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Cannabis explainer

Tuesday, Jan 7, 2020

* Sun-Times

At least six Chicago dispensaries are closed to recreational marijuana customers Monday as many retailers grapple with supply issues in the wake of legalization. […]

Jason Erkes, a spokesman for Cresco Labs, said four of the company’s newly rebranded Sunnyside Dispensaries will be closed Monday “to reset and give the staff that has worked five 14-hour days straight a break.” That includes locations in Lake View, Elmwood Park, Rockford and Champaign.

However, Erkes said, the shops will have flower, vapes, concentrates and edibles available when the shops reopen Tuesday.

“There are no product supply shortages — just a shortage of state-approved employees to help efficiently service the hundreds of people that have been showing up every day to make their first legal cannabis purchase in Illinois,” Erkes said.

The reason that company doesn’t have a shortage problem is because it owns three cultivation facilities. It’s vertically integrated. Allowing this practice is one of the things I really did not like about the new law. We should have a three-tiered system (producers, distributors, retailers) like we have with alcohol to help avoid these sorts of hoarding issues.

* Sun-Times

Mayor Lori Lightfoot’s plan to create licensed places for on-site consumption of recreational marijuana in Chicago ran into a buzz-kill of opposition Monday by black and Hispanic aldermen concerned it will pave the way for a new wave of drug arrests.

“Our concern, as aldermen who represent the South and West Sides, is that it’s not gonna work and there’s gonna be illegal dens of people smoking the stuff,” Ald. Howard Brookins (21st) told the Chicago Sun-Times after a closed-door briefing on the mayor’s ordinance.

“There’s no stand-alone or free-standing smoke shops within the communities we’re talking about. And if you were able to find a cigar bar or lounge, the two customers just don’t mix.”

Ald. Roderick Sawyer (6th), former chairman of the City Council’s Black Caucus, agreed with his fellow cigar-smoker that Lightfoot’s plan to limit consumption-on-premises licenses to retail tobacco stores that derive 80% of their revenue from the sale of tobacco-related products is ill-conceived because “most cigar smokers don’t want to be in the same space as weed smokers” and vice-versa.

1) Um, expanding the available venues to consume will help cut down on “illegal dens of people smoking the stuff.”

2) Maybe some smoke shops would open if they could also sell a bit of cannabis (and I found a few venues on the South Side with a Google search for “cigar lounge” and “hookah bar”).

3) The two types of customers don’t have to mix, they can be put in separate rooms.

4) Two cigar-smoking aldermen oppose allowing cannabis to be consumed in cigar lounges? Hmm.

* Kass

With local media so excited, I probably shouldn’t point out that Mexican drug cartels will undercut the government and flood the street with cheaper stuff.

And the cartels, which don’t charge taxes, will compete with Pritzker.

Drug dealers will make a killing. More bullets will fly. More teenage street gang members will hit the ground. But forget what I said. I’d rather not harsh your mellow.

Yes, because legalization will mean lots more illegal weed is sold. Right. Great logic there.

…Adding… From comments…

As Kass probably already knows, it was the repeal of the 18th Amendment that really gave rise to the moonshiners.

Also, weed from Mexico is just generic stuff. It’s not anything close to the choices one can find at a legal retail outlet (once the supply issue is solved).

* Part of that column included a complaint about this Tribune story by Josh Noel

Not long ago, there was nothing complicated about using marijuana.

We simply “smoked weed.” We “got high.”

The great majority of us barely knew a thing more about what we were doing.

We had a dealer — or knew someone who did — and smoked whatever marijuana was handed to us in a small plastic baggie. Sometimes things went phenomenally well (seeing “Magnolia” on the big screen). Sometimes they didn’t (questioning your entire existence as the world jerked into hyper awareness). Either way, that pint of ice cream probably tasted delicious.

But as Illinois will discover now that recreational marijuana sales have begun, there’s no longer such a thing as simply “getting high” — because there’s hardly just one sort of high anymore.

The birth of a legal cannabis industry has led to far more product variety and consumer knowledge, which in turn has led to far more nuanced experiences than the days of being beholden to a dealer — or whoever happened to be standing next to you at a Phish show.

* You’ve probably seen the taxes on cannabis sales receipts posted on social media accounts. Illinois has a sliding excise tax, so those huge tax bills meant they were buying the strongest stuff. Here are the excise tax rates, which are kinda like alcohol and tobacco excise taxes

10% — cannabis with a THC level at or below 35%
20% — all cannabis infused products
25% — cannabis with a THC level above 35%

After costs, 35 percent of that tax money will go to GRF, 10 percent goes to the Budget Stabilization Fund and 8 percent goes to the Local Government Distributive Fund. The rest goes for various programs. More info here.

And then there’s the 6.25 percent state sales tax plus any local taxes.

* Press release…

The Illinois Department of Federal and Professional Regulation has announced that statewide adult-use cannabis sales from Wednesday, January 1 through Sunday, January 5 totaled $10,830,667.91. Dispensaries across the state rendered 271,169 transactions over the five-day period.

    Jan. 1 $3,176,256.71 [sales], 77,128 [transactions]
    Jan. 2 $2,252,586.51, 56,762
    Jan. 3 $2,209,065.01, 55,161
    Jan. 4 $2,004,019.43, 51,174
    Jan. 5 $1,189,252.18, 30,954
    TOTAL $10,830,667.91, 271,169

As part of the state’s focus on equity, 25 percent of cannabis sales tax revenues will support the Restore, Reinvest and Renew (R3) program, which aims to address the impact of economic disinvestment, violence and the historical overuse of the criminal justice system. The Department of Revenue expects to have a tax revenue estimate by the end of February, when initial tax payments from dispensaries are due.

“The successful launch of this new industry is a historic development for our state that will benefit the very communities that have been disproportionately impacted by the failed war on drugs,” said Toi Hutchinson, Senior Advisor to the Governor for Cannabis Control. “As we move into the next phase, the Pritzker administration is proud to see the robust interest in dispensary ownership from social equity applicants, and we encourage them to apply for $30 million in loans that we have available to reduce the capital barriers to entry. Unlike any state in the nation, Illinois has set the standard for what it means to legalize cannabis in a way that begins to right the wrongs of the past and gives new opportunity to those that have been left behind for far too long.”

On Thursday, January 2, the Department concluded the first round of applications for new dispensary licenses. A preliminary count shows that more than 700 applicants submitted applications seeking almost 4,000 licenses. More than 600 of the applicants identified themselves as qualifying for social equity applicant status. The Department will award up to 75 new dispensary licenses, which will be announced by May 1, 2020.

The application process provides several avenues for social equity applicants that are unique in the nation. Of the total points possibly awarded during application scoring, 20 percent are designated for social equity applicants, who also receive a 50 percent waiver for non-refundable application and license fees.

To defray the start-up costs associated with entering the industry, social equity applicants have access to a low-cost loan fund, primarily funded by existing dispensaries, and are allowed 180 days from the license award date to identify a physical location for the dispensary. Ownership limitations are also in place to protect market share for new applicants. Following the awarding of the next round of dispensary licenses, the state will also conduct a disparity study to ensure the market reflects the equity goals of the historic legislation.

- Posted by Rich Miller        

40 Comments
  1. - ChrisB - Tuesday, Jan 7, 20 @ 1:33 pm:

    As Kass probably already knows, it was the repeal of the 18th Amendment that really gave rise to the moonshiners.


  2. - NotRich - Tuesday, Jan 7, 20 @ 1:35 pm:

    the games played by the vertically integrated companies will turn out to be the most embarrassing for the Pritzker team..


  3. - Mason born - Tuesday, Jan 7, 20 @ 1:37 pm:

    Our office is near the Collinsville Dispensary. It’s been nuts. 1 thing I’ve noticed is a large portion of the plates are Missouri plates. (We’ve all been going by to take a peak at the festivities that and the 2 food trucks were good lunch options) One of those plates was owned by a nice older lady who went from the store to remove her spare and place her purchase under it. I wonder if IL legal is getting resold or just consumed across the river.


  4. - grand old non-partisan - Tuesday, Jan 7, 20 @ 1:44 pm:

    Is it really illogical to think that people - particularly those of limited means - who have been willing to break the law in the past to buy weed might continue to buy it on the street rather than the dispensaries if it is cheaper to do so? It’s probably a stretch to say that there will be *more* illegal weed, but the idea that legalization is going to end the street trade has always been ridiculous. It will make the dealers more desperate - which may make them more violent.


  5. - Grandson of Man - Tuesday, Jan 7, 20 @ 1:50 pm:

    “Mexican drug cartels will undercut the government and flood the street with cheaper stuff”

    And all those people now going to dispensaries will flood the ‘hoods, copping from gangbangers. I swear, the people with paranoia are not the marijuana consumers.

    What a disgrace to the great Mike Royko’s legacy John Kass is.


  6. - Batman - Tuesday, Jan 7, 20 @ 1:52 pm:

    Lol kass is the boomiest of boomers


  7. - Nick Name - Tuesday, Jan 7, 20 @ 1:55 pm:

    === 1 thing I’ve noticed is a large portion of the plates are Missouri plates.===

    Thanks for the tax revenue, Missouri!


  8. - j - Tuesday, Jan 7, 20 @ 1:55 pm:

    Consequence of doing medical before legal. While it might have seemed like a good idea at the time, the medical boys’ clout and money made the legal bill not as good as it could/should have been.


  9. - So_Ill - Tuesday, Jan 7, 20 @ 1:56 pm:

    “or whoever happened to be standing next to you at a Phish show.”

    Hehe


  10. - Nick Name - Tuesday, Jan 7, 20 @ 1:57 pm:

    ===It will make the dealers more desperate - which may make them more violent.===

    Go sleep it off.


  11. - SWIL_Voter - Tuesday, Jan 7, 20 @ 2:03 pm:

    It would be extremely cost prohibitive to resell legally purchased weed on the black market.

    It also doesn’t make sense to think the black market will thrive. As I grew older, it just became harder to find. The people I knew moved, got jobs, got arrested. Like the article says, you’re at the whims. I had to plan several weeks out and drive a couple hours. Even in the “good days” it wasn’t uncommon to wait hours on end as your dealer promises he’s “just around the corner.” Or maybe you had to wait until he “reupped” next week. And then finally you’d get it and it would be full of seeds and taste like dirt. Sure, maybe some college kids will still find cheaper product that is comparably good on the black market, but most people are going to appreciate the transparency, the ease, the variety, the quality, and the legality of the dispensary. Granted they have to work out the kinks for that to be assured.


  12. - grand old non-partisan - Tuesday, Jan 7, 20 @ 2:07 pm:

    “Nick Name” - I’m legit confused as to what is so irrational about the concern that legal weed will intensify the economic pressure on street dealers, which could -in turn- increase the violence that progressives (not reactionaries) attribute to the economic desperation in those communities.


  13. - SSL - Tuesday, Jan 7, 20 @ 2:07 pm:

    So far the cannibas rollout seems to be going pretty well. Nice to see out of staters helping out Illinois. I would expect there to be a decent increase in overall usage, as people who were open to the idea of it simply weren’t going to risk it since it was illegal. Or they didn’t have a trusted source for it. Yep, people like that actually exist. Will be interesting to see the sales numbers as the market matures.


  14. - City Zen - Tuesday, Jan 7, 20 @ 2:08 pm:

    ==And then there’s the 6.25 percent state sales tax plus any local taxes.==

    There’s also a 7% gross receipts tax on the sale of marijuana from cultivators to dispensaries. Assuming this is embedded in the sales price, that means consumers are paying a tax on top of a tax, aka tax pyramiding.


  15. - AD - Tuesday, Jan 7, 20 @ 2:19 pm:

    Someone at IDFPR looks to be a partaking in the cannabis. Can’t even get their own name right in the press release.


  16. - grand old non-partisan - Tuesday, Jan 7, 20 @ 2:21 pm:

    Just to clarify - I don’t oppose legalization. I’m just saying that it’s absurd to think that the street trade is going to disappear because of it.


  17. - grand old non-partisan - Tuesday, Jan 7, 20 @ 2:25 pm:

    “Sure, maybe some college kids will still find cheaper product that is comparably good on the black market, but most people are going to appreciate the transparency, the ease, the variety, the quality, and the legality of the dispensary.”

    LOL. Right, because the only people who smoke weed are college kids and those who are willing and able to pay a premium for quality, variety and legality.


  18. - Demoralized - Tuesday, Jan 7, 20 @ 2:31 pm:

    == Illinois Department of Federal and Professional Regulation==

    I certainly hope that wasn’t their press release because if it is they apparently don’t know where they work. That would be the Illinois Department of Financial and Professional Regulation


  19. - All This - Tuesday, Jan 7, 20 @ 2:37 pm:

    == It will make the dealers more desperate - which may make them more violent.==
    Lol
    You know the way Blockbuster store owners went berserk when Netflix came in the scene.


  20. - grand old non-partisan - Tuesday, Jan 7, 20 @ 2:53 pm:

    “You know the way Blockbuster store owners went berserk when Netflix came in the scene.”

    Right, exactly. Because a product that was previously only available through a violent illegal street market is exactly the same as the transition between two completely legal business models. Exactly like that.


  21. - @misterjayem - Tuesday, Jan 7, 20 @ 3:06 pm:

    “previously only available through a violent illegal street market”

    Or from a friendly dude at a show.

    – MrJM


  22. - 17% Solution - Tuesday, Jan 7, 20 @ 3:11 pm:

    “ I’m just saying that it’s absurd to think that the street trade is going to disappear because of it.”
    The dealers will just transition to selling abortion pills. They’re entrepreneurs.


  23. - RIJ - Tuesday, Jan 7, 20 @ 3:12 pm:

    Nature’s Treatment in Milan (Quad Cities) was down to THC edibles on the recreational side. The person who served me said she thought they’d run out entirely today or tomorrow with no idea of when any products will be available again.

    There will continue to be a black market as long as the surrounding states keep cannabis illegal.

    The safety (both in the procurement process and the safety of the product) and sheer variety of what will be available through dispensaries will overcome the illegal market.

    It may take a couple years, and it certainly won’t end until product availability has stabilized, but the THC black market will eventually resemble the current alcohol black market.


  24. - Grandson of Man - Tuesday, Jan 7, 20 @ 3:16 pm:

    All those people standing in line and generating $11 million in sales revenue did not go to an illegal dealer. A lot of people would probably rather buy it legally and easily than hassle with the black market. One customer standing in line told a TV reporter she’s glad she doesn’t have to go to illegal sellers.

    The next phase is so critically important, the social equity in ownership phase. Here’s hoping that it works out fine.


  25. - Etown - Tuesday, Jan 7, 20 @ 3:17 pm:

    There is always going to be a market outside of legal shops because of high taxes, have to be 21 to buy legally and the extreme wait times at moment.

    I imagine wait times will diminish down the road but after hearing about 2 hour wait times at my local place as recently as yesterday I will continue to use my regular supplier where there is no wait and the cost for high quality ganja is much less


  26. - grand old non-partisan - Tuesday, Jan 7, 20 @ 3:41 pm:

    “A lot of people would probably rather buy it legally and easily than hassle with the black market”

    Absolutely. Probably even most people. But not everyone will be able to afford to buy from a legal dispensary that has to incorporate the costs of quality control and employee benefits, plus charge taxes. The cartel-supplied street dealers will be able to easily undercut them.

    I’m legit blown away by how hard that is for so many to understand.


  27. - Randomly Selected - Tuesday, Jan 7, 20 @ 3:43 pm:

    Totally antidotal but both the dispensary I goto for medical and the street dealers I know were out of recreational weed by Jan 2. Until the flow of product streamlines, it’s a bull market out there for street dealers. Also, it’s not a good sign for your legal market if a good amount of the people in the legal market are new users.


  28. - repete - Tuesday, Jan 7, 20 @ 3:47 pm:

    You may see me tonight with a legal smile, it don’t cost very much but it last a long while (nod to JP). 30 yrs without any pot, but I plan to give it try again, as soon as the long lines become reasonable.


  29. - XonXoff - Tuesday, Jan 7, 20 @ 3:56 pm:

    ==Nature’s Treatment in Milan (Quad Cities) was down to THC edibles on the recreational side.==

    Might remind them they were part of ‘the alliance’ who funded the study to discredit the preceding state study which found the existing medmar production/distribution chain would be inadequate to supply the recreational market. Surprise; it bought them a year of operating in a vacuum. Here’s the list of other members: http://www.mca-il.com/members/

    At least Illinois medmar weren’t so bold as to come out against legalization attempts like we saw from medical dispensaries in some earlier states.


  30. - Grandson of Man - Tuesday, Jan 7, 20 @ 4:15 pm:

    “I’m legit blown away by how hard that is for so many to understand”

    I’m legit blown away by people who don’t understand the significance of many thousands of people, millions in the long run, not going to illegal sellers to buy marijuana. That’s going to be billions of dollars in sales and tax revenue going into the legal system that were not there before.


  31. - Rich Hill - Tuesday, Jan 7, 20 @ 4:17 pm:

    John Kass’s blood stream could use a healthy dose of THC, but that might cramp his Angry White Guy Fearful of Mexicans schtick.


  32. - Johnnie F. - Tuesday, Jan 7, 20 @ 4:40 pm:

    The profile of the typical cannabis buyer will change with legalization. While I’ve bought black market in the past, I’d much rather the stability of the legal market. Black market vape pen anyone?…How about some edibles from your dealer’s kitchen?? Prices will come down over time. Oh and, John Kass is the worst.


  33. - G'Kar - Tuesday, Jan 7, 20 @ 4:56 pm:

    Read _Barrel Aged Stout and Selling Out_ by Josh Noel if you think the three tiered system works in Illinois. (Even if you think it doesn’t work, read the book, it is very good.)


  34. - Grand old nonpartisan - Tuesday, Jan 7, 20 @ 5:05 pm:

    Grandson of Man, I fully understand and acknowledge all of that. But none of that precludes the continued existence of a thriving street market - at least in the foreseeable future.


  35. - Pundent - Tuesday, Jan 7, 20 @ 5:27 pm:

    =I’m legit blown away by how hard that is for so many to understand.=

    Maybe the way that you can get people to better understand the issue is by providing the evidence that you’ve obviously collected from states that have been at this for a few years. Because I’m sure your position is firmly rooted in data and not just what you “think.”


  36. - Jocko - Tuesday, Jan 7, 20 @ 5:33 pm:

    ==none of that precludes the continued existence of a thriving street market==

    Thriving? Maybe if you’re under 21 and/or have to drive a long way to get to your nearest dispensary. I don’t know of any street dealer that would put your personal or financial well being over their own.


  37. - Kayak - Tuesday, Jan 7, 20 @ 6:10 pm:

    10.8 million is a lot of green, but it’s even more plastic. I think we should require dispensaries to accept the very plastic cannabis containers they sell for on site recycling. This waste adds up quickly. Think of the even greener message they could send while taking care of the environment.


  38. - JS Mill - Tuesday, Jan 7, 20 @ 7:00 pm:

    =I would expect there to be a decent increase in overall usage, as people who were open to the idea of it simply weren’t going to risk it since it was illegal. Or they didn’t have a trusted source for it.=

    Count me as one . of those. I don’t drink much and stayed away from pot because it was illegal. I won’t anymore, plus I like knowing the quality and potency which you don’t know if you buy it illegally.

    =Is it really illogical to think that people - particularly those of limited means - who have been willing to break the law in the past to buy weed might continue to buy it on the street rather than the dispensaries if it is cheaper to do so? It’s probably a stretch to say that there will be *more* illegal weed, but the idea that legalization is going to end the street trade has always been ridiculous. It will make the dealers more desperate - which may make them more violent.=

    Replace “weed” with “guns” in your statement. Does that mean we should shut down gun sales?


  39. - All This - Wednesday, Jan 8, 20 @ 8:47 am:

    ==The cartel-supplied street dealers will be able to easily undercut them.==
    Until it’s not going to make money for them to do so. Kinda like Blockbuster in its death throes. Towards the end they were practically giving movies away.


  40. - Renzo - Wednesday, Jan 8, 20 @ 1:15 pm:

    Good to note NOBODY is smoking or otherwise consuming mexican brick weed, black market cannabis usually comes from California.


Sorry, comments for this post are now closed.


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