September 17, 2019
Hot off announcing its nearly-$1 billion acquisition earlier this summer by the U.S. cannabis giant Curaleaf, Chicago-based Grassroots is now gearing up for legal adult cannabis use in Illinois, which is set to begin on January 1st.
The state became the 11th in the U.S. to legalize adult use of cannabis earlier this summer.
But the transition toward adult-use, Chief Operating Officer Matt Darin told Cheddar, won't be without a few bumps along the way.
For instance, just last month, the Illinois Department of Financial and Professional Regulation appeared to shift how it would handle the transfer of recreational licenses to already-licensed medicinal facilities — stirring confusion in the industry.
In its adult-use legislation, Illinois has allowed localities to opt-out of legalization and prevent it in their own districts. Already established medicinal clinics were reportedly under the impression that — should their localities not approve recreational adult-use — they could move their practices (and licenses) to other localities to offer both recreational and medicinal services.
But state officials have now begun to say that those facilities will not be able to move and sell recreational cannabis.
"That's a recent interpretation that has come out that we're all digesting," said Darin, though he emphasized that Grassroots is in close communication with local officials. "In the near term, it may result in having some dispensaries that will remain medical for a period of time."
"As is commonplace in the cannabis industry, the implementation of these adult-use laws oftentimes are not without hurdles. So I think [in] Illinois there'll be some of those as well, but I think we're all preparing very quickly to get ready to be open for January 1st."
The executive also eschewed the notion that the law overly-favored existing operators, calling it "even-handed."
"There's recognition that the pioneers in this industry that took a lot of risk and made a lot of investment during what was a slow growth of the medical opportunity, there's opportunity for them to continue to grow," he said. "But it also has a lot of dynamics for new licenses and new types of licenses that are going to come to the market, such as a craft growers and infusers."
As for consumers, Darin said that, come January, a supply shortage could occur, but that it will be a "short-term issue as people get ramped up."
Meanwhile, Grassroots and Curaleaf's merger is still awaiting the results of an antitrust review by the Department of Justice.