State targets Paris for development of cannabis business

Realistically, unlikely a disensary will open in Paris in near future

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The Illinois Department of Commerce and Economic Opportunity (DCEO) has declared much of Paris and some of the unincorporated rural areas adjacent to the city as an impacted area for the development of cannabis businesses.

Such action is in preparation for when recreational use of cannabis becomes legal Jan. 1, 2020. DCEO recently announced 683 places, including Paris, are considered disproportionately impacted areas. The designation means a particular area has had a high rate of arrest, conviction and incarceration related to cannabis. Poverty and unemployment figures are also taken into account as part of the determination.

The state is seeking what officials are calling social equity applicants to operate recreational cannabis businesses in the impacted areas.

“Not only will social equity applicants receive points on their applications, but many applicants will also get grants, technical assistance, low-interest loans and fee reductions and waivers,” Governor JB Pritzker is credited as saying in the press release.

To qualify as a social equity applicant, the statute requires those seeking a license to sell cannabis to have Illinois residency and meet one of the following criteria:

-At least 51 percent ownership and control by one or more individuals who have resided at least five of the preceding 10 years in a disproportionately impacted area.

-At least 51 percent ownership and controlled by one or more individuals (or family member of an individual) who have been arrested for, convicted of or adjudicated as delinquent for a cannabis offense that qualifies to be expunged; or

-Applicants with a minimum of 10 fulltime employees with at least 51 percent of those employees who either reside in a disproportionately impacted area or have been arrested, convicted or adjudicated as delinquent for cannabis offenses that are now eligible to be expunged.

Local officials doubt Paris will see a pot shop selling recreational cannabis for smoking or infusing into food anytime soon.

Illinois already has 55 medical marijuana dispensaries scattered through the state. The closest such facility is in Effingham. As part of the new law regulating adult use cannabis stores, the Illinois Department of Licensing is supposed to have 75 new licenses ready for use by May. Cook County and the Collar Counties will get 47 of those licenses, leaving 28 for the rest of the state, which are getting distributed by zones.

Edgar County is part of a 13-county zone that is to receive two adult use licenses. The Effingham dispensary has already secured one of those licenses so only one remains available for 13 counties. While being within an impacted area is supposed to help with the application process, Paris is not the only impacted community in the zone. Parts of Mattoon, Effingham and Robison are also impacted zones, as is a large swath of rural Fayette County.

Paris Mayor Craig Smith said the city council has not taken any action to opt out of the state law permitting the adult use retail stores, and he is unaware of any sentiment on the council to do so.

“If anybody has a rich uncle and wants to start a business, we won’t stand in the way of an entrepreneurial spirit,” Smith said.

The rich uncle part is key to understanding this. Operating a pot store in Illinois will not be a shoestring mom and pop type of business or something that can be operated out of the home.

For example, the medical dispensary license has a $30,000 non-refundable application fee, which the state collects whether one gets the license or not. There is another application fee that cannot exceed $100,000. The annual renewal fee is also $100,000. The medical dispensaries are also required to have $400,000 in liquid assets and a $50,000 escrow account.

The fees for an adult use store are not that steep, but they are not inconsequential. There is a non-refundable $5,000 application fee and a $30,000 license fee. DCEO does have a $20 million fund to help social equity applicants with reduced fees and loans.

State help may not be enough. One website promoting services in helping start a recreational pot store claims the investment will total near $1 million in licenses, fees, insurance, land acquisition, building requirements, security systems to include multiple closed circuit cameras and alarms and the payroll will include security guards in addition to sales clerks and retail managers.

Paris city attorney Rich Kash said the idea of the impact zones is to create social equity for people convicted under the old cannabis laws, but he doesn’t see it having much impact on the majority of people in this area convicted of cannabis offenses who had difficulty paying fines of less than $200 within a six-month time frame.

Kash noted if the city council does not opt out of the state law permitting cannabis sales, the council should pass the 3 percent tax allowed on cannabis sales just in case such a business locates here.

The Edgar County Board has not taken any action regarding the new cannabis law. Board chairman Jeff Voigt said there are two template ordinances available for county boards to use. One template is the opt out provision, which states the county is prohibiting the operation of a recreational cannabis store in the unincorporated areas. Failure to do so means the county is following state law and someone can open such a business in the county, if they can secure the state licenses. The second template is one permitting the county to place a 3.5 percent excise tax on sales at a retail pot shop located in the unincorporated areas.

County board members engaged in some discussion about the topic during the Monday, Oct. 7, study session.

Voigt anticipated a split opinion saying he knows some county board members oppose allowing cannabis sales in the county.

For board members John Chittick and Phil Ludington, it is inevitable recreational cannabis sales will eventually make it to Edgar County.

“There’s going to be some town in Edgar County that’s going to sell it,” said Chittick.

Ludington agreed, adding, “It’s going to happen. You can’t stop it.”

Board member Derrick Lorenzen endorsed the idea for the towns and cities but had reservations about allowing a retail pot store that might develop into a nuisance spot in the rural areas.

“If we can bring a business in and increase our tax base, I’m all for it,” said Lorenzen. “When Chrisman voted to allow alcohol sales there were dire predictions about public drunkenness in the street and increased crime. It didn’t happen, but there will always be bad actors, whether it is alcohol or pot.”

Study sessions are for discussing issues and no action was taken. The issue of pot sales was not on the agenda for the Wednesday, Oct. 9, county board business meeting.