As marijuana companies have jockeyed for new locations, particularly downtown, the biggest concern was navigating the state’s rule that no retail shops would be allowed within 1,500 feet of each other.
So everyone in the industry was watching the first two applications — some 1,300 feet apart in River North — Cresco Labs planned shop at 436 N. Clark St. and MOCA Modern Cannabis’s application for 214-232 W. Ohio St.
The Illinois Department of Financial and Professional Regulation, like the city’s Zoning Board of Appeals before it, surprised everyone in approving both on Friday.
“There were no such dispensaries within 1,500 feet of either applicant when the final inspections were completed, and each secondary site dispensary was approved for licensure on Friday,” the department, which regulates cannabis dispensaries, said in a statement today.
Throughout the scramble by existing marijuana retailers to add new sites, especially in downtown Chicago, where much of the area is off-limits by city ordinance, the cannabis companies were operating under the belief that it was a race to win approval quickly, and the winner would set the marker for the 1,500-foot rule.
Weed companies spent time and money trying to lock up multiple properties in case a rival got approval before them for a site within 1,500 feet of their first choice.
The 1,500-foot requirement was part of the controversial state law signed in late June that allowed recreational weed sales and gave existing pot companies the right open a secondary site for each medical-marijuana license they held.
IDFPR sent out notice Aug. 15 about how it planned to referee competing applications. “We are aware that potential conflicts may arise between applicants if they seek locations for their second-site dispensaries that are within 1,500 feet of each other. In the event of such a conflict, the applicant who receives a license first will be the one permitted to operate.
“IDFPR will not grant a license for a secondary site until the applicant’s facility has passed final inspection, which will occur after receipt of the necessary zoning approval,” the letter continued. “IDFPR will also not grant a license if it has granted another dispensing organization a license at a location within 1,500 feet of the applicant’s proposed location.
“In this situation, IDFPR will require the applicant to amend its application with a different location, and if the applicant does not do so, it will deny the application. One way to minimize the possibility of such conflicts is for potential applicants to make themselves aware of the proposed locations of other applicants.”
Now that the state has issued licenses to Cresco and MOCA, however, presumably others will have to take their marks from them.
But it will be interesting to see how IDFPR handles two other locations granted approval from Chicago’s Zoning Board of Appeals are within about 550 feet: Windy City Cannabis won approval for a dispensary at 923 W. Weed St., and MedMen received a permit for 1001 W. North Ave.
“This doesn’t make any sense,” said Josh Kahan, a cannabis-industry real estate consultant. “What’s the point of the rule? That’s what all the companies were using for their benchmark. It’s an interesting cop-out.”
It’s not the first time that IDFPR has flummoxed cannabis companies. The law said existing medical marijuana dispensaries would be allowed to sell recreational marijuana. But when companies sought to relocate existing facilities to larger or more accessible locations, or to move of out of jurisdictions that rejected recreational sales, IDFPR interpreted the language to mean only the physical address in operation when the law took effect July 1 would be eligible to begin selling recreational marijuana — and they were not movable.