State issues final orders, but no medical marijuana facilities sited

State issues final orders, but no medical marijuana facilities sited

CHAMPAIGN — Now that state lawmakers have set the rules governing medical marijuana, the competition for a limited number of growing and dispensing licenses is heating up.

Local city and economic development officials say they have been fielding phone calls for months from individuals and groups seeking information about available properties and zoning rules as they try to secure sites for growing or dispensing the drug.

Erik Kotewa, deputy director of the Champaign County Economic Development Corporation, said he has fielded up to 10 calls — but made none — on the sensitive topic.

"If it creates jobs and the state thinks it's legal, that's fantastic," Koweta said, "but going after it as an industry of targeted attraction is not in our interest at this point."

In Vermilion County, Vicki Haugen said her economic development office has taken more than 20 calls from prospective owners of cultivation centers and dispensary sites. They haven't gotten anywhere, either, after a survey of Danville business owners and residents showed no support for the idea.

Illinois is one of 23 states to allow medical marijuana for people with certain medical conditions — and doctors' authorizations — after lawmakers approved a four year pilot program last year. But midway through July, no seeds have been planted, permits granted, prescriptions written or facilities approved.

That's about to change — slowly — with the Joint Committee on Administrative Rules signing off on final regulations this week, setting the stage for patients to begin applying for $100 medical marijuana ID cards in September.

Before patients gets their maximum 2.5 ounces per two weeks, however, the state must decide where the drugs will be grown (up to 21 cultivation centers, one per state police district, will be approved) and where they'll be sold (a maximum of 60 dispensaries will be allowed statewide).

In this region, that means just one cultivation center and at least one dispensary for all of District 10, which covers nine counties — Champaign, Vermilion, Coles, Douglas, Edgar, Macon, Moultrie, Piatt and Shelby. In the coming weeks, two state agencies will handle different aspects of the selection process — the Department of Agriculture will accept applications for growers, while the Department of Financial and Professional Regulation handles dispensaries. (Starting in September, a third agency — the Department of Public Health — will maintain the patient registry).

The rules to open either type of facility will require a major commitment, of time and money. The list includes background checks, financial assurances, hefty permit fees and proof they have secured appropriately zoned properties that meet stringent state requirements. That part may prove to be the trickiest.

Under state law, cultivation centers cannot be within 2,500 feet of residential areas, preschools, elementary schools, secondary schools or daycare facilities.

Dispensing sites cannot be not be within 1,000 feet of the same areas or facilities.

"The cultivator side is a little more challenging, because of the way the rules are written," Kotewa said.

Adam Bierman, managing partner of MedMen, a business consulting firm for the marijuana industry, said he expects about 300 applicants total for the 81 business licenses in Illinois.

Bierman, whose firm has led clients through the steps in other states, said there's a misconception that this process is just beginning now that the rules are finalized. For those most serious about getting into the medical marijuana business, he said, the process began a year ago.

Bierman anticipates his firm will have between 15 to 20 clients apply statewide, including one in the Champaign-Urbana area. He said some clients are still negotiating for real estate, which hasn't been an easy find.

He said his C-U-area client, which he declined to identify, signed with MedMen in October 2013 and just secured real estate last week. Others are still hunting.

"This is a real estate business," Bierman said. "The zoning in this industry is more restrictive than any industry I've ever heard of. It makes strip clubs look like grocery stores. When we start working with clients, the first thing we do is real estate."

Koweta said investors who contacted his office were mostly looking for warehouses for cultivation. When factoring in the 2,500-foot restrictions, the eligible areas are limited, especially within municipalities, he said. Most small towns are immediately disqualified, Koweta added.

Jeff Engstrom with the city of Urbana said the planning and zoning department is working on an amendment that would incorporate cultivation centers and dispensaries into the city's zoning. But still, he added, there are very few parts of Urbana that don't have daycares, schools or residential areas within the restricted distance.

"It is pretty limited," said Engstrom, who added that the city planned to release information Friday, detailing where such businesses would be allowed.

In Decatur, the opposite is true, according to the city's economic development officer, Patrick Hoban. His office has had inquiries about cultivation centers and dispensaries, and the city's boundaries expand "pretty far out" into rural areas that would be within the state requirements, he said.

In preparation for what's to come, Decatur amended its zoning ordinance last month so that it included both types of medical cannabis centers that may move in.

Vermilion County officials have taken a similar stance to Champaign's. Haugen said there is only one area within the city of Danville where a cultivation center would work legally — and that's the industrial development area along Lynch Road, on the city's southeast edge near Interstate 74. She said investors have been trying to secure a site there for a possible cultivation center, but her office is not actively pursuing that type of development.

Haugen said she surveyed business and property owners in the Lynch Road area, and almost all of them opposed any kind of medical marijuana facility locating there.

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