Illinois Gov. J.B. Pritzker is scheduled Tuesday to sign a bill into law that will legalize cannabis in Illinois for adults. The bill’s signing is historic, but there’s a looming problem with Illinois’ program that has been largely ignored. Illinois is going to run out of cannabis.
Of course, who can forget when the governor of Nevada issued a statement of emergency because there were not enough distributors to supply the newly licensed adult-use dispensaries? The press had a field day,that a cannabis shortage caused a “state of emergency” in Nevada. Albeit sensationalized, the product shortage was very real.
But the biggest problem will be the lack of production capacity in the state. Illinois currently has a small medical cannabis program, with, when compared to most states. The state has issued 19 production licenses, controlled by fifteen businesses to cultivate and produce cannabis for the state’s dispensaries. These businesses will all be allowed to transition to serve the adult-use wholesale market in time for sales to begin on January 1.
With only fifteen businesses holding nineteen licenses to produce before the start of sales, we can expect to see stores selling out of adult-use cannabis in record time, with some stores likely to open and sell out on the first day of sales, only to have to shutter their doors until more product makes it to the wholesale market. When product is available, stores will have no choice but to artificially limit customer purchases in order to manage inventory and try to avoid having to close.
Don’t expect these product shortages, small purchase limits, and sky-high prices to go away any time soon. That’s because the state will not issue large-scale cultivation licenses to any businesses outside of the existing medical cultivators. These 19 licensees will each be allowed to operate a maximum of 210,000 sq. ft. of cultivation space.
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