Illinois

Equity Project State Briefing

Social Equity

Social Equity Definition / Criteria

  • i. Previous Cannabis Conviction:
✓
  • ii. Income:
✗
  • iii. State Residency:
✓
  • iv. Qualifying Neighborhood / Municipal Residency:
✓

Illinois was the first state in which the legislature legalized adult-use cannabis with a social equity program included— however as of January 15, 2022, no social equity operators in Illinois have begun business due to delays caused by lawsuits. 

In the state of Illinois, “Social Equity Applicant” means an applicant that is an Illinois resident that meets one of the following criteria:

(1) an applicant with at least 51% ownership and control by one or more individuals who have resided for at least 5 of the preceding 10 years in a Disproportionately Impacted Area;

(2) an applicant with at least 51% ownership and control by one or more individuals who:

(i) have been arrested for, convicted of, or adjudicated delinquent for any offense that is eligible for expungement under this Act; or

(ii) is a member of an impacted family;

(3) for applicants with a minimum of 10 full-time employees, an applicant with at least 51% of current employees who:

(i) currently reside in a Disproportionately Impacted Area; or

(ii) have been arrested for, convicted of, or adjudicated delinquent for any offense that is eligible for expungement under this Act or member of an impacted family.

Source:

410 ILCS 705/1-10. Definitions

Social Equity Provisions

Illinois Social Equity program proposes to provide forthcoming participants with the following resources:

  • Technical assistance and individualized support through the state’s partner network for pre- and post-licensing, legal assistance, and loan application assistance.
  • Eligibility to receive 50 points (out of a possible total of 250 from IDFPR on their dispensary license application score or receive 200 points (out of possible total 1000) from Illinois Department of Agriculture on their craft grower, infuser, or transporter license application score
  • Eligibility to pay reduced license and application fees.

Access to low-interest loans for starting and operating a cannabis-related business

View the Administrative Rules for the Social Equity Cannabis Loan Program.

Source:

410 ILCS 705/7-15. Loans and grants to Social Equity Applicants
Illinois Department of Commerce and Economic Opportunity "Illinois Adult-Use Cannabis Social Equity Program, How do we support Social Equity Applicants (SEAs)?". Retrieved January 10, 2022

License Priorities and Set Asides

  • License Priorities / Set Asides:
Yes

In Illinois, the Department can reserve up to 55 additional Conditional Adult Use Dispensing Organization (retail) licenses for ​​Qualifying Social Equity Justice Involved Applicants. The law specifies how many of the reserved licenses can be distributed in each region of the state.

Source:

410 ILCS 705/15-35. Qualifying Applicant Lottery for Conditional Adult Use Dispensing Organization Licenses. Subsection (a)

Fee Waivers and Reductions

  • Fee Waivers / Reductions:
Yes

In Illinois, qualified social equity applicants are given a 50% discount on all  application fees, licensing fees and other financial requirements. For example the normal application fee is $5,000 with a biannual licensing fee of $60,000 however for social equity applicants the application fee is only $2,500 with a $30,000 biannual licensing fee.

Other Financial Support for Social Equity Applicants and Licensees

Illinois allocates funding to support their social equity program. As soon as practical after July 1, 2019, the Illinois will transfer $12,000,000 from the Compassionate Use of Medical Cannabis Fund to the Cannabis Business Development Fund. Additionally, all money collected from medical cannabis companies for Early Approval Adult Use Dispensing Organization Licenses issued before January 1, 2021  will be deposited into the Cannabis Business Development Fund.

The Cannabis Business Development Fund will be exclusively used for the following purposes:

  1. to provide low-interest rate loans and grants to Qualified Social Equity Applicants to pay for ordinary and necessary expenses to start and operate a cannabis business establishment; 
  2. to compensate the Department of Commerce and Economic Opportunity for any costs related to the provision of low-interest loans and grants to Qualified Social Equity Applicants;
  3. to provide targeted outreach and support for Social Equity Applicants and Qualified Social Equity Applicants;
  4. to assist with job training and technical assistance for residents in Disproportionately Impacted Areas.
  5. to conduct any study or research concerning the participation of minorities, women, veterans, or people with disabilities in the cannabis industry, including, without limitation, barriers to such individuals entering the industry as equity owners of cannabis business establishments.

Source:

410 ILCS 705/7-10. Cannabis Business Development Fund. Subsections (a)-(c)

Other Licensing Provisions

License Caps

  • License Caps:
Yes

The state of Illinois does have licensing caps within its adult use framework, which have shifted and increased over time due to litigation and additional laws. The law specifies how many of each license type can be distributed in each region of the state, based on the region’s percentage of the state’s population. Additionally, localities with over 500,000 residents can opt out of participating in adult use sales.

Source:

410 ILCS 705/55-28. Restricted cannabis zones
410 ILCS 705/15-25. Awarding of Conditional Adult Use Dispensing Organization Licenses prior to January 1, 2021

Application Selection Process

  • Selection System:
Qualified Lottery

Illinois distributes its adult use cannabis licenses through a “Qualified Lottery.”  ​​The lottery is limited to applicants who have at least 213 of 250 points (85%) awarded as part of the application scoring.

Source:

410 Ill. Comp. Stat. Ann. 705/15-30. Subsection c. Selection criteria for conditional licenses awarded under Section 15-25

Felony Disqualification on Ownership

  • Ownership Exclusion for Felony Convictions:
No
  • Exemption for Cannabis Offenses:
Review Process

The state of Illinois does not specifically disqualify applicants from cannabis licensure due to past convictions, however applicants must complete a background check to prove they are of “good moral character.”  No application for licensure shall be denied by reason of a finding of lack of good moral character when the finding is based solely upon the fact that the applicant has previously been convicted of one or more criminal offenses.

When reviewing a prior conviction of an initial applicant for the purpose of determining good moral character, the Department must consider evidence of rehabilitation and mitigating factors in the applicant’s record, including the specific factors set forth within the law (in subsection (a) of Section 2105-131 of this Act [20 ILCS 2105/2105-131).

The department should review mitigating factors and evidence of rehabilitation to determine whether a prior conviction will impair the ability of the applicant to engage in the practice for which a license is sought.

Source:

410 ILCS 705/5-20. Background checks
20 ILCS 2105/2105-135. Qualification for licensure or registration; good moral character; applicant conviction records
20 ILCS 2105/2105-131. Applicants with criminal convictions; notice of denial

Employee Criminal Records

  • Conviction Restrictions for Employees:
No
  • Exemption for Cannabis Offenses:
Some Protections

Cannabis employees are required to have the proper state badging which includes a state level background check. Employers may conduct background checks on employees in compliance with the Job Opportunities for Qualified Applicants Act, and the The Employee Background Fairness Act, Illinois version of a Ban the Box provisions. An employer is not allowed to require an employee to disclose sealed or expunged offenses, unless otherwise required by law.

In January 2021, the Illinois legislature passed  “The Employee Background Fairness Act” (Senate Bill 1480) to make using criminal records in employment decisions a civil rights violation unless there is a “substantial relationship” between the record and job or an “unreasonable risk” to property or the safety of individuals or the general public. Employers must now consider these factors: The length of time since the conviction; The number of convictions that appear on the conviction record; The nature and severity of the conviction and its relationship to the safety and security of others; The facts or circumstances surrounding the conviction; The age of the employee at the time of the conviction; and Evidence of rehabilitation efforts.

Source:

410 ILCS 705/15-5. Authority. Subsection (c)
410 ILCS 705/1-10. Definitions
410 ILCS 705/5-20. Background checks
820 ILCS 75/15. Employer pre-screening
Employment Screening Resources "Illinois Amends 'Ban the Box' Law to Help Job Applicants with Criminal Record". Retrieved January 9, 2022
"The Employee Background Fairness Act” (Senate Bill 1480). Retrieved January 9, 2022

Availability of Expungements

  • Expungements:
Yes, Automatic

Illinois offers automatic expungements for cannabis convictions of possessions of 30 grams or less which occurred prior to June 2019. Automatic expungements will occur at different intervals based on the date of the offense. All records should be expunged by January 1, 2025. Individuals may petition the court to expunge convictions for possession of up to 500 grams and sale of up to 30 grams.

Source:

20 ILCS 2630/5.2. Expungement, sealing, and immediate sealing. Subsection (i)