After nearly three years of legal marijuana in Illinois, McHenry County is home to only one dispensary

While marijuana could be a growing business soon in McHenry County as more licenses are granted, state regulations are causing issues for many.

Pending lawsuits, court-ordered stays and related delays in new license approval have created a backlog both across the state and in the county.

“It is difficult to get new programs up and running, and up and running well,” said McHenry County Board member Pamela Althoff, R-McHenry, who is also executive director of the Cannabis Business Association of Illinois.

SOI LLC was one business that sued the state after its application’s “perfect score” was denied a license, said Joseph Ori, one of the firm’s owners and general counsel.

They did not have a veteran on their application, which the state added to the preferred list requirements late in the process, Ori said. Despite this, the group anticipates receiving a craft grow license soon.

Lack of a license may not be the only reason dispensaries aren’t coming to fruition in McHenry County.

The city of McHenry has approved two marijuana businesses since 2020. Neither applicant followed up with construction permits or received a state license, Director of Community Development Ross Polerecky said.

He said he is unsure why those businesses never moved forward, but wonders if population density is part of the reason.

“They all want to be in the city or populated areas first,” he said. “And McHenry, or McHenry County, may not fit that demographic.”

McHenry followed Lake in the Hills’ lead to make the process easier, Polerecky said.

Specifically, McHenry made marijuana businesses a permitted use in its commercial highway district, so no special use permit would be needed, he said.

“They can open like any other retail business. If they can find a location, they can go in without going through zoning. It is a fast-tracked process,” Polerecky said.

Crystal Lake has also seen one of its two requests not materialize, Community Development Director Katie Cowlin said.

Along with the state’s licensing delays, challenges to that system are also slowing things down.

Lawsuits objecting to how the state handed out licenses for marijuana craft grow, infusion and dispensaries brought temporary restraining orders from state judges.

Those restraining orders prevented Illinois from approving any additional licenses while they were decided legally.

Even for someone working with the marijuana businesses within the industry, keeping track of where the lawsuits and licensing processes stand can be a challenge, Althoff said.

Part of the problem, she said, is that there is not a central repository for all of the information license applicants need.

A total of 13 state agencies have a part in regulating the recreational marijuana business in Illinois, she said. She believes this makes it hard to determine where things are in the process, as too many parties have a piece of the responsibility.

“There is not a stand-alone commission, like you do in Illinois for liquor and gaming,” said Althoff.

Ori, from the Woodstock infusion location currently in design review, said they saw the same problem. At one point, a group of marijuana license hopefuls he meets with wanted to ask for changes in a portion of the application process.

They couldn’t determine which regulatory agency they should forward the letter to, Ori said.

Still, some progress is being made.

In late May, a Cook County judge lifted his stay that had stopped the state from approving any new cannabis dispensary licenses.

The Illinois Department of Financial and Professional Regulation, which approves dispensaries via a lottery system, began approving new dispensary licenses as of mid-June.

Another judge had put a stay on craft grower applications, after the state’s lottery for these licenses was, according to the suit, improperly scored. That stay was lifted in March.

With the judicial process clearing up, 185 dispensary licenses are now permitted to go forward, Althoff said. Another 48 craft grow licenses were approved after the stay was lifted, she said.

It may have been too late for some proposed locations.

“Some of them also need to obtain approval because the ownership of that license has changed and there are requirements for that,” she said.

The lone dispensary in McHenry County, RISE, welcomes the new competition once it opens, Green Thumb Industries Regional Director Taurin Lyons said. That location opened in March 2021.

“There’s enough people where there’s definitely going to be enough going around for everyone,” he said. “We welcome anybody who’s able to help people. Cannabis is a freedom; so the more the merrier.”

RISE has seen increasing success over the years, which is helping add to the village’s coffers, Lake in the Hills Finance Director Peter Stefan said.

The village gets both sales tax and a 2% marijuana tax from sales at the dispensary, Stefan said.

“As with any new business it took three or four months for them to get to their normal sales level, and since then it’s been stable, inching up slightly,” Stefan said.

Still, going through the state for licensing doesn’t seem as easy as it could be, he said. But now that licenses are starting to go out, Lyons believes more dispensaries and marijuana-based businesses will start opening.

Ori said the delays have given the bigger companies that opened quickly a leg up.

“For the last three-plus years, the original operators have had a feasting day,” he said. “They have only gotten stronger, more positioned to make it more difficult for us smaller guys to get into the market.”

Even with many businesses not gaining traction, a couple could be opening in the near future. Ori’s all-in-one business could be opening in Woodstock soon, while one marijuana-based business in Crystal Lake has started site work.

Spring Grove resident Monika Jones, who was at Rise in Lake in the Hills, said she’s looking forward to it. Since she has some medical issues, legal marijuana helps her a lot.

“I used to live in California, so I assumed it would be like that one day,” she said. “Getting it delivered to the house sounds nice.”