Updated on October 23, 2019.
On June 25, 2019, Illinois made history by becoming the 11th state to legalize recreational cannabis — and the first state to do so through legislation rather than a ballot initiative. Under the state’s Cannabis Regulation and Tax Act, adults aged 21 and older will be allowed to purchase recreational cannabis products beginning January 1, 2020.
Currently, there are 55 licensed medical marijuana dispensaries throughout Illinois, as medical marijuana has been legal in the state since 2014. The new law allows these 55 dispensaries to apply for early approval adult-use retail licenses, which would allow them to begin selling recreational cannabis from their medical dispensary locations. Additionally, these dispensaries may apply to open a second retail location.
Illinois will also issue up to 75 new adult-use cannabis retail licenses to applicants by May 1, 2020. Applications for a conditional adult-use cannabis retail license are now available on the Illinois Department of Financial and Professional Regulation (IDFPR) website. These are due no later than January 1, 2020.
Below, we’ve answered as many questions as possible regarding cannabis retail and dispensary laws in Illinois, and we will update this page regularly as new information becomes available.
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Currently, only qualifying patients holding a valid Medical Cannabis Patient ID card and their registered caregivers may purchase medical marijuana in Illinois.
Beginning January 1, 2020, adults aged 21 and older will be able to purchase cannabis from licensed retailers in Illinois.
Yes. The list of debilitating conditions that qualify for medical marijuana in Illinois can be found here on the Illinois Department of Public Health website.
The Illinois Department of Financial and Professional Regulation (IDFPR).
Under the new legislation, currently licensed medical cannabis dispensing organizations may apply for an Early Approval Adult Use Dispensing Organization License, which would allow them to sell cannabis products to adults aged 21 and older beginning January 1, 2020.
To apply, currently licensed dispensing organizations must submit a complete application, along with:
More information on Early Approval Adult Use Dispensing Organization Licenses can be found here.
Additionally, the state will issue up to 75 Conditional Adult Use Dispensing Organization Licenses by May 1, 2020. Per legislation, applications for adult-use dispensaries will be available no later than October 1, 2019, and the DFPR must begin accepting applications by January 1, 2020.
Applications for a Conditional Adult-Use Dispensing Organization License are now available through the IDFPR website and due by January 1, 2020. Applications will be ranked using a scoring system, and up to 75 conditional licenses will be issued no later than May 1, 2020.
If you are approved for a conditional license, you will have 180 days to find a suitable location within your licensed region, and must pass an inspection by the department before you can obtain or sell cannabis.
For a regular (non-Social Equity) applicant, there is a non-refundable application fee of $5000. If approved, the cost for an Adult Use Dispensing Organization License is $60,000 for 2 years.
For applicants who meet the Social Equity criteria, the application fee is $2,500, and the cost of an approved 2-year license is $30,0000.
Learn how to remain compliant with Illinois cannabis retail laws.
In order to ensure geographical dispersion of adult-use cannabis dispensaries, Illinois has divided the available 75 adult-use retail licenses among the 17 Bureau of Labor Statistics (BLS) Regions within the state. This means that, if approved for an adult-use dispensary license, you must locate your dispensary within the BLS Region identified on your application.
Once approved for a license, you will have 180 days to identify a physical location for your retail storefront. The location must be suitable for public access; have a layout that promotes the safe dispensing of cannabis; and be sufficient in size, power allocation, lighting, parking, hadicapped accessible parking spaces, accessible entry and exits as required by the Americans with Disabilities Act, product handling, and storage. Additionally, the location must not be within 1,500 feet of an existing dispensing location.
Early Approval Adult Use Dispensing Organization License holders opening their second site may locate it within any BLS Region that intersects with their medical cannabis dispensary’s Dispensing Organization District. The site may not be located within 1,500 feet of another adult-use dispensary.
Before selling any cannabis or cannabis products, dispensary staff must:
Verify the age of the purchaser by checking a valid government-issued ID card by use of an electronic scanner
Offer any appropriate purchaser education or support materials
Enter the required information into the state’s electronic verification system, including dispensary’s ID number, the dispensing agent’s ID number, the amount and type of cannabis or cannabis-infused product being sold, and the date and time of the sale
Qualifying registered medical marijuana patients in Illinois may purchase up to 2.5 ounces of cannabis flower every 14 days. For concentrates, edibles, or other non-flower cannabis products, the pre-weight of the cannabis flower used to make the product counts toward the purchase limit.
Dispensaries cannot sell:
Any product containing alcohol except tinctures, which are limited to containers no larger than 100 milliliters
Clones or other live plant material
Cannabis, cannabis concentrate, or cannabis-infused products in combination or bundled with each other for one price
Illinois is imposing a tiered tax rate on cannabis products, based on the THC content of the product. The tax rate for cannabis products is as follows:
Additionally, the regular state sales tax of 6.25 percent will apply, along with local taxes of up to 3.5 percent.
Cannabis businesses in Illinois may not engage in advertising that:
Additionally, no cannabis business may advertise cannabis or cannabis products in any form:
Cannabis businesses, including retailers, are also prohibited from promoting the sale of cannabis products by giving away cannabis or cannabis products, conducting games or competitions related to consumption, or by providing promotional materials or activities that would be appealing to children.
Dispensaries may operate between the hours of 6:00 a.m. and 10:00 p.m. Additionally, operation is prohibited under the following circumstances:
When video surveillance equipment is inoperative
When point-of-sale equipment is inoperative
When the state’s electronic verification system is inoperative
When there are fewer than two people working in the dispensary
Illinois cannabis retailers must establish an account with the state’s verification system that documents:
Cannabis retailers in Illinois must have an inventory control and point of sale system that is real-time, web-based, and accessible by the state at any time. Additionally, retailers must conduct a daily inventory reconciliation, documenting and balancing cannabis inventory by confirming that the state’s verification system matches the dispensary’s point of sale system and the amount of physical product at the dispensary.
BioTrackTHC provides statewide cannabis verification and monitoring in Illinois.
Yes. Cova’s dispensary point of sale and inventory management system includes all the features needed to keep Illinois dispensaries compliant, including:
First, no advertisements for anything cannabis-related can be attractive to minors (no cartoon characters or public figures appealing to a younger age group) or promote underage or out-of-state consumption. Second, no product can claim any therapeutic or curative effects. Lastly, any cannabis advertisement must include the following government warnings:
"This product has intoxicating effects and may be habit forming.";
"Marijuana can impair concentration, coordination, and judgment. Do not operate a vehicle or machinery under the influence of this drug.";
"There may be health risks associated with consumption of this product."; and
"For use only by adults twenty-one and older. Keep out of the reach of children.”
Each licensed retail location can have two signs at their location with their business name or trade name. These signs cannot be larger than 1,600 square feet (measured from the outer frame). No signs can be on the road pointing in the direction of the dispensary, they can only be affixed or hanging from the building or windows of the actual storefront.
The signs can include the business name, location and identify the nature of the business. It cannot have any photos or depictions of cannabis and it cannot be appealing to minors.
A cannabis dispensary can advertise on billboards with some restrictions. First, the billboard can only contain the same information as signage on the storefront (i.e., name of business, address and nature of business). It cannot contain any photos or depictions of the cannabis plant (this includes any logo with a cannabis leaf) or appeal to minors. No matter the design, the billboard must say that cannabis can only be purchased and possessed by adults over 21 years old.
No, dispensaries cannot give away any product or coupons. They can, however, encourage customers to sign up for an email or text list and offer specials that way.
No, a dispensary is only allowed to sell legal cannabis products and paraphernalia. But branded merchandise for a dispensary can be sold on their website or through a separate entity.
Yes, a dispensary is allowed to advertise in print publications, but with a few restrictions. The publication cannot target or distribute to an audience out of state or underage. And the content of the advertisement must follow the same rules as billboards and signage (no cannabis depictions or photos, cartoon characters or anything appealing to minors and must include government warnings). Local jurisdictions are able to establish additional advertising rules, so always check for relevant local laws.
A retail cannabis business can have a website, but it cannot appeal to or solicit anyone under the age of 21. You can sell branded non-cannabis merchandise on your website, but all cannabis products must be purchased in store.
Yes, a dispensary can host or sponsor an event, but only if attendees are over 21 years old. They cannot have product on hand, neither as a free gift or sold.
Rules and regulations regarding advertising for Washington cannabis companies are constantly changing. You can view the WSLCB’s Q&A on advertising here.
Cova POS software provides complete seed-to-sale tracking functionality and has a number of built-in features designed to help you automatically comply with the legal regulations in your state/province. For example, the Cova POS system automatically monitors:
To ensure that you always maintain an expedient transaction pace and keep lines moving, Cova comes with a built-in offline sales processing mode that enables continuous access to critical functions even when your Wi-Fi or internet connection is unavailable. Once connectivity is restored, all transactions performed in offline mode are synchronized with the state’s reporting system, data is backed up, and reports and inventory records are adjusted accordingly.
By choosing a POS system with built-in tax reporting functionality, you’ll always know exactly how much tax you need to pay.
There are several reasons why a cannabis-specific POS is ideal for your operation—but the most important one is compliance management. Because traditional retail operations and pharmacies don’t have the same government-mandated compliance requirements, their POS systems aren’t built to manage the complexities involved with track and trace reporting and the other aspects of state compliance.
With the industry still in its infancy, regulations are bound to change. At Cova, our team keeps up with industry-wide and state-specific changes so that our developers can quickly made necessary software updates—and so you never have to worry about remaining compliant with the latest regulations.
Absolutely! Cova software is built on technology that has the ability to dynamically scale with your needs. Microsoft’s Cloud Computing Platform, Azure, automatically detects instances of heavy traffic (such as sales on 4/20) and assigns further servers and computing power as necessary to compensate—allowing you to process sales without interruption, even during the busiest retail periods.
Although technically you are not mandated to comply with the new law and regulations until July, it’s a good idea to implement a compliant POS now so you don’t have to switch later.
With Cova, you can easily stay compliant with California’s inventory reconciliation requirement by printing the Inventory-on-hand report and checking it against your physical inventory. You can make any necessary adjustments directly into the POS, which will then sync the data across your network.
Cannabis Business Lawyer & Founding Partner, Segev LLP
Ron Segev is the founding partner of Segev LLP. A practical-minded business lawyer with expertise in the cannabis industry, he represents cultivators, dispensaries, CBD extractors, oil extractors, food processors, media and marketing companies, consultancies, and other businesses in the legal cannabis market.