What if my friend Ganja wants to go legit—how does somebody get into the dispensary or cultivation business?
Good question. I hope you’ve got a lot of time and money.
First of all, there are a ton of regulations for sellers and growers. Each “principal agent” and board member has to pass a background check and submit to fingerprinting, and no one can have a past drug offense. The names of all investors and owners in cultivation facilities also have to be provided to the state.
Plus, all marijuana facilities have to provide detailed security plans and set up systems for tracking every leaf and bud that’s produced or sold; for cultivation centers, this includes “all cannabis byproduct, scrap, and harvested cannabis not intended for distribution.” The facilities have to be open to random inspection from state officials, including the police.
Dispensaries can’t be located within 1,000 feet of a school, and cultivation centers have to stay at least 2,500 feet away from schools or residential areas—all but ensuring none will open in the city of Chicago.
And then there are licensing fees.
How much are we talking?
The amounts haven’t been determined yet, but the law states that the medical marijuana program has to pay for itself. That means the costs of regulation, oversight, and administration must be covered with fees.
That’s not unusual—but it amounts to a high price for a license. In Massachusetts, for example, it costs $50,000 a year for a dispensary license.
So you’ll need a lot of money and a clean record to grow and sell legally.
More money than you’re thinking. “We get calls from people who say, ‘I love cannabis plants and I want to get in.’ So we say, ‘Do you have a million dollars?'” says Adam Bierman, the president of MedMen, a California-based cannabis consulting firm. “A lot of people like to play golf, but that doesn’t mean they should build golf courses.”
Bierman estimates that serious entrepreneurs should have access to at least $250,000 in capital to start a dispensary and $1 million for a cultivation center. And it has to be money they have on hand or can raise through friends and investors. Because cannabis is still prohibited under federal law, banks won’t lend to growers or sellers, and landlords are often leery of renting space. The security costs are far greater than for traditional retail or agricultural businesses.
And there’s at least one other qualification: “You have to get somebody who’s pretty ballsy,” says an owner of a Michigan dispensary.
That’s because the Illinois law expires in four years. Entrepreneurs could pour all kinds of time and money into a cannabis business, only to have the program disappear before they’ve made their money back.
Oh—and that federal law thing. There’s always the chance you could be arrested for participating in a drug conspiracy and sentenced to federal prison.
Surely President Obama wouldn’t let that happen in his home state.
It’s not that clear—and please don’t call me Shirley.
The Illinois law asserts that “states are not required to enforce federal law” and that “compliance with this Act does not put the State of Illinois in violation of federal law.”
That’s cool.
Yes, but it doesn’t necessarily protect medical cannabis users, sellers, and growers.