The Cannabis Regulation and Tax Act created licenses for craft growers, infusers, and transporters as a way to create more opportunities for folks looking to break into the legal industry. The Illinois Department of Agriculture can license up to 40 cannabis craft growers, 40 cannabis infusers, and unlimited transporters in 2020. You can read more about the license types in this previous post.
The first years in Illinois’ regulated cannabis industry will be tough. Although the roll out of legal recreational sales has been great for the State and early-approval applicants, newcomers to the industry may run into issues with product supply if they do not have existing partnerships or do not plan to be vertically integrated. With the fragmentation of the industry, collaboration and cooperation will be key to success.
The Cannabis Regulation and Tax Act states that individuals who have been arrested or incarcerated due to drug laws suffer long-lasting negative consequences, including impacts to employment, business ownership, housing, health, and long-term financial well-being; that folks living in Disproportionately Impacted Areas face greater difficulties accessing traditional banking systems and capital for establishing businesses. If that is the case, then creating an industry in which only the well-connected and well-funded can succeed would be contradictory to building an equitable industry.
Building Equity Through Worker Ownership
Part of our mission at Chicago Cannabis Company is to enable entrepreneurship in Chicago’s neighborhoods that have been negatively impacted by “the war on drugs” and provide economic opportunities for Socially or Economically disadvantaged communities. As a worker cooperative, ownership of the company is shared by the workers, and decisions are made democratically according to the terms of the company’s operating agreement.
Cooperatives are unfamiliar to many people despite the fact that they have been around for centuries. As a worker cooperative, ownership of the company is shared by the workers, and decisions are made democratically according to the terms of the company’s operating agreement. The founders of Chicago Cannabis Company have chosen to form a worker cooperative because they believe that worker cooperatives contribute to a more just society and to more just and healthy workplaces.
Cooperative Infuser Model
"Infusers" incorporate cannabis or cannabis concentrate into a product formulation to produce a cannabis-infused product. Unlike cultivators, infusers in Illinois will not be able perform extraction of concentrates or oils from cannabis flowers. Thus, when creating their products, infusers may only use extracts purchased from licensed Illinois cultivators. An entity may own both infuser and craft cultivator licenses.
Requirements for Infuser License Application:
- Non-refundable application fee of $5,000
- Background checks of the prospective principal officers, board members, and agents of the infuser
- List of every person having a financial or voting interest of 5% or greater in the infuser operation
- Description of proposed facility: an enclosed, locked facility where cannabis will be infused, packaged, or otherwise prepared for distribution to a dispensing organization or other infuser
- Verification that the proposed facility is in compliance with local zoning rules
- Security Plan approved by the Department of State Police
- Operating bylaws which include procedures for: Facility monitoring system, Recordkeeping, and Staffing
- Proposed employment and business practices, specifically in Disproportionately Impacted Areas
- Processing, inventory, and packaging plans
- A plan describing: energy needs, water needs, and waste management
- Demonstrate experience with infusing products with cannabis concentrate
- Demonstrate experience with operating a commercial kitchen or laboratory preparing products for human consumption
- List of of any academic degrees, certifications, or relevant experience of all prospective principal officers, board members, and agents of the related business
Even the license application for a “more accessible” license can be daunting. However, through cooperation and collaboration we can support entrepreneurs looking to participate in the industry who may otherwise find it difficult to obtain a license on their own.
At Chicago Cannabis Company we have created a platform to unite those with entrepreneurial skills acquired through running a successful "black market" (informal) cannabis business, and other individuals with transferable skills interested in breaking into the legal cannabis industry. We feel that our cooperative structure gives us strength as a company. With multiple owners investing their time, talents, and resources to the company, the sum of the parts is greater than the whole. The cooperative structure also lends itself to greater accountability, transparency, and workplace satisfaction.
These benefits have been demonstrated empirically as co-ops have been shown to have better survival rates than other forms of business ownership. After the first year of operation, co-ops have been shown to have a 10% failure rate, compared to 60-80% failure rate for other forms of business. After 5 years in business, 90% of co-ops are still operating, compared to 3-5% of traditional businesses.
Cooperative principles beyond our co-op
There are many ways cooperatives can thrive in the cannabis industry. Producer cooperatives are already popular among farmers and those in the agricultural field. Craft cultivators, infusers, and dispensaries may share premises with either or both. Transporters will be needed to securely transport cannabis products to and from these organizations. There are many possibilities for forming user-owned, user-controlled, and user-benefiting cooperatives.