* Press release…

Governor JB Pritzker and the Illinois Department of Commerce and Economic Opportunity (DCEO) today announced that $8.75 million in Direct Forgivable Loans fully financed by the State will be made available to all conditionally-approved social equity loan applicants in order to provide immediate access to capital. Pending the completion of a simplified documentation process, forgivable loan amounts between $50,000-$500,000 will be released immediately.

“Equity has always been at the core of our cannabis legalization process. It’s why we expunged hundreds of thousands low-level cannabis charges and instituted the Cannabis Social Equity Loan Program. But I know that if we want to create a truly equitable cannabis industry in Illinois, we must give our business owners the resources they need to grow—both figuratively and literally,” said Governor JB Pritzker. “That’s why we are launching this Direct Forgivable Loan Program to provide a much-needed jumpstart for social equity applicants who’ve faced hurdles in pursuit of capital funding. This $8.75 million will help our social equity licensees open their doors for business—a major step towards creating a prosperous cannabis industry here in Illinois.”

The Cannabis Social Equity Loan Program is a first-of-its-kind program that launched in the summer of 2021 with the goal of providing low-interest loans to social equity licensees through a partnership with lending institutions. Program participants have encountered significant delays in receiving capital through financial institutions due to the complexities of navigating a new industry that remains illegal under federal law, as well as institutions’ fiduciary, regulatory responsibilities and underwriting standards that are set independent of the program.

In response to feedback from participants, and out of an unwavering commitment to increasing equity in the cannabis industry, DCEO’s new Direct Forgivable Loan Program will make funding from the state available to all eligible program participants regardless of their original loan application status with a lending partner. Interested participants can continue to pursue funding through the original loan program, while also receiving the new Direct Forgivable Loan.

“In Illinois, we are striving to create an ecosystem for cannabis entrepreneurs that prioritizes those who have been adversely impacted by the war on drugs,” said Lt. Governor Juliana Stratton. “The creation of the Direct Forgivable Loan Program is a critical step in that mission. We are forging ahead to support social equity licensees’ businesses so that Illinoisans can thrive alongside this growing industry.”

“Creating a more equitable cannabis industry in Illinois is the driving force behind the State’s loan programs and today’s announcement will accelerate our vision by making immediate capital available to social equity licensees,” said DCEO Director Sylvia I. Garcia. “Looking ahead we will continue working closely with licensees as we implement the new Direct Forgivable Loan Program and incorporate program improvements for future rounds of funding.”

A total of $8.75 million will be available through the new Direct Forgivable Loan Program. The following loan amounts are available per participant based on the business type:

• Craft Growers: $500,000
• Infusers: $250,000
• Transporters: $50,000

Because DCEO has already received significant documentation from program participants, the additional documentation requirements for a direct forgivable loan are minimal to allow for prompt disbursal of funds. The forgivable loan has an 18-month grace period with no payments or interest accrued to provide businesses with flexibility.

Loan forgiveness will be provided to recipients upon receiving documentation of a broad array of eligible expenses currently accrued or accrued during the loan period, including rent, payroll, utilities, inventory, debt, regulatory expenses, legal fees, equipment and much more. The main differences between the programs are as follows:

Looking Ahead: Continued Collaboration with Licensees
Through the original loan program, social equity applicants were conditionally approved to pursue loan funding directly with lender partners. While conditional approval did not guarantee funding through the financial institutions, the program was designed to incentivize lending to social equity licensees to the greatest extent possible. As part of the structure, DCEO committed to funding a portion of each loan– thereby assuming a portion of the risk and making lending more attractive to lenders.

With many applicants still in the process of seeking loans through the original program, DCEO will continue to work closely with partners in an effort to secure loan funding for applicants who wish to complete the loan application process. Any loan funding provided through the original program would be in addition to the Direct Forgivable Loan funded by the State. In addition to providing additional capital, securing a loan from a financial institution can help add to the legitimacy of the social equity applicant’s business model and help attract capital from additional investors.

*** UPDATE *** Press release…

The Illinois Department of Financial and Professional Regulation (IDFPR) announced today it has issued the first full adult use cannabis dispensing organization licenses to social equity applicants. IDFPR issued a social equity applicant license to Ivy Hall, located at 1720 N. Damen Ave. in Chicago in Cook County, which is 61% African American owned. IDFPR issued a second social equity applicant license to Green Rose, located at 612 North Wells Street in Chicago, which is 15% Latino-owned and 2.5% African American owned.

“In the coming months, Illinois is set to more than double the number of cannabis dispensaries, with every single new license holder being a social equity applicant,” said Governor JB Pritzker. “With equity as our north star, today marks the first step for retail cannabis operations to begin repairing the devastating harm caused by the failed War on Drugs on communities of color. Congratulations to Green Rose and Ivy Hall – and we look forward to welcoming many more social equity-owned dispensaries to our great state.”

“This is but the first two of almost 200 new full dispensary licenses IDFPR anticipates issuing in the coming months, and we’re proud to welcome Green Rose and Ivy Hall to the most equitable cannabis market of any state in the country,” said Mario Treto, Jr., Secretary of the Illinois Department of Financial and Professional Regulation. “IDFPR is committed to ensuring a diverse and well-regulated cannabis industry in Illinois, and we look forward to welcoming even more entrepreneurs in the time ahead.”

To date, IDFPR has issued 192 conditional adult use cannabis dispensing organization licenses from a series of lotteries in 2021 and 2022. Full licenses will be issued as the Department receives and reviews the applications for the full licenses, before completing the mandatory on-site inspection as required by the Cannabis Regulation and Tax Act. Of the businesses selected through the lottery process, 41% are majority Black-owned, 7% are majority White-owned, and 4% are majority Latino-owned, while 38% of awardees did not disclose the race of their owners. To open, applicants still need to receive agent and agent-in-charge badges, create an account with the state traceability system, and place their first order for cannabis products.