SOCIAL EQUITY CANNABIS LOANS

According to the Cannabis Regulation and Tax Act (410 ILCS 705), cannabis will be legal for adult use in Illinois starting on January 1, 2020. It is the moment thousands of Illinoisans have been waiting for.

 

As it stands to date, the State of Illinois is committed to ensuring that communities historically impacted by arrests and imprisonment for cannabis offenses have the opportunity to participate in the legal cannabis industry.

As part of this effort, the Illinois Department of Commerce & Economic Opportunity (DCEO) will provide low interest loans to Social Equity Applicants to assist with the expenses of starting and operating a cannabis business establishment. In order to receive one of these loans however, there are certain criteria factors that must first be met. 

Who Qualifies?

 

Social Equity loans will be available to Applicants, or companies applying for a license to operate a cannabis business that meet the following criteria:

• Has at least 51% ownerships and control by one or more Illinois residents who:

– Have lived in a Disproportionately Impacted Area in 5 of the past 10 years. Disproportionately
Impacted Areas are census tracts that have high rates of arrest and incarceration related to cannabis offenses, among other qualifications including high poverty and unemployment. A map of these areas is available here.

– Have been arrested for, convicted of, or adjudicated delinquent for cannabis-related offenses
eligible for expungement, including cannabis possession up to 500 grams or intent to deliver up
to 30 grams.

– Have a parent, child, or spouse that has been arrested for, convicted of, or adjudicated
delinquent for cannabis-related offenses eligible for expungement, including possession up to
500 grams or intent to deliver up to 30 grams.

• Has more than 10 full-time employees, and more than half of those employees:

– Currently reside in a Disproportionately Impacted Area.

– Have been arrested for, convicted of, or adjudicated delinquent for cannabis-related offenses
eligible for expungement, including cannabis possession up to 500 grams or intent to deliver up
to 30 grams.

– Have a parent, child, or spouse that has been arrested for, convicted of, or adjudicated
delinquent for cannabis-related offenses eligible for expungement, including possession up to
500 grams or intent to deliver up to 30 grams.

Beyond Social Equity Applicant status, other criteria that will be considered for qualification for a loan include business plans, financial details, operational and compliance information, and creditworthiness.

Although all loans will be below market rate, the specific rate, size, and duration of each loan will be determined on a caseby-case basis.

How Does It Work?

 

Everyone who applies to receive a license to operate a business in the cannabis industry will have the option to include an application to qualify as a Social Equity Applicant.

After license applications are submitted and before final licenses are awarded, DCEO will confirm or deny an applicant’s status as a Social Equity Applicant. Social Equity Applicants will have the option to apply to be preapproved for a Cannabis Social Equity Loan, conditional on receipt of a license.

Social Equity Applicants that are awarded a license have the option to apply for a Cannabis Social Equity Loan from DCEO to help cover the expenses of operating a cannabis business establishment.

Sound Complicated?

 

Do not worry. We are here to help! You can find technical assistance and support on everything from putting together a business plan to applying for a license at a range of locations throughout the state. More information on this will be coming soon.

 

Any Other Details I Should Know?

 

Just a few:

• Loan recipients will be required to provide quarterly documentation to demonstrate that they are
continuing to operate a viable business establishment in the cannabis industry.

• Loans will not be transferable. If a license is transferred, the new licensee will be required to repay the
balance of the loan, as well as any waived or reduced fees, in full. If the new licensee is a Social Equity
Applicant, they will have the option to apply for a new loan.

• Failure to comply with loan requirements, to retain a current license, or to remain in good standing with
IDFPR for the duration of the loan will result in noncompliance and required repayment of the loan balance or more.

If you have any further questions, please e-mail the Illinois Department of Commerce & Economic Opportunity at [email protected]. You may also text them at CANNABISILLINOIS to 42828 to be added to our distribution list for further updates.

 

 

Now, how do I apply for a license?

Author: Abraham Villegas

Abraham operates the Medical Cannabis Community to empower people to connect through advocacy, education, and community-based action. He also consults regularly with entrepreneurs and brands in the cannabis, hemp and CBD industry on matters related to social engagement strategies, community outreach, media advertising, web/graphic design and more.

Loading cart ⌛️ ...