Section 1291.10  Definitions

 

Terms not defined in this Section shall have the same meaning as in the Cannabis Regulation and Tax Act [410 ILCS 705].  Nothing in this Part is intended to confer a property or other right, duty, privilege or interest entitling an applicant to an administrative hearing upon denial of a dispensing organization application.  The denial of a dispensing organization application does not preclude judicial review of the denial.  The following definitions are applicable for purposes of this Part:

 

"Act" means the Cannabis Regulation and Tax Act [410 ILCS 705].

 

"ADA" means the Americans With Disabilities Act of 1990 (42 U.S.C. 12101).

 

"Address of record" means the address record by the Department in the applicant’s application file maintained by the Department.

 

"Adult Use Dispensing Organization License" means a license issued by the Department that permits a person to act as a dispensing organization under this Act and any administrative rule made in furtherance of this Act.

 

"Affiliate" means a Person who directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, that Person.

 

"Affiliated entity" means any business entity that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the Person.

 

"Applicant" means the proposed dispensing organization name as stated on a license application.

 

"Application date" is the date an application for approval was received by the Department.

 

"Application points" means the number of points a Dispensary Applicant receives on an application for a Conditional Adult Use Dispensing Organization License.

 

"Application submission window" means the period between August 1^st and August 15^th of every odd numbered year during which the Department will receive applications to be approved as a Responsible Vendor Provider unless the date falls on a holiday or weekend in which case the window is extended to the next business day.  The application submission window shall close at 5 p.m. central time on the final day on which applications are accepted.

 

"Approved list" is the list of providers.

 

"BLS region" means a region in Illinois used by the United States Bureau of Labor Statistics to gather and categorize certain employment and wage data.  The 17 regions in Illinois are:  Bloomington, Cape Girardeau, Carbondale-Marion, Champaign-Urbana, Chicago-Naperville-Elgin, Danville, Davenport-Moline-Rock Island, Decatur, Kankakee, Peoria, Rockford, St. Louis, Springfield, Northwest Illinois nonmetropolitan area, West Central Illinois nonmetropolitan area, East Central Illinois nonmetropolitan area, and South Illinois nonmetropolitan area. (Section 1-10 of the Act)

 

"Bulk cannabis inventory" means cannabis and cannabis-infused products stored in the reinforced vault in clear, heat-sealed or taped shrink wrap bags or sheeting that is labeled with the date the inventory is sealed, the last four digits of the batch number, the number of items contained within the wrapping, and the date the inventory was last counted.  Bulk Cannabis Inventory is included in the dispensing organization’s total inventory available for sale.

 

"By lot" means a randomized method of choosing between two or more applicants.

 

"Cannabis" means marijuana, hashish, and other substances that are identified as including any parts of the plant Cannabis sativa and including:

 

derivatives or subspecies, such as indica, of all strains of cannabis, whether growing or not;

 

the seeds thereof, the resin extracted from any part of the plant; and

 

any compound, manufacture, salt, derivative, mixture or preparation of the plant, its seeds, or resin, including tetrahydrocannabinol (THC) and all other naturally produced cannabinol derivatives, whether produced directly or indirectly by extraction.

 

"Cannabis" does not include:

 

the mature stalks of the plant;

 

fiber produced from the stalks, oil or cake made from the seeds of the plant;

 

any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted from it), fiber, oil or cake, or the sterilized seed of the plant that is incapable of germination; 

 

industrial hemp as defined and authorized under the Industrial Hemp Act [505 ILCS 89]. 

 

"Cannabis" does include cannabis flower, concentrate, and cannabis-infused products.

 

"Cannabis business establishment" means a cultivation center, craft grower, processing organization, infuser organization, dispensing organization, or transporting organization.

 

"Cannabis flower" means marijuana, hashish, and other substances that are:

 

identified as including any parts of the plant Cannabis sativa and including derivatives or subspecies, such as indica, of all strains of cannabis; and

 

raw kief, leaves, and buds

 

"Cannabis flower" does not include resin that has been extracted from any part of a plant, nor any compound, manufacture, salt, derivative, mixture, or preparation of a plant, its seeds, or resin.

 

"Cannabis-Infused product" means a beverage, food, oil, ointment, tincture, topical formulation, or another product containing cannabis or cannabis concentrate that is not intended to be smoked.

 

"Conditional license" means a Conditional Adult Use Dispensing Organization License.

 

"Department" means the Department of Financial and Professional Regulation.

 

"Dispensary Applicant" means the proposed dispensing organization name as stated on an application for a Conditional Adult Use Dispensing Organization License.

 

"Dispensing organization" means a facility operated by an organization or business that is licensed by the Department to acquire cannabis from a cultivation center, craft grower, processing organization, or another dispensary for the purpose of selling or dispensing cannabis, cannabis-infused products, cannabis seeds, paraphernalia, or related supplies under the Act to purchasers or to qualified registered medical cannabis patients and caregivers.  As used in this Part, “dispensing organization” includes a registered medical cannabis organization as defined in the Compassionate Use of Medical Cannabis Program Act [410 ILCS 130] or its successor Act that has obtained an Early Approval Adult Use Dispensing Organization License. (Section 1-10 of the Act)

 

"Dispensing Organization License" or "License" means any Early Approval Adult Use Dispensing Organization License, Conditional Adult Use Dispensing Organization License, or Adult Use Dispensing Organization License.

 

"Dispensing organization agent ID card" or "agent ID card" means a document issued by the Department that identifies a person as a dispensing organization agent, agent-in-charge, or principal officer.

 

"DOA" means the Illinois Department of Agriculture.

 

"DPH" means the Illinois Department of Public Health.

 

"Email address of record" means a primary or alternate contact email address recorded by the Department in the applicant’s application file maintained by the Department.

 

"Eligible applicant" means a tied applicant eligible to participate in the process by which a remaining available license is distributed by lot.

 

"Firearm injury" means a gunshot wound or penetrating injury from a weapon that uses a powder charge to fire a projectile.  Weapons that use a power charge include handguns, rifles, and shotguns.  Injuries from air- and gas-powered guns, BB guns, and pellet guns are not considered firearm injuries as these types of guns do not use a powder charge to fire a projectile.

 

"HIPAA" means the Health Insurance Portability and Accountability Act of 1996 (P.L. 104-191) and the HIPAA Privacy Rule as found at 45 CFR 164.

 

"Individual" means a natural person.

 

"ISP" means the Illinois State Police.

 

"Laboratory" means an independent laboratory located in Illinois and approved by DOA to have custody and use of controlled substances for scientific and medical purposes and for purposes of instruction, research or analysis.

 

"Member of an impacted family" or "impacted family member" means an individual who has a parent, legal guardian, child, spouse, or dependent, or was a dependent of an individual who, prior to June 25, 2019, was arrested or convicted of, or adjudicated delinquent for any offense that is eligible for expungement under the Act. (Section 1-10 of the Act)

 

"Notify" means to send via regular United States mail or email.

 

"On-site instruction" means class is held at a physical location in-person or remotely by real-time video technology tools.

 

"Person" means a natural individual, firm, partnership, association, joint stock company, joint venture, public or private corporation, limited liability company, or a receiver, executor, trustee, guardian, or other representative appointed by order of any court. (Section 1-10 of the Act)

 

"Principal officer" includes a cannabis business establishment applicant or licensed cannabis business establishment's board member, owner with more than 1% interest of the total cannabis business establishment or more than 5% interest of the total cannabis business establishment of a publicly traded company, president, vice president, secretary, treasurer, partner, officer, member, manager member, or person with a profit sharing, financial interest, or revenue sharing arrangement.  This definition includes a person with authority to control the cannabis business establishment or a person who assumes responsibility for the debts of the cannabis business establishment. (Section 1-10 of the Act)

 

"Qualifying Applicant" means an applicant that submitted an application pursuant to Section 15-30 of the Act that received at least 85% of 250 application points available under Section 15-30 as the applicant’s final score and meets the definition of “Social Equity Applicant” as defined in the Act. (Section 1-10 of the Act)

 

"Reinforced vault" means a room built to the specifications listed in Section 1291.220(g).

 

"Remaining available license" means a license in a BLS region that has not been awarded by the Department at the conclusion of the scoring process period.  There may be more than one remaining available license in a BLS region.  For example, if four licenses are available in a BLS region and the five highest scoring Dispensary Applicants receive scores of 245, 240, 235, 235, and 235 points, the applicants receiving 245 and 240 application points will be awarded licenses and the three applicants receiving 235 points may become Eligible Applicants.  Likewise, if one license is available in a BLS region and there are five Dispensary Applicants with the highest score, all five Dispensary Applicants may become Eligible Applicants.

 

"Scoring process period" is the period of time between the conclusion of the submission period for a conditional license application and when the Department publishes the names of tied applicants that may become eligible applicants.

 

"Secretary" means the Secretary of the Department of Financial and Professional Regulation.

 

"State verification system" means a web-based system established and maintained by the State of Illinois that is available to the Department, DOA, ISP, and dispensing organizations for the tracking of the date of sale, amount, and price of cannabis purchased by purchasers.

 

"Tied applicant" means an application submitted by a Dispensary Applicant pursuant to Section 15-30 of the Act that received the same number of application points under Section 15-30 of the Act as the Dispensary Applicant’s final score as one or more top-scoring applications in the same BLS region and would have been awarded a license but for the one or more other top-scoring applications that received the same number of application points.  Each application for which a Dispensary Applicant was required to pay a required application fee for the application period ending January 2, 2020 shall be considered an application of a separate Tied Applicant. (Section 1-10 of the Act)

 

"Top participant" means an applicant drawn by lot in a winning slot such that it has the opportunity to be issued a conditional license.

 

"Victim" means

 

a person injured as a result of a firearm injury perpetrated or attempted against them;

 

the spouse, parent, or child of a person killed or injured as a result of a firearm injury perpetrated or attempted against the person, or anyone living in the household of a person killed or injured in a relationship that is substantially similar to that of a parent, spouse, or child;

 

a person injured while attempting to assist a person against whom a firearm injury is being perpetrated or attempted, if that attempt of assistance would be expected of a reasonable person under the circumstances;

 

a person injured while assisting a law enforcement official apprehend a person who has perpetrated a firearm injury or prevent the perpetration of any such crime if that assistance was in response to the express request of the law enforcement official; or

 

a person who personally witnessed a firearm injury. 

 

The victim must not be the offender in the criminal act and must not have provoked or incited the crime.

 

(Source:  Amended at 46 Ill. Reg. 20783, effective December 13, 2022)

 

Section 1291.50  Tied Applicant

 

a)         A tied applicant may qualify as an eligible applicant subject to the following:

 

1)         A tied applicant is prohibited from becoming an eligible applicant if a principal officer of the tied applicant is a principal officer of more tied applicants than the number of remaining available licenses.  For example, if an individual is a principal officer of four tied applicants and there are two remaining available licenses, no more than two of those tied applicants may become eligible applicants.

 

2)         A tied applicant is prohibited from becoming an eligible applicant if a principal officer of a tied applicant resigns after the conclusion of the scoring process period.

 

3)         A tied applicant is prohibited from becoming an eligible applicant if, after the conclusion of the declination period identified in subsection (b), a principal officer of the applicant is a principal officer of more tied applicants than the number of remaining available licenses.

 

b)         A tied applicant may decline to become an eligible applicant by informing the Department within five business days after the conclusion of the scoring process.  The declination must be submitted on forms approved by the Department.

 

c)         If, at the conclusion of the scoring process period, there are two or more eligible applicants, the Department may distribute the remaining available licenses by lot subject to the following:

 

1)         The Department shall publish a list of eligible applicants at least five business days before the day the remaining available licenses are distributed.

 

2)         The drawing by lot for all remaining available licenses will occur on the same day.

 

3)         For each BLS region, the Department will draw a number of eligible applicants equal to five times the number of remaining eligible applicants.

 

4)         Within each BLS region, the first eligible applicant drawn will have the first right to a remaining available license.  The second eligible applicant drawn will have the second right to a remaining available license.  The same pattern will continue for each subsequent eligible applicant drawn.

 

5)         The process for distributing remaining available licenses will be recorded by the Department in a format selected by the Department.

 

6)         If, upon being selected for a remaining available license, the eligible applicant has a principal officer that is a principal officer in more than 10 Early Approval Adult Use Dispensing Organization Licenses, Conditional Adult Use Dispensing Organization Licenses, Adult Use Dispensing Organization Licenses, the licensees and the eligible applicant listing that principal officer must choose which license to abandon pursuant to Section 15-36(d) of the Act, and notify the Department in writing within the timeframe identified in 1291.50(b).  If the eligible applicant or licensees do not notify the Department as required, the Department will refuse to issue to the eligible applicants all remaining available licenses obtained by lot in all BLS regions. 

 

7)         All remaining available licenses that have been abandoned shall be distributed to the next eligible applicant drawn by lot.  If there are no additional eligible applicants, the license shall be awarded to the applicant receiving the next highest number of application points in the BLS region. 

 

Section 1291.95  Tax Delinquency

 

a)         The Department will deny issuance or renewal of a Conditional Adult Use Dispensing Organization License or Adult Use Dispensing Organization License if any principal officer, board member, and/or person having a financial or voting interest of 5% or greater in the licensee or applicant is delinquent in filing any required tax return or paying any amount owed to the State of Illinois.

 

b)         The Department will notify the applicant or licensee of any determination by the Illinois Department of Revenue that any principal officers, board members, and/or persons having a financial or voting interest of 5% or greater in the licensee or applicant are delinquent in filing any required tax return or paying any amount owed to the State of Illinois.

 

c)         Upon notification of tax delinquency being sent by the Department to the applicant or licensee, the applicant or licensee shall have 60 days to provide the Department proof that the applicant or licensee is no longer delinquent in filing any required tax return or paying any amount owed to the State of Illinois, as determined by the Illinois Department of Revenue.

 

d)         If after 60 days the applicant or licensee has not provided the Department proof that the applicant or licensee is no longer delinquent in filing any tax return or paying any amount owed to the State of Illinois, the Department will deny issuance or renewal of a conditional license or Adult Use Dispensing Organization License.

 

(Source:  Added at 45 Ill. Reg. 16320, effective December 7, 2021)

 

Section 1291.220  Relocation of an Early Approval Adult Use Dispensing Organization

License at a Same Site

 

a)         Early Approval Adult Use Dispensing Organizations ("Same-site Licensee") whose licenses were issued pursuant to Section 15-15 of the Act may submit an application on forms provided by the Department to relocate their dispensary.

 

1)         Same-site Licensees who apply to relocate their dispensaries to a new location pursuant to this Part may be approved, subject to all other statutory and administrative requirements, if:

 

A)        the proposed location is within the same geographic district, as those geographic districts are defined in 68 IAC 1290.20, as the Same-site Licensee’s existing associated medical cannabis dispensing organization registration issued under the Compassionate Use of Medical Cannabis Program Act is authorized to operate; and

 

B)        the Same-site Licensee’s existing location is within the boundaries of a unit of local government that prohibits the retail sales of adult use cannabis; or

 

C)        the Same-site Licensee has obtained a signed statement from a city manager, village president, mayor, corporate counsel, or other official from the unit of local government where it is located approving the Same-site Licensee to relocate to another location within that unit of local government.  If the unit of local government is a county, it must obtain signed statements from the county executive, county president, corporate counsel, or other official from the county board where it is located approving the Same-Site Licensee to relocate to another location within that county.

 

2)         The Same-site Licensee shall submit the fee required for the relocation of its existing associated medical registration.  This is the only fee required for the Same-site Licensee to relocate under this Section.

 

b)         The Department shall approve or deny an application to relocate under subsection (a) within 30 days after receiving a completed application.

 

c)         If the Department does not approve or deny an application to relocate under subsection (a) within 30 days after receiving a completed application, the application shall be deemed to be approved.

 

d)         If the Department denies an application to relocate pursuant to subsection (a), it shall do so in writing and provide a specific reason for the denial.

 

e)         An application to relocate shall be deemed complete upon submission of all documents (e.g., zoning approval) required by the application form provided by the Department.

 

f)         If, upon reviewing the application, the Department discovers any documentation required by the Department’s application to relocate are missing, the Department may request the missing documentation.  In this case, the application is not complete until the missing documentation is submitted.

 

g)         After receiving the Department’s approval to relocate under subsection (a), the Same-site Licensee shall submit floorplans of the new location for the Department’s approval in a form or manner prescribed by the Department and the Act.  The Department shall approve or deny the floorplans within 10 business days of the Department's receipt of the floorplans.

 

h)         Prior to the commencement of operations at a new location that was approved by the Department under subsection (a), the Same-site Licensee must also pass a building and site inspection conducted by the Department to ensure compliance with the Act.  The Same-site Licensee shall request a building and site inspection of the new site on forms provided by the Department.  The Department shall schedule a building and site inspection within 10 business days upon receiving the Same-site Licensee's request for a building and site inspection.

 

(Source:  Added at 46 Ill. Reg. 2660, effective January 28, 2022)

 

Section 1291.400  Conditional License Lottery under Section 15-35.20(c) of the Act

 

a)         The Department may distribute no more than 55 conditional licenses by lot pursuant to the requirements of Section 15-35.20(c) of the Act and this Part.

 

b)         The requirements contained in Sections 1291.400 through 1291.440 shall only apply to the 55 conditional licenses issued pursuant to Section 15-35.20(c) of the Act.

 

c)         All licenses issued pursuant to this Section shall be drawn by lot on the same day to the extent possible.

 

d)         Prior to conducting any lottery pursuant to this Section, the Department shall publish on its website a list of all applicants eligible to participate in the lottery.

 

e)         After the Department publishes the list of applicants eligible to participate in the lottery, all applicants shall have 5 business days to contest the Department’s list of applicants eligible to participate in the lottery.  Any contestation must be filed on the form published on the Department's website and submitted in the manner included on that form.

 

f)         The Department will revise and republish its list of applicants eligible to participate in the lottery if it concludes that any applicants were improperly included or excluded. The republished list of applicants is not subject to contestation under subsection (e). The Department is not required to provide any additional opportunities to contest the list of applicants eligible to participate in the lottery beyond the initial contest period described in subsection (e).

 

g)         The Department may conduct a lottery at any time after the 5-business day period to contest the list of lottery participants has concluded.

 

h)         The publishing of the list of applicants to participate in the lottery, and any revised list, is not a final agency decision.  Any opportunity to contest the list shall not be considered a rehearing or an action for administrative review.

 

i)          The Department will publish the certified results of the lottery. 

 

(Source:  Added at 46 Ill. Reg. 20783, effective December 13, 2022)

 

Section 1291.405  Conditional License Distribution under Section 15-35.20(c) of the Act

 

a)         To ensure the geographic dispersion of conditional license holders, the following number of licenses issued as a result of any lottery conducted pursuant to Section 1291.400 shall be awarded in each BLS Region in the following amounts:

 

1)         Bloomington:  1

 

2)         Cape Girardeau:  1

 

3)         Carbondale-Marion:  1

 

4)         Champaign-Urbana:  1

 

5)         Chicago-Naperville-Elgin:  36

 

6)         Danville:  1

 

7)         Davenport-Moline-Rock Island:  1

 

8)         Decatur:  1

 

9)         Kankakee:  1

 

10)        Peoria:  2

 

11)        Rockford:  1

 

12)        St.  Louis:  3

 

13)        Springfield:  1

 

14)        Northwest Illinois nonmetropolitan:  1

 

15)        West Central Illinois nonmetropolitan:  1

 

16)        East Central Illinois nonmetropolitan:  1

 

17)        South Illinois nonmetropolitan:  1. (Section 15-35(a) and 15-35.10(a) of the Act)

 

b)       Applicants are prohibited from applying in more than one BLS region and are limited to one application in that BLS region.  If an applicant submits more than one application, the applicant forfeits all applications from entry into the lottery and is prohibited from being a top participant.

 

c)         Within each BLS Region, the first applicant drawn will have the first opportunity to a conditional license.  The second applicant drawn will have the second opportunity to a conditional license.  The same pattern will continue for each subsequent applicant drawn.

 

(Source:  Added at 46 Ill. Reg. 20783, effective December 13, 2022)

 

Section 1291.410  Conditional License Lottery Application under Section 15-35.20(c) of the Act

 

a)         The Department will publish an online application for applicants on the Department's website.  Paper applications will not be accepted.

 

b)         After publishing the online application, the application submission window shall remain open for submissions for a minimum of 10 business days.  Applications must be submitted by 5:00 P.M. Central Time on the last day of the application submission window and no applications will be accepted after the application submission window closes.

 

c)         A principal officer cannot be on more than one application.  The Department shall require that all applicants provide each of its principal officers’ Social Security Numbers or Individual Taxpayer Identification Number, and any other unique, identifying information, required in the application to ensure that an individual principal officer is not listed as a principal officer on more than one application.

 

d)         All applicants shall pay a non-refundable application fee of $250, to be deposited into the Cannabis Regulation Fund.

 

e)         An application shall be accepted only if it is complete.  All incomplete applications shall be denied.  A completed application shall include the nonrefundable fee and, at a minimum, the following information:

 

1)         the applicant’s proposed entity name;

 

2)         the name of the persons filling out the application;

 

3)         the BLS Region in which the applicant is applying;

 

4)         the names, Social Security Numbers or Individual Taxpayer Identification Number, home addresses, birthdates, phone numbers, and email addresses, for all proposed principal officers of the proposed entity;

 

5)         the identification of and contact information, including phone number and email address, for a primary and alternate contact of the proposed entity, at least one of whom must also be a principal officer;

 

6)         an acknowledgment that if awarded an opportunity for a conditional license in the lottery,  the business entity is 51% or more owned or controlled by one or more individuals who each meet the combination of at least one or the criteria under subsection (e)(6)(A) (Criteria A) and one of the criteria under subsection (e)(6)(B) (Criteria B).  This does not mean multiple individuals need to meet identical criteria, but each individual must meet at least one criteria from Criteria A and one criteria from Criteria B.

 

A)        Criteria A (only 1 required):

 

i)          An individual who has resided for at least 5 of the preceding 10 years in a census tract that has a poverty rate of at least 20% according to the latest 5-year American Community Survey (Table S1701: Poverty Status in the Past 12 Months) that is publicly available at the start of the application submission window for the lottery conducted under Sections 1291.400 through 1291.440. The data set is available at https://data.census.gov/cedsci/table?q=poverty%20rate&g=0100000US%241400000&tid=ACSST5Y2020.S1701;

 

ii)         An individual who has resided for at least 5 of the preceding 10 years in a census tract where at least 20% of the households receive assistance under the Supplemental Nutrition Assistance Program in the latest 5-year American Community Survey (Table S2201: Food Stamps/Supplemental Nutrition Assistance Program (SNAP)) that is publicly available at the start of the application submission window for the lottery conducted under Sections 1291.400 through 1291.440. The data set is available at https://data.census.gov/cedsci/table?q=snap%20participation&g=0100000US%241400000&tid=ACSST5Y2020.S2201;

 

iii)        An individual who has resided for at least 5 of the preceding 10 years in a census tract area classified as "low income and low access" where at least 100 households are more than one-half mile from the nearest supermarket and have no access to a vehicle or a significant number (at least 500 people) or share (at least 33%) of the population is greater than 1 mile from the nearest supermarket, supercenter, or large grocery store for an urban area or greater than 20 miles for a rural area, as classified by the latest United States Department of Agriculture Economic Research Service's Food Access Research Atlas data set that is publicly available at the start of the application submission window for the lottery conducted under Sections 1291.400 through 1291.440.  The data set is available at the United States Department of Agriculture Economic Research Service's Food Access Research Atlas, is available at https://www.ers.usda.gov/data-products/food-access-research-atlas/go-to-the-atlas;

 

iv)        An individual who has received Medicaid, Supplemental Security Income, Social Security Disability, and/or subsidized housing for at least 5 of the preceding 10 years; and/or,

 

v)         An individual who has resided for at least 5 of the preceding 10 years in a census tract in the top 15^th percentile for the percent of residents in the census tract failing to graduate from High School in that state, as classified by the latest 5-year American Community Survey (Table S1501: Educational Attainment) that is publicly available at the start of the application submission window for the lottery conducted under Sections 1291.400 through 1291.440. The data set is available at https://data.census.gov/cedsci/table?q=s1501&g=0100000US,%241400000

 

B)        Criteria B (only 1 required);

 

i)          An individual who has been arrested for, convicted of, or adjudicated delinquent for any offense, or substantially similar offense, of Illinois, federal or other state law for:

 

•           possession of not more than 500 grams of cannabis; or

 

•           manufacture, delivery, or possession with intent to deliver, or manufacture of cannabis up to 30 grams;

 

ii)         An individual who has a family member who has been arrested for, convicted of, or adjudicated delinquent for any offense, or substantially similar offense, of Illinois, federal, or other state law for:

 

•           possession of not more than 500 grams of cannabis; or

 

•           manufacture, delivery, or possession with intent to deliver, or manufacture or cannabis up to 30 grams.

 

iii)        An individual who has been a victim of firearm injury, as those terms are defined in this Part.  This must be evidenced by either a police report or medical record.

 

C)        As soon a reasonably possible, but no later than 5 business days prior to the acceptance of applications, the Department shall make publicly available the documents applicants may use to establish eligibility under both subsection (e)(6)(A) (Criteria A) and subsection (e)(6)(B) (Criteria B).

 

7)         An acknowledgment that if awarded a conditional license, neither the entity nor any of its principal officers will violate the Act’s license number limitations.

 

8)         The acknowledgement will also include a statement or indication that the applicant understands the timeframes to do so as required in this Part.

 

f)         If an applicant fails to meet and prove the criteria identified in subsection (e)(6)(A) (Criteria A) and subsection (e)(6)(B) (Criteria B) within 45 calendar days after the date of the notice of being a top participant from the Department and any required 10 business day deficiency period or 5 business day intent to deny periods as those periods are set forth in Section 1291.420, the Department shall deny issuance of a conditional license and proceed to the next top participant as described in Section 1291.405(c).

 

g)         If two or more applications include the same principal officer, the Department will notify the applicant at its identified primary and alternate contacts and the principal officer who is listed on two or more applications, via email.  Upon this notification, the identified principal officer has 3 business days to notify the Department of its resignation from all but one of the proposed entities.  This notification shall be submitted to the Department in writing to FPR.CannabisAdministration@illinois.gov.  If the identified principal officer does not notify the Department of the principal officer’s required resignation within the required time period, each applicant notified shall forfeit its application and nonrefundable fee.

 

h)         False Information

 

1)         If the Department determines that any information on an application or in supporting documents is not truthful, the applicant associated with that application will be prohibited from:

 

A)        participating in the lottery;

 

B)        being a top participant; and

 

C)        being issued a conditional license or Adult Use Dispensing Organization License. 

 

2)         The Department shall notify the next eligible top participant drawn by lot of its opportunity for the conditional license, in accordance with Section 1291.405(c).

 

i)          If a principal officer identified on an application dies after the applicant has submitted its application but prior to the conducting of any lottery, the applicant does not need to inform the Department unless the applicant becomes a top participant eligible for a conditional license after the lottery is conducted.  If the applicant becomes a top participant, the applicant is required to follow the process identified in Section 1291.420.

 

j)          The Department will only communicate with the applicant or top participant’s primary and alternate contact regarding the applicant or top participant’s application.  In order to change its primary or alternate contact information, an applicant or a top participant must submit a request to change from the current primary or alternate contact email address the Department has on record.

 

(Source:  Added at 46 Ill. Reg. 20783, effective December 13, 2022)

 

Section 1291.420  Conditional License Post Lottery Proof Requirements under Section 15-35.20(c) of the Act

 

a)         The Department will publish a list of supporting documents (e.g., mortgage statements, bank statement, government-issued identification) that an applicant must submit in order to prove it meets the criteria required in Section 1291.410(e)(6)(A) (Criteria A) and Section 1291.410(e)(6)(B) (Criteria B) to be issued a conditional license.  This list shall be published on the Department’s website on the same day the Department opens the application submission window.

 

b)         Top participants shall have 45 calendar days after the day the lottery is certified to submit all required supporting documents to the Department via FPR.CannabisAdministration@illinois.gov or via the State file share system available upon request to the same email address.

 

c)         After a top participant has submitted its supporting documents, the Department has at least 60 calendar days to review the documentation.

 

d)         If the Department determines that the supporting documents are insufficient, the Department shall issue a deficiency notice to that top participant.  The top participant shall have 10 business days after the date that appears on the deficiency notice to submit sufficient documentation.

 

e)         If the top participant fails to provide sufficient documents after this deficiency period, the Department shall inform a top participant of its intent to deny the issuance of a conditional license prior to any denial of a conditional license.

 

f)         Top participants shall have 5 business days after the date that appears on the notice of intent to deny to contest the Department’s decision. Any contestation must be filed in accordance with 68 Ill. Adm. Code 1110.

 

g)         The Department’s final order to either affirm or revoke its intent to deny constitutes a final agency decision and may be appealed under the Administrative Review Law [735 ILCS 5/3-101].

 

h)         If the Department informs a top participant of a deficiency or of its intent to deny the issuance of a conditional license because of one of the applicant’s principal officers has violated the Act or this Part, the principal officer may resign from the top participant (or another licensee) in order for the top participant to remain eligible for a conditional license.  Proof of this resignation shall be submitted to the Department on the form published on the Department's website and submitted in the manner included on that form.

 

i)          If a principal officer of a top participant resigns after that top participant has been notified of the Department’s intent to deny, that top participant may not replace the resigned principal officer.  If a principal officer of a top participant resigns after that top participant has been notified of the Department’s deficiency notice or intent to deny, and that top participant therefore becomes ineligible to meet the requirements of the Act and this Part, the Department shall deny that top participant a conditional license.

 

j)          If the Department affirms its intent to deny, the Department shall deny issuance of a conditional license and proceed to the next to participant as described in Section 1291.420.

 

k)         If the Department denies issuance of a conditional license to a top participant, the Department shall notify the next eligible top participant drawn by lot of its opportunity for the conditional license, in accordance with Section 1291.405(c).

 

l)          The Department may issue conditional licenses to top participants in the order in which they are received by the Department.  Nothing in this subsection (l) prevents the Department from issuing conditional licenses before all top participants have submitted all necessary documentation.

 

m)        If a principal officer of an applicant dies after the submission of any application, and that applicant is then selected as a top participant, the top participant shall present proof of death to the Department.  A deceased principal officer may be replaced only if that principal officer was necessary for the top participant to remain eligible to be issued a conditional license.  If a necessary principal officer of a top participant dies prior to issuance of the conditional license, the top participant shall have 45 calendar days after the death of that principal officer to submit proof of a replacement principal officer to the Department in order to remain eligible for a conditional license.

 

n)         The Department shall deny issuance of a conditional license if it would result in a single person or entity having a direct or indirect financial interest in more than 10 Early Approval Adult Use Dispensing Organization Licenses, conditional licenses, or Adult Use Dispensing Organization Licenses.  Any entity that is awarded a conditional license that results in a single person or entity having a direct or indirect financial interest in more than 10 licenses shall forfeit the most recently issued license and suffer a penalty to be determined by the Department in accordance with section 15-145 of the Act, unless the entity declines the license at the time it is awarded.  (Section 15-30(k) of the Act)

 

(Source:  Added at 46 Ill. Reg. 20783, effective December 13, 2022)

 

Section 1291.440  Conditional Licensee Requirements under Section 15-35.20(c) of the Act

 

a)         A conditional license cannot be sold, transferred, or assigned and the conditional license holder cannot in any way change its ownership structure, including by removing or adding any principal officers, except for in the event of the death of a principal officer.

 

b)         If a principal officer of a conditional license holder dies prior to the issuance of any Adult Use Dispensing Organization License under Section 15-36 of the Act, the conditional license holder shall inform the Department of the death and submit an updated table of organization.

 

c)         A principal officer may be added to the ownership structure of a conditional license holder only in the event of replacing a deceased principal officer, subject to the Department’s approval of that principal officer.  The Department will consider, but is not limited to, the proposed principal officer's role, qualifications, and the necessity of adding a principal officer when considering the new principal officer.

 

d)         The death of a principal officer following issuance of a conditional license shall not impact the conditional license holder’s eligibility to be issued an Adult Use Dispensing Organization License under Section 15-36 of the Act.

 

e)         Identifying a Physical Location

 

1)         A conditional license holder who receives a conditional license through any lottery conducted pursuant to Section 1291.400 has 365 calendar days after the date of issuance of the conditional license to identify a physical location for the dispensing organization retail storefront.  For purposes of this subsection (e), proof of identifying a physical location includes, but is not limited to, one of the following: 

 

A)        proof of building ownership by the top participant;

 

B)        agreement to purchase building or lease that is dependent on zoning or state license approval;

 

C)        signed lease for the term of the initial license; or

 

D)        proof of zoning approval or application for zoning approval. 

 

2)         A conditional license holder shall provide evidence that the location is not within 1,500 feet of an existing dispensing organization. 

 

3)         If a conditional license holder is unable to find a suitable physical address within 365 calendar days after the issuance of the conditional license, the Department may extend the period for finding a physical address another 180 calendar days if the conditional license holder demonstrates the steps it has taken to secure a location and hardship.  If the Department denies the request for an extension or the conditional license holder is unable to become operational within 545 calendar days after being awarded a conditional license, the Department will rescind the conditional license and may proceed to the next applicant drawn in accordance with Section 121.405(c).

 

(Source:  Added at 46 Ill. Reg. 20783, effective December 13, 2022)