By: Dan Tausk
, Principal, Mid-America Real Estate Corporation
May 12, 2020
Despite operational, administrative and legislative challenges during COVID-19, the Illinois cannabis market nevertheless continues to shine a big light on a darkened retail landscape.
April was another stellar month of sales, despite Illinois stay-at-home orders in place. With +$37m in total sales, again coming from a very limited amount of open retail locations (+50), the YTD total sales now approach $150M ($147M+) with approximate taxes generated estimated at +$30m.
The process for opening 55 “second site” adult-use for the existing operators is ongoing with only a handful receiving state licensing. These include a controversial awarding of two licenses within 1,500 feet of each other in Chicago’s River North neighborhood, just west of the Mag Mile (and just outside of the Mayor’s designated exclusion zone for cannabis).
Meantime, perhaps COVID-19 largest impact on cannabis in Illinois is the delay of issuance of the next round of licensing. Craft grow/processing licenses (40) were delayed by the State until a minimum late summer. Meanwhile, the State just announced a delay in the crucial awarding of 75 additional adult-use dispensary licenses which were applied for on January 1st and due to be awarded May 1st. Nearly 700 applications were filed for these valuable 75 spots. The delay will run concurrently to Illinois extended stay-at-home order, estimated to be lifted mid-June at earliest.
Curbside pickup with online pre-order as implemented during COVID 19 is operational but not ideal. Most of the existing dispensaries do not have sites designed for pickup, so “makeshift” scenarios exist location to location. Supply shortages still exist especially for flower, and many open dispensaries are still instituting limitations on hours of operation and caps on purchases for adult-use customers.
The next 45-60 days should be critical in providing some clarity on where the “next wave” will locate and who the next round of “players” will be. The neighboring and competitive Michigan market struggles from similar issues. Nationally the expectation is that COVID-19 might speed up SAFE Banking and MORE Act initiatives due to being deemed essential.