Many people have spoken out about the unequal distribution of cannabis licenses within the state of Illinois. Now, an organization known as the 1937 Group is launching a social equity incubator to address the issue.
The ultimate goal of this incubator is to provide social equity businesses with independence and success within the industry. And the 1937 Group already has the ball rolling with a number of affiliated brands.
Still, even with these brands, Illinois is seeing extreme inequality within its cannabis industry.
As Ambrose Jackson, CEO of the 1937 Group, said in an interview: “Currently, just 2% of current Illinois dispensaries are majority BIPOC owned. This statistic is more than just disheartening—it’s disgraceful.”
According to the 1937 group, one of the biggest issues is the application process. Even people who’ve had years of experience with cannabis have trouble in this area. With that:
“It’s extremely daunting for those who are not in the industry. Accordingly, we’ve established this program to help others take advantage of this small window of opportunity to join the legal cannabis industry, and give them the assistance they need to establish a successful cannabis business.”
The group furthers these statements with: “This dispensary application process is unlike any other round of licensing established by the State. Experience has taught us that many who qualify as Social Equity Applicants may not be aware and/or lack the resources and experience to apply successfully. With just a two-week window for applicants to apply, there is too much at stake to sit on the sidelines. It’s in our DNA to do something to help.”
So, What Exactly Can Be Done for a More Equal Industry in Illinois?
The biggest issue with Illinois’s social equity program is the specific criteria that must be met in order to receive a license.
For example, those who are the majority owner of a cannabis company must reside in areas the state considers disadvantaged. What exactly does the state deem as disadvantaged? There’s no clear indication.
Even still, when a license is granted, holders must meet further criteria within a 180-day period. More specifically, certain aspects of opening a business (such as getting a location, supplier, etc.) must be met.
Furthermore, license owners are having difficulty maintaining investors. If the wait for a business is too long, many move on. And if investors move on, licenses are no longer applicable because Illinois doesn’t allow changes to be made to the ownership group.
In turn, some lawmakers are worried about predatory lenders and new partners diluting the state’s social equity program.
And this doesn’t even consider all the difficulties cannabis entrepreneurs are having with banking. In fact, some reports claim banks are charging interest on loans as high as 18 to 19 percent.
As of now, multi-state cannabis behemoths are running Illinois’s market. Naturally, competing against these organizations is quite impossible for smaller business owners. And, in turn, Illinois needs to do something to shrink the inequality gap between multi-state businesses and locally-owned BIPOC businesses.
However, in order to do so, they would need to take a loss on their ever-growing cannabis tax revenue. And the chances of the state accepting such a loss simply seems unlikely.
This is where the 1937 Group comes in. Helping those with social equity applications manage the unjust market their state has built.
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