Independent Disparity Study Finds Illinois Has Most Diverse Cannabis Business Ownership in The Nation

Independent Disparity Study Finds Illinois Has Most Diverse Cannabis Business Ownership in The Nation

Cannabis licenses awarded to minority- or women-owned businesses account for 60% of businesses in Illinois

CHICAGO – The Cannabis Regulation Oversight Office (CROO) published the Disparity and Availability Study for adult use cannabis licenses in Illinois finding that Illinois currently has the most diverse cannabis industry in the nation. The study, as required by the Cannabis Regulation and Tax Act (CRTA), examined 559 adult use cannabis licenses issued by the State to more than 400 businesses during the study period, which spanned from the start of adult use cannabis sales, January 1, 2020, through January 31, 2023.

The disparity study found the CRTA successfully resulted in license ownership diversity for each license type with new licenses over the study period. Over the study period, 59% of dispensary licenses were issued to minority- or women-owned businesses (compared to 21% for the medical cannabis market). For all licenses issued by the State, that number jumps to 60%. Additionally, minority- or women-owned businesses held 63% of craft grower, 61% of infuser, and 74% of transporter licenses. Additionally, the study found nearly 84% of the State’s Direct Forgivable Loans went to minority- or women-owned businesses. According to this independent review, these demographics make Illinois the most diverse cannabis industry in the nation. Since 2023, IDFPR has conducted another Social Equity Criteria Lottery and issued 55 more conditional licenses, all going to social equity designated businesses.

“We’re incredibly proud of our emerging cannabis industry, and we’re fully committed to making this an industry where people most affected by the War on Drugs can start their own business and thrive,” said Governor JB Pritzker. “That's why Illinois commissioned the largest, independently reviewed cannabis-focused disparity study in the nation, and the results show that our administration’s policies focused on social equity have paid off. Illinois is first in the nation when it comes to diversity in the cannabis market, and this report provides concrete steps we can take to continue supporting new businesses in a highly competitive marketplace.”

“Illinois set out to create the most equitable cannabis industry in the nation, and this study confirms we’re on the right track,” said Lt. Governor Juliana Stratton. “Numbers alone don’t tell the whole story, though — each license represents an opportunity for communities long left behind. We’re not just changing an industry; we’re changing lives."

“The social equity provisions in the Cannabis Regulation and Tax Act worked at creating a diverse set of new businesses in Illinois,” said Cannabis Regulation Oversight Officer Erin Johnson. “This report is a critical first step in understanding diversity in our cannabis industry. Every week, new businesses open and the industry continues to change, evolve, and grow. We thank all those that contributed to this report and look forward to discussing the recommendations in the coming weeks and months.”

The CROO commissioned the Nerevu Group, a 100% minority- and women-owned group of contractors and subcontractors, to evaluate whether discrimination exists in the State’s cannabis industry and, if so, evaluate the impact of such discrimination and make recommendations for reducing or eliminating any identified barriers to entry in the cannabis market.

“Along with our partners, Nerevu has been honored to support the State in in examining Illinois' cannabis industry,” said Nerevu Group Founder and President Reuben Cummings. “While there is more work to be done in the future, this study is essential to explain all available data when it comes to equitable cannabis policy. We are so appreciative of the open and honest information shared with my team from the regulators, industry participants, and applicants.”

The Nerevu Group gathered extensive quantitative data — from applications, federal data sources, and national datasets — and spoke to over 200 stakeholders. They analyzed all five adult use cannabis license types (dispensing organizations, craft growers, infusing organizations, transporting organizations, and cultivation centers) across all licensing rounds within the study period. New licenses were issued for all license types except cultivation centers during this time.

Nerevu also conducted a brief review of 2023 data and noted significant growth in operational licenses and continued increased sales since the end of the study period. It should be noted that the Illinois Department of Financial and Professional Regulation (IDFPR) conducted Social Equity Criteria Lottery for 55 additional adult use dispensing organization licenses after the disparity study, so those conditional licensees are not included in the final study.

Additionally, Nerevu examined the nearly $22 million in forgivable loans made available to businesses by the Department of Commerce and Economic Opportunity (DCEO) and, at CROO’s request, additional sales data for 2023 when more new businesses were open.

In the disparity study, Nerevu recommends further steps strengthen the CRTA’s race- and gender-neutral social equity provisions by (1) increasing access to capital, (2) simplifying cannabis management and administration, (3) unifying State agency policies and practices, and (4) expanding economic opportunities for new businesses. Nerevu also recommended commissioning another disparity study in 3-5 more years to assess progress for the new businesses.

None of the recommendations were race- or gender-based and will instead target all cannabis businesses, including the new diverse licenses entering the adult use market. Additional information on the status of the disparity study will be available on the CROO website.

For more information on the disparity study, visit https://cannabis.illinois.gov/legal-and-enforcement/disparity-study.html.

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