Starting a Cannabis Business in Illinois

by | Mar 5, 2024

Starting a Cannabis Business in Illinois

Thinking about starting a cannabis business in Illinois, like a retail store, lab, or grow room? There’s a lot to learn first. It’s a high-risk, high-reward industry with many legal pitfalls. But with careful preparation, your Illinois cannabis business can grow, thrive, and flourish.

Cannabis Legalization in Illinois

How did we get to today? It behooves modern business owners to understand the history of cannabis legalization in Illinois.

In 2013, Illinois took its first step by passing legislation to approve medical marijuana use under certain circumstances. The next significant development came in 2016 when Illinois decriminalized the possession of small amounts of cannabis.

Finally, in 2019, the state’s legislature approved an act to legalize recreational cannabis use and sales. In conjunction with this legalization process, many residents can have related convictions expunged from their records.

Adults 21 and older can now possess, purchase, and use limited amounts of recreational cannabis. Medical users can cultivate up to five plants, but recreational users can’t grow their own plants, or they could face a fine.

The Cannabis Market in Illinois

Before you start a dispensary in Illinois, it’s critical to understand the audience you’d be serving. How many customers are there, and how much are they buying?

The good news for cannabis business owners is that Illinois has had a healthy consumer base since day one—literally. On its first day of legal recreational sales, the state raked in $3.2 million in sales, a feat unmatched by any other state to date. It’s especially impressive when you consider that there were notable product shortages in play.

Approximately 22% of Illinois adults have used cannabis in the past year, which translates to nearly 2 million potential customers. And that doesn’t even include tourists or visitors from states that haven’t legalized cannabis, like nearby Wisconsin.

All in all, adult-use cannabis sales in Illinois topped $1.6 billion in 2023, even higher than experts projected. It’s a big and rapidly growing industry. But more states are legalizing, more dispensaries are opening, and the market is becoming more competitive.

In short: the best time to start a cannabis business in Illinois is now.

How to Start a Cannabis Business in Illinois

No matter where you operate, starting a cannabis business involves the same basic process. See our complete guide, How to Start a Cannabis Business, for more details on each step.

  • Determine your business type: retailer, lab, cultivator, manufacturer, distributor, support service, or something else.
  • Develop a plan using resources like the Illinois Small Business Development Center. Cover aspects like your business model, structure, financial needs, and marketing strategy.
  • Consider zoning regulations when selecting a brick-and-mortar location, if applicable.
  • Address official matters through the Illinois Cannabis Regulation Oversight Officer. Depending on whether you’ll operate a medical dispensary or an adult-use location, other Illinois legal entities come into play. With ever-important licensing requirements and taxes at stake, it’s a good idea to enlist an attorney.
  • Register your business and obtain an EIN.
  • Get comprehensive insurance coverage for assets, customers, and personnel.
  • Secure funding and bank accounts. Consider alternatives to major federally-affiliated banks, such as local banks, private investors, or specialized institutions like Safe Harbor Financial or FundCanna.

You’ll encounter many more decisions about staffing, distribution, suppliers, and more as you dive into operating a cannabis business in Illinois.

Illinois Cannabis Security Regulations

Cannabis security solutions are crucial for your new business. So crucial, in fact, that the state of Illinois dictates minimum security requirements that you must fulfill to stay in compliance. A secure store means your products, employees, and customers are safe—and so is your bottom line.

Here’s what Illinois law says your cannabis business needs:

  • Continuous 24-hour video monitoring of all entryways, areas with products, safes/vaults, etc., and the ability to store this footage for 90 days
  • Locking doors in good working order
  • A panic/duress button
  • A reinforced vault room for after-hours product storage
  • An operational alarm system with perimeter alarms and glass break sensors
  • Shatterproof tinted film on exterior windows
  • Sufficient lighting
  • Trimmed landscaping
  • Signs and locks for areas with restricted access
  • A notification system in case of security equipment failure
  • Product disposal procedures
  • An electronic daily log of anyone with access to limited-access areas
  • Emergency procedures in case of theft or loss
  • A system for preventing unauthorized access to keys, combinations, passwords, etc.

It should be noted that these laws were laid out for medical dispensaries, but they seem to be holding true for adult-use license holders. These requirements may seem excessive, but by protecting your business now, you’re preventing an expensive headache in the future.

Cannabis Security from Deep Sentinel

One thing you can check off your list right away: researching cannabis security camera solutions. Deep Sentinel exceeds Illinois state guidelines for video camera surveillance and offers something even more powerful: live guard protection backed by AI threat detection.

If a suspicious person pokes around your property after you’ve closed up for the day, the Deep Sentinel guards have eyes and ears on the scene immediately. Using the camera’s system’s two-way audio and siren, they can deter the suspect and call the cops—all without you lifting a finger.

With Deep Sentinel at your side, your venture is sure to be a success. Good luck on your journey!

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