALLOCATION OF STATE REVENUE

• Minus administrative costs, the remaining state revenue will be allocated as follows:

o 35% for the General Revenue Fund,
o 25% for the Criminal Justice Information Projects Fund to support the R3 program,
o 20% for the Department of Human Services Community Services Fund to address substance abuse and prevention, and mental health concerns,
o 10% for the Budget Stabilization Fund to pay the backlog of unpaid bills,
o 8% for the Local Government Distributive Fund to support crime prevention programs, training, and interdiction efforts, including detection, enforcement, and prevention efforts, relating to the illegal cannabis market and driving under the influence of cannabis, and
o 2% for the Drug Treatment Fund to fund public education campaigns and to support data collection and analysis of the public health impacts of legalizing the recreational use of cannabis.

Cresco Labs Names Former Molson Coors Marketing Executive Greg Butler Chief Commercial Office

ILLINOIS: Cresco Labs, one of the largest vertically integrated multi-state cannabis operators in the United States, today announced a high-profile leadership hire to support its steadfast commitment to building the most important cannabis company in the U.S. Greg Butler joins Cresco Labs as its first Chief Commercial Officer. Greg brings to Cresco Labs a strong background in driving brand growth for top-tier CPG companies including Pfizer, Johnson & Johnson and Molson Coors, wellness retail execution for Walgreens, and business growth and capital management strategic advising for leading private equity portfolio companies.

In this newly created position, Greg is responsible for demand and commercial strategic planning, bolstering Cresco Labs’ sales and marketing teams with top talent, leading the launch of all new products and innovation, brand M&A and integration, and driving enterprise strategies to deliver on the company’s vision to be the most important cannabis company in the U.S. among patients, customers, consumers and industry stakeholders.

“One of the key components of our success is the ability to strategically curate a leadership team with both institutional expertise and the highest caliber of subject matter experts across different industries—from retail to healthcare to beer to CPG,” said Charles Bachtell, CEO of Cresco Labs. “Greg has a remarkable general management pedigree and an impeccable reputation from his work driving growth for the world’s most iconic brands. Cannabis is an industry where his background in patient marketing, wellness retail, corporate planning and traditional CPG brand building are all necessary to deliver growth, and I couldn’t be more pleased to add these capabilities to our arsenal for driving long-term value. Greg’s addition strengthens an already accomplished team that’s well positioned to usher in the next generation of normalized and professionalized cannabis.”

After a year serving as Operating Partner at MNML Ventures, an affiliate of Cresco Labs, Greg has stepped into a full-time CCO role to continue to execute the long-term growth plan that has already delivered significant results. He led the creation of a pioneering occasion-based portfolio strategy, relaunched seven cannabis brands with new brand positionings, identities and packaging design, oversaw the creation of a multi-year innovation pipeline, and drove the concepting and launch of the national Sunnyside* retail brand. He also helped reshape Cresco Labs’ robust marketing, retail operations and sales teams that are made up of notable hires from Apple, Starbucks, PepsiCo and Red Bull.

“The results of Greg’s leadership speak for themselves,” says Tom Manning, Chairman of the Cresco Labs Board of Directors. “He oversaw the Miller portfolio and developed a commercial strategy for the billion-dollar Miller Lite brand, delivering 13 quarters of sustained growth after years of declining sales. He also has launched innovation consumer campaigns for global brands that drove share growth and has won a wide range of awards from the Cannes Lions International Festival of Creativity to the Effie Awards.”

Greg graduated from Queen’s University and received his MBA from Harvard Business School.

“Throughout my career, I’m most energized by the opportunity to support the entrepreneurism of small companies in hyper-growth mode with the discipline and proven strategies of large CPG brands. After my first conversation with Charlie about his vision for Cresco Labs, I knew the opportunity to help navigate its strategic growth was the perfect fit,” said Butler. “Cresco Labs is reimagining the way consumers and patients look at the cannabis industry, and I’m excited to be part of its extraordinary mission and enhance the impact the company has already made.

Cresco Labs Makes History On January 1st With First Sale Of Adult-Use Cannabis In Illinois

ILLINOIS: Cresco Labs, one of the largest vertically integrated multistate cannabis operators in the United States, announced today that the Company served 3,145 people on New Year’s Day at its five Sunnyside* Dispensaries located in Lakeview, Elmwood Park, Champaign, Buffalo Grove and Rockford, Illinois. Sunnyside* also sold 9,258 cannabis products, including Cresco’s house of brands and items from other Illinois suppliers, with an average ticket price totaling $135.

Customers began to form lines outside Sunnyside* locations as early as 8 PM on New Year’s Eve, and lines wrapped around the buildings throughout the day as recreational customers showed their excitement to be part of this historic day. The dispensaries opened at 6 AM to immediately start serving recreational customers, with the first sale in the state of Illinois taking place shortly thereafter at Sunnyside* Lakeview. Jacqueline Ryan from Forest Park was the first customer to purchase adult-use cannabis, followed by siblings Elise and Aaron Swopes, two participants in Cresco’s Chicago incubator program, which is part of the Company’s SEED (Social Equity and Educational Development) initiative, and Illinois Lt. Gov. Juliana Stratton, who played a critical role in shaping the state’s cannabis legislation.

“We’re ecstatic for our Sunnyside* dispensaries to begin serving recreational customers on such a historic day that launches a new era of cannabis and the development of an industry that will bring greater justice, social equity and business ownership opportunities throughout the state,” said Charlie Bachtell, Cresco Labs CEO and Co-founder. “With 13 million residents and 100 million annual tourists, Illinois is predicted to be one of the largest recreational cannabis markets in the United States. Cresco is uniquely positioned in the supply-constrained state, with permission for the largest cultivation footprint at 630,000 square feet and ten retail dispensaries, including three in high traffic areas in the city of Chicago.”

Joe Caltabiano, Cresco Labs President and Co-founder, added, “We’re thrilled to be part of this historic day and to witness firsthand so much excitement from people on the first day of legal cannabis sales. Our dispensaries served thousands of customers on day one by educating new cannabis consumers, making product recommendations and making sure they had a seamless shopping experience. With five newly re-concepted Sunnyside* locations and an additional five dispensaries opening soon in high profile locations such as one next to Wrigley Field and two in Chicago’s downtown Central District, we expect to serve thousands more customers in response to strong demand. Our Sunnyside* concept is designed to move traffic efficiently, so despite the fact that long lines will likely continue in the first few days of adult-use legalization, we are positioned to ensure that each of our customers gets only the best possible service and the products they are looking for. Cresco is already the leader in Illinois, and we expect to be able to maintain this leadership position as the recreational cannabis market grows, contributing solidly to our overall revenue and our profitability.”

Cresco Labs Recieves Adult-Use Approval For All Five Existing Illinois Dispensaries

ILLINOIS: Cresco Labs, one of the largest vertically integrated multi-state cannabis operators in the United States, today announced that it has received Early Approval Adult-Use Dispensing Organization Licenses for all five of its existing Illinois medical cannabis dispensaries. Cresco received approval for adult-use cultivation on September 30th making it the only company approved for both adult-use cultivation and adult-use dispensary operations in the state.

“Illinois is Cresco’s home state and with the transition to a legal adult-use market in January of 2020, the state is expected to produce between $2 – 4 billion in sales at maturity (BDS Analytics)i, making this one of the single largest opportunities in the U.S. cannabis space today,” said Charlie Bachtell, Cresco Labs CEO and Co-founder. “Cresco is well-positioned to capture a significant share of this revenue opportunity for shareholders. We have 25% wholesale share of the current medical market, a portfolio of recognized brands and three cultivation facilities that can represent 630,000 square feet at completion, in what is expected to be a supply-constrained market.”

Mr. Bachtell added, “Illinois has put forth a model that will make it one of the most intelligently regulated states in the U.S. and we hope this blueprint will serve as a path for states transitioning over the next few years. Illinois was the first large state to legalize cannabis through legislative processes instead of through referendum. One of the primary reasons the government was able to achieve this was due to its focus on social equity, which is directly aligned with Cresco’s core values and approach to the market.”

Cresco Labs currently has five medical dispensaries in the state of Illinois, including: Phoenix Botanical; MedMar Lakeview; MedMar Rockford; PDI Medical; and FloraMedex. Each of these dispensaries has received approval for adult-use sales. As an existing medical cannabis dispensary operator, the Company will receive an additional adult-use license for each of its current medical dispensaries, which will bring Cresco Labs’ total adult-use footprint to 10 total retail dispensary locations. In July, Cresco Labs announced the formation of a new national retail brand Sunnyside*, a wellness-focused retailer designed to build trust, education and convenience for both existing and new cannabis consumers. All of the Company’s Illinois dispensaries will transition to this new retail concept.

The Company’s three cultivation licenses located in Joliet, Kankakee and Lincoln, can represent a total combined cultivation space at completion of 630,000 square feet per Illinois state regulations.

 

Cresco Labs Receives First Adult-Use Cultivation Approvals Granted In Illinois

ILLINOIS: Cresco Labs, one of the largest vertically integrated multistate cannabis operators in the United States, today announced that its three cultivation facilities in the state of Illinois have been approved for growing adult-use cannabis by the Illinois Department of Agriculture. The three facilities, located in Joliet, Kankakee and Lincoln, can represent a total combined cultivation space at completion of 630,000 square feet per Illinois state regulations.

Cresco-Logo_Blue“We are very pleased to receive the first adult-use cultivation approvals granted in Illinois, which speaks to our continued success in efficiently executing on our strategic priorities,” said Cresco Labs CEO and Co-founder Charlie Bachtell. “The approval of our cultivation facilities is a key milestone in our preparation for the legalization of recreational cannabis in Illinois on January 1, 2020. As the only operator with three cultivation facilities in Illinois – the maximum number allowed in the state – we will have the scale and capacity to effectively capitalize on the dramatic increase in demand for cannabis expected next year. We continue to have the leading share of the Illinois medical-use cannabis market, and we believe the exceptional progress we have made this year to expand our cultivation capacity and retail dispensary network in Illinois will position Cresco Labs to be the market leader in recreational cannabis as well.”

 

Illinois Passes Transformative Adult-Use Cannabis Legalization with Sales Starting January, 2020

ILLINOIS: Cresco Labs Inc., one of the largest vertically integrated multistate cannabis operators in the United States, today provided comments on the legalization of adult-use cannabis in its home state of Illinois. Cresco Labs CEO & Co-Founder Charlie Bachtell served on the Cannabis Legalization Subcommittee of Illinois Governor JB Pritzker’s transition team as the sole representative for cannabis operators in the state.

“The legislation passed today legalizing adult-use cannabis in the state of Illinois beginning in 2020 represents a thoughtful expansion of access to cannabis in Illinois and we expect it will have a positive impact on both social justice issues and from a tax revenue perspective by expanding the employment and ownership opportunities for cannabis businesses in the state,” said Mr. Bachtell. “As the current market leader in the rapidly expanding medical-use cannabis program in the state, we look forward to also serving what will no doubt represent one of the largest adult-use cannabis customer bases in the U.S. The legalization of adult-use cannabis continues to be strongly supported by voters across the country and the legislation passed in Illinois represents a good model for other states to legalize cannabis by statute rather than developing a program only after a ballot initiative is passed. Cresco Labs fundamentally supports legalized and responsible access to cannabis, as we have seen proof of the resulting societal benefits of lowering crime rates and helping curb opioid addiction and fatalities. We’re very excited about the new opportunities adult-use cannabis will bring to Illinois and we’re also anticipating some very beneficial improvements to the existing medical program as well.”

Mr. Bachtell continued, “This legislation also includes important social equity provisions that are close to our collective heart at Cresco Labs. These provisions will enable a broader segment of our population to pursue employment opportunities in the growing cannabis industry. As the first company in the cannabis industry to introduce a comprehensive national social equity & education initiative (SEED), we are fully committed to supporting the social equity provisions within the current legislation. Our team has already taken the initiative to partner with community organizations to hold expungement events, created educational programs for college students on the fundamentals of the cannabis industry and launched a community impact incubator to assist with funding and support for people wanting to own businesses in this emerging industry.”

Illinois Adult-Use Legislation

The legislation passed by the state of Illinois legalizes cannabis for adults 21 years and older, beginning on January 1, 2020. It is forecasted that the Illinois adult-use market will be 10-20 times the size of the state’s medical program.

Illinois is currently the fifth most populous state in the U.S., with a population of nearly 13 million. Cresco Labs currently has a presence in 11 states including four of the five most populous states1.

Impact on Cresco Labs in Illinois

Under Cresco Labs’ current medical-use license in Illinois, it will have the ability to open five additional retail dispensaries for the sale of adult-use cannabis, bringing its total number of dispensaries in the state to 10 and the total cultivation footprint to three facilities, the maximum any one company is permitted to have.

The market share leader in Illinois, Cresco currently distributes its suite of wholesale brands to every dispensary in Illinois:

  • Cresco  an everyday cannabis brand with above-average quality
  • remedi  products designed for the medically-minded patient, with forms similar to traditional pharmaceuticals
  • Reserve – a premium cannabis line
  • Mindy’s Artisanal Edibles  a line of culinary-backed, cannabis-infused edibles created by James Beard Award-winning chef Mindy Segal
  • Mindy’s Kitchen  a line of fun, fruity confections