According to the state’s Cannabis Regulation Oversight Officer, (CROO), according to the latest data about Illinois’ legal cannabis industry, diversity numbers have increased significantly since adult use sales began in January of 2020. The fact that the state has been prioritizing social equity in its license applications is a clear sign of success.
The office’s report on diversity published last week states that when recreational marijuana sales begin in 2020, “the initial businesses will be 100% majority White and only one business majority female-owned.” Since then, diversity measures have markedly improved.
The key change is that Black-owned businesses increased from 0 to 27 percent in the period 2020-2023. Hispanic or Latino-owned firms climbed from zero to five percent. Asian-owned businesses went from 0 to 3 percent. Women now own 16 percent of cannabis-licensed companies.
CROO sent two surveys in May, one mandatory to all licensed marijuana businesses and the other voluntary for employees. A total of 132 businesses responded, which represents approximately 224 licensees. In the employee survey, 2,307 respondents responded. This is roughly a quarter out of the almost 10,000 email addresses sent by CROO.
Ownership was classified for companies with multiple owners based on the identity of those who owned at least 51 percent.
Black cannabis business owners now make up 26 percent of the market, compared to just 1 percent in 2010. Latino/a owners and Hispanics, on the other hand, make up now 7 percent of market, compared with 1 percent in 2020. CROO reports that Asian owners have gone from “an unknown amount” to 2 percent. Women’s ownership grew from 18% to 25%.
A summary of the report states that the responses of companies “were not validated but accepted as accurate.” CROO also said that it is possible the responses to the survey may not represent the entire cannabis industry in Illinois because not all of them returned the poll.
The office stated that “however, the results represent the most accurate data available.”
About 10 percent of employees said they worked at the corporate headquarters, 50 percent in dispensaries, and 28 percent in cultivation centers. The rest worked for infusion companies or testing labs, or at transporters. Or they left the question blank. Most reported working in Illinois.
According to the CROO Report, 11 percent of workers who responded to the current survey are Latino/as or Hispanics, up from 5 percent in the year 2020. In contrast, the share of Asian workers increased from 1 to 2 percent. The percentage of Black workers, on the other hand, decreased slightly from 10% in 2020 to 9% in 2023. Sixty five percent of respondents to the survey said they were “frontline workers” and not supervisors, middle managers, C-suite or senior managers.
However, Black people are now better represented at higher levels in company leadership than they were back in the year 2020. According to the Report,, the percentage of Blacks in C-suite roles grew from 1 to 19 percent. The proportion of Blacks on cannabis board of directors jumped from 6 to 20 percent.
CROO has conducted three rounds of diversity polling since the opening of the legal market. The first survey was conducted between November 2020 and April 2021. The second survey covered December 2021 through August 2022, while the latest survey covered December 2022 until this past August.
CROO’s report, released in 2022, also found a severe shortage of diversity in the industry, with white people disproportionately representing every market category. Black and Latino/a individuals accounted for less that 10 percent of supervisory positions.
The Illinois Department of Financial and Professional Regulation (IDFPR) released a report in October that stated the state’s marijuana industry experienced “unprecedented growth” in fiscal year 2023. A report from the Department of Financial and Professional Regulation in October said that the industry in Illinois experienced “unprecedented” growth during fiscal year 2023 and forecast future growth.
According to the Department of Revenue, Illinois collected nearly $100 million more in tax revenue from marijuana than alcohol in 2021. As in previous years, Illinois generated significantly more revenue than alcohol from cannabis, which amounted to about $316.3 millions.
During the fiscal year, 200 licenses with conditions were granted. The department finalized the rules for the Social Equity Criteria Lottery in December 2022. This lottery is aimed at giving priority to people who are disproportionately affected by the drug war. Over 2,600 people applied for 55 social equity dispensary licences.
IDFPR stated that it plans to issue 55 licenses for social equity in fiscal year 2024. It also intends to hire and onboard 8 new inspectors and processers “to reduce the time required to license businesses and individuals” and to increase public outreach. According to the report, IDFPR also plans to implement a new tracking program from seed to sale.
The department stated that “IDFPR is ready to continue issuing licenses to dispensaries and is committed in promoting social equality, safety and growth within the regulated cannabis industry.”
According to state sales data recently released, retailers have sold adult-use cannabis products worth a record of $140 million in August. In September, the state broke its own record for individual products sold in the adult-use cannabis market. However, total sales were slightly less at $139.5 millions.
Gov. J.B. Pritzker highlighted the strong sales and industry growth , in September, while downplaying the state’s relatively high retail prices. Illinois, according to an Illinois Policy Institute analysis, is the third largest retail marijuana market in the United States after Michigan and California.
Pritzker stated, “We have a growing sector, which you may know is an industry that I started in 2019. It has generated almost $450 millions for state and local governments.” “We want all industries to grow.”
Pritzker who supported the legalization of marijuana in the state recently signed a law allowing licensed marijuana business to claim tax deductions from state as a partial solution to Internal Revenue Service’s (IRS) Tax Code 280E.
Ohio voters will decide on a marijuana legalization ballot initiative on Tuesday as polls show strong support
Photo by Chris Wallis // Side Pocket Images.
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