Illinois marijuana industry still falling short on social equity in dispensary ownership, data shows

CHICAGO (WLS) -- There is a lot of money to be made in the Illinois marijuana industry - $1.5 billion in fact - but data analysis shows not everyone is getting an equal chance to cash in on cannabis.

State leaders touted legalization as a chance to repair the damage done to communities of color which were hit hardest by the war on drugs. But has that happened? State leaders say they are still working to level the playing field.

Tiffany Hightower and Kareem Kenyatta are part-owners of Star Buds, one of the state's newest marijuana dispensaries.

"No one would have thought that this would be a moment in time where we could really look at being owners," Hightower said.

There are a total of 118 dispensaries in the state. Star Buds is one that is majority Black-owned.

"And really look at creating this space to increase generational wealth in something that had been so criminalized previously," Hightower said.

"Just to see it actually built; being Black History Month, for it all to come together during this time, it's amazing," said Kenyatta.

Star Buds is one example the state hopes will inspire other people of color interested in the cannabis industry. But analysis by the ABC7 data team shows that Illinois' efforts to make the industry more equitable may be falling short.

According to a 2022 state report, Black people made up only 1% of majority dispensary owners, as did Hispanic majority owners. Eighty-eight percent of the state's dispensaries are white majority owned, and the remaining businesses are majority owned by people of two or more, or other races. However, a diversity survey conducted by the state Cannabis Regulation Oversite Officer (CROO) finds Black licensees make up closer to 25% majority owners. The survey was sent to cannabis companies who self-reported the diversity of their owners and executives as of 2021.

Erin Johnson, who oversees marijuana operations for Illinois, said her office is working to level the playing field.

"Black and brown communities have been over-policed and have been disproportionately affected by the war on drugs, and so part of the reason the social equity program exists is really to make sure that we can right those wrongs," she said.

The state's social equity program provides cannabis licenses to applicants who meet some of the following criteria: have lived in a low-income area for five of the last 10 years; have an arrest or marijuana conviction that is eligible for expungement; and employ more than 10 people who reside in an area with higher rates of people incarcerated for marijuana charges.

Johnson said of the conditional 192 social equity licenses awarded in July, 40% are majority Black-owned.

"And that's what the challenge is," said Eric Ice-Gipson, founder of the 1937 Group. "This is a money-intensive industry."

The 1937 Group is an organization that promotes equity and inclusion in the cannabis industry. Ice-Gipson said of the 192 social equity licenses granted, only eight social equity dispensaries have actually opened. Not having enough money can be an obstacle.

"You are asking people who have been left out of an industry, and now asking them to have a network of individuals who have multiple millions of dollars. And that's just not something that most of us have access to," he said.

Ice-Gipson is thankful for state and private funding, which has helped in his quest to open his craft grow business, but said he and other businesses are still struggling to become operational. He said other requirements must be changed to allow owners more time to raise capital.

"The law says from the moment you win the license, you have 180 days to be operational. That absolutely needs to change. That is untenable for most of us," he said.

According to the state, conditional licensees may also apply for a 180-day extension for their conditional license if they "demonstrate concrete attempts to secure a location and a hardship." The extension application may be found here.

Johnson said to remove the barriers some owners may face, the state offers a direct forgivable loans program.

"There's always room for improvement. But we are definitely, without a doubt, the most diverse cannabis industry in the country, and other states are using our system as a model," she said.

Meanwhile, Hightower and Kenyatta are basking in the glory as the new owners of Star Buds, and hope to be an example for future Black owners in cannabis.

"I think a big part of this is showing people that it is possible," Kenyatta said.

Illinois is still accepting applications for 55 more social equity cannabis dispensary licenses. The deadline to apply has been extended to Friday, March 10.

The state also said it is working to expand outreach into Black and brown communities to explain the application process, the loans that are available, and to try to break down some of the barriers in the industry.