Pubdate: Tue, 11 Feb 2014
Source: Chicago Tribune (IL)
Copyright: 2014 Chicago Tribune Company
Author: Robert McCoppin


Proposed State Rules Put Cost to Open Shop at Close to

Illinois regulators have come out with proposed requirements for
opening medical marijuana grow centers and dispensaries - and they
come with a steep price tag that advocates say could be costly for

For dispensaries to sell the pot, state officials proposed a $5,000
nonrefundable application fee, proof of $400,000 in assets, a $30,000
permit fee and a yearly permit renewal fee of $25,000.

For cultivation centers, the Department of Agriculture proposed a
$25,000 nonrefundable application fee, $250,000 in liquid assets,
payment of $200,000 upon approval of a permit and a renewal fee of

The costs are sure to eliminate a lot of potential entrepreneurs, said
Joseph Friedman, a pharmacist from Lincolnshire who hopes to open a

"Probably 50 percent of the wannabes are now out," he said. "This is
going to bring out just the serious players who are well-capitalized
and well-credentialed."

The 71 pages of proposed regulations for dispensaries, released
Friday, are daunting even for established businesses and will likely
require close to six figures in additional fees to attorneys, auditors
and engineers, said Nick Williams. He is general counsel for Normal,
Ill.- based HW Holdings, which owns a chain of eyeglass stores
throughout Illinois and is looking to get into the medical marijuana

Williams' firm favors strict regulations to establish a reputable
business, and he anticipates it may take a year of losses before
dispensaries turn a profit.

"A lot of people are going to say, 'My good Lord, this is a lot to
come to the table with,' " he said.

Chris Lindsey, legislative analyst for the nonprofit advocacy group
Marijuana Policy Project, warned that those expenses will be passed on
to consumers.

"The costs appear excessive for cultivation centers," he said. "I
would hope regulators will consider what negative impacts these fees
would have."

Dispensary applicants will be scored on a long list of requirements
for their business and security plans, including fingerprinting and
criminal background checks on owners, operators and patients, and
24-hour video surveillance that must be viewable online by state
police and regulators.

A new Illinois law took effect this year to allow medical marijuana
for patients diagnosed with any of about three dozen specific medical

But because of the lengthy regulatory process, industry watchers do
not expect marijuana to be available to the public until sometime in

The law allows for 22 grow centers and 60 dispensaries spread around
the state. Proposed rules call for 13 dispensaries in Chicago; 11 in
suburban Cook County; three each in DuPage, Kane, Lake and Will
counties; one each in McHenry and DeKalb counties; and one shared
between Grundy and Kendall counties.

The rest of the state would get one dispensary per Illinois State
Police district.

Regulators said they welcomed public comment on the proposed rules.
Input can be emailed to  For the
taxation rules, email  and for cultivation
center rules, email  
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MAP posted-by: Jo-D