Dear Illinois Department of Agriculture and Gov. Pritzker,

We are writing to express our concerns regarding the upcoming 2022 renewal fees for cannabis Infusers and Transporters and to request that Governor Pritzker and the Department of Agriculture waive such fees this year.

Before explaining our rationale for why you should waive the 2022 renewal fees, we think it is important to explain who we are and what we do. We are Cannabis Equity Illinois Coalition, a grassroots nonprofit working to repair the harms from the War on Drugs, along with supporting Social Equity Applicants seeking opportunities in the regulation industry. Indeed, we represent dozens of cannabis businesses in various stages of the application and licensing processes, including licensed Infusers and Transporters. Accordingly, we have a deep understanding of the real-world issues facing Infusers, Transporters, and Social Equity Operators.

Our Infuser and Transporter members are justifiably concerned with the upcoming 2022 renewal fees that are $20,000 for Infusers and $10,000 for Transporters. On behalf of all licensed Infusers and Transporters, we are therefore asking that the Department waive the 2022 renewal fees for two related reasons: (1) it is inequitable to impose renewal fees given the slow development of the Illinois market, which is due to no fault of Infuser and Transporter licensees; and (2) payment of the significant renewal fee at this time will have a minimal impact on the State’s budget but will have catastrophic consequences for Infusers and Transporters seeking to complete build out and commence operations.

As you are undoubtedly aware, the rollout of Illinois cannabis licenses has been stymied by several factors, including but not limited to the COVID-19 pandemic and litigation regarding the Illinois Cannabis Regulation and Tax Act (the “Act”) and the cannabis license application process. As a result of these and other factors, the Illinois market is nowhere near where it was expected to be when licenses were issued to Infusers and Transporters last year, much less when the Act was signed into law in June 2019. Specifically, none of the 100 expected Craft Grow licensees are operational, and none of the 185 expected new Dispensary licenses have been issued, even conditionally. Relatedly, large-scale Cultivators have not ramped up production as much as anticipated because of the lack of retail outlets. Consequently, Infusers are being squeezed in both directions—there is a limited supply of cannabis oil with which to infuse, and there is a limited number of outlets to which they can sell. Similarly, the lack of operational Craft Growers, Infusers, and Dispensaries drastically reduces (1) the number of available customers for Transporters to serve; and (2) the transportation needs of the reduced customer pool.

Currently, recently licensed Transporters are at an increased disadvantage given that the Department has allowed new Transporter licensees to delay accepting and paying for their new licenses. It would be wholly unfair to allow new licensees to avoid (or at least delay) paying a required license fee, but demand existing Transporters—who paid that initial licensing fee last year—pay their renewal fee, putting them at a significant disadvantage to their competitors.

Our second concern is that the imposition of these renewal fees will cause significant financial strain on Infusers and Transporters. We are concerned that some licensees will be forced to close their businesses. As the Department is undoubtedly aware, the slow-developing Illinois market has made it more difficult than anticipated for companies to raise capital. And any capital that is raised is being dedicated immediately to build out and the commencement of operations. It would be a significant financial setback for Social Equity Infusers and Transports to have to pay $20,000 and $10,000, respectively, at this stage of the process.

In short, it is inequitable to charge renewal fees at this time given the state of the Illinois market, and it is also counterproductive for our shared goal of a thriving and diverse Illinois cannabis market. The fees will not make a significant difference in the State’s budget or operations, while a waiver of these fees would provide a critical and needed boost to Social Equity Infusers and Transporters.

We appreciate your time and consideration. We are happy to discuss our concerns and invite an open dialogue about the 2022 renewal fees.

Kindest Regards,