How to Open a Dispensary in Illinois

Are you thinking about opening a recreational cannabis dispensary in Illinois? Congratulations!

Illinois legalized medical cannabis in 2013 with a pilot program. In 2019, the state expanded its medical program and legalized adult-use cannabis with the Cannabis Regulation and Tax Act. Adult-use sales officially started on January 1, 2020.

The Prairie State had some challenges with its rollout but now has one of the most robust cannabis markets in the U.S. The Illinois Department of Financial and Professional Regulation (IDFPR) oversees the program. You can review all Illinois cannabis laws here.

This guide will outline how to open a dispensary in Illinois, including information on licensing, financing, real estate, security, staffing, compliance, inventory, and tech stack.

Scroll through for a step-by-step process for opening a dispensary in Illinois, or use the links on the left to jump directly to your most pressing questions.

Disclaimer: Always consult your lawyer, accountant, realtor, and other trusted consultants to help you navigate the complexities of opening a cannabis dispensary. Flowhub aims to illustrate and educate but is not to be construed as legal or financial advice.

Plan your Illinois cannabis dispensary

The first step for future dispensary operators in Illinois is to understand the applicant cycle and how cannabis dispensary licenses are issued in the state.

You’ll need to understand the cannabis laws, create your formal business entity, write a business plan, find a location, and prepare to submit your license application.

Form a business entity in the state of Illinois

If you haven’t yet officially formed a business entity, that’s the first task. Work with a lawyer to ensure everything is correct, but at a minimum, you’ll need to decide whether you’re creating an LLC or corporation and file with the state of Illinois.

When choosing a business name, remember that Illinois has rules about naming. Your name (and the names of your products) cannot appeal to children, be misleading about the nature of your business or the store’s location, or use prohibited words. The IDFPR will review your business name as part of the licensing process. If it doesn’t comply, you may be required to change it.

Once your business is established, you can get a tax ID number, open a business bank account at a cannabis-friendly bank or credit union, and decide on your business insurance needs, including general liability insurance, property insurance, workers’ compensation insurance, and product liability insurance.

Note: Every city, county, and state is different. Based on your business type and location, you may have additional steps for taxes, licenses, or fees.

Write a business plan for your Illinois dispensary

Cannabis is a complicated industry, with more compliance and legal considerations than other types of businesses.

A rock-solid business plan can help ensure you are set up for success, especially in a market like Illinois, where dispensary licenses are limited. Your application needs to be competitive, not sparing any details.

Your Illinois dispensary business plan must be submitted to the IDFPR as part of your application.

A good business plan should include:

• The physical location of your dispensary

• Funding plan, or where your startup and ongoing capital will come from

• Sourcing plan for procuring your cannabis products

• Revenue projections

• An estimate or the actual number of employees, or who you’ll hire for what roles, and your dispensary org chart

• Diversity and equity plans

• Marketing plan (contrary to popular belief, cannabis doesn’t just sell itself!)

• Safety and security plan

• Technology plan, including which cannabis point-of-sale and compliance software you’ll use to manage your dispensary

• Any other relevant information you want to document

Illinois requires applicants to submit a business plan, security plan, community impact plan, diversity plan, proof of capital, and proof of zoning compliance.

The business plan you submit with your application must, at a minimum, detail how the dispensing organization will be managed long-term. This includes a description of the dispensing organization's point-of-sale system, purchases and denials of sale, confidentiality, and products and services that your store will offer.

Find a cannabis dispensary location in Illinois

Your dispensary location is a critical piece of the puzzle, but it's not easy. You’ll need something in a visible location with ample parking and enough space to achieve your ideal workflow.

Illinois dispensaries can also not be within 1,000 feet of the property line of a preexisting public or private school.

Most importantly, it must be in a municipality that accepts cannabis businesses. Illinois allows cities, towns, villages, and counties to opt out or impose zoning ordinances that further restrict where cannabis businesses may be located. When applying for a dispensary license, you must submit proof that your proposed location satisfies all regulations.

While you will be required to provide a proposed location when you apply for a dispensary license, you are not required to own, lease, etc., the proposed location. Securing a location will be one of your first steps after receiving a conditional license.

Illinois has divided the available cannabis retail licenses between the 17 Bureau of Labor Statistics (BLS) regions. You’ll need to disclose your area in the application. This is meant to ensure appropriate coverage within the state based on population.

Find a local real estate professional who specializes in cannabis real estate to help in your search. Use public resources, such as city zoning and administration offices.

When looking for a location for your dispensary, focus on spaces that:

• Align with your business plan

• Are large enough to meet your needs

• Are in an appropriate location to serve foot traffic

• Have enough parking

• Have opportunities for expansion/growth

• Are within your budget

Don’t just look at monthly costs, but also factor in how much it’ll take to renovate or retrofit the space for your business needs. Finally, look at local competition (both existing and planned).

Finding the perfect location for your retail dispensary involves many factors. Take the time and invest the necessary resources to secure the best possible space, which will help ensure your success.

Secure funding for your Illinois cannabis dispensary

Now that you have a plan for your new recreational use dispensary, you can create a more specific budget and plan.

A cannabis business can generally expect expenses in these categories:

• Real estate and build-out - consider your initial costs, plus ongoing rent or mortgage. You’ll probably also have renovation expenses to start.

• Licensing/application fees - the cost of getting licensed to run a dispensary in Illinois. You’ll also need to plan for your conditional license and renewal fees—$30,000 upon first licensing and $60,000 renewal for retailers every two years.

• Operational costs - your day-to-day business operating expenses, including, but not limited to, utilities, business or professional fees, marketing, etc.

• Hardware, software, security, and other tech - Most technology is a monthly or annual subscription but may include more sizable startup costs.

• Staffing costs - the cost of hiring employees, including salaries, benefits, taxes, etc.

• Inventory costs - the expense of sourcing and purchasing cannabis products. You’ll need enough stock on your shelves for opening day and beyond.

• Taxes - Cannabis businesses are heavily taxed and can’t participate in regular business write-offs like 280E, so plan for your quarterly tax payments.

As a cannabis entrepreneur, remember you don’t have the same funding options as a traditional entrepreneur. Cannabis businesses don’t qualify for SBA loans or similar because of the federal legality, but loan options are still available.

As a hopeful cannabis dispensary operator in Illinois, you have a few options for cannabis dispensary funding:

• Self-funding - The easiest option is already having access to capital (acquired through legal means).

• Friends and family - Another way to meet dispensary capital requirements is through loans or investments from family and friends if feasible, even if it's only partial funding.

• Partners - Many cannabis businesses are legally set up as partnerships, where each partner contributes something meaningful. Partners can be silent (primarily as the funder) or active; both are great if they serve your needs. Check eligibility requirements to ensure your partnership meets the criteria for applying for a license.

• Loans - Depending on your finances, you may be eligible for a personal loan to cover some (or all) of the upfront costs of opening a dispensary. You may also be able to secure a dispensary business loan, but remember to be honest with your lender about how the funds will be used; not all financial institutions will work with cannabis businesses.

• Private funds - Whether it’s private equity, angel investors, or venture capital, you may have to look to outside investors to fund your cannabis business. This option will decrease your ownership stake in your company. This is a popular option in the cannabis industry and has yielded great results for many entrepreneurs!

• Crowdfunding - This option is less popular, but looking to the general population to support your business venture can be viable for those who can strongly execute this path.

• Brokers - Cannabis-specific brokerage companies can help you find funding for startup expenses, equipment, and more. FundCanna is one option for Illinois dispensary businesses.

• Social equity grants and loans - The State of Illinois offers some loan and grant programs as part of the Social Equity Program. Watch for future funding opportunities on their site!

Apply for an Illinois recreational dispensary license

To open a dispensary in Illinois, you’ll need a license to be able to possess, sell, or deliver cannabis.

The basics of applying for a cannabis license in IL

• To open a dispensary in Illinois, you need a dispensary license.

• Illinois limits the number of available licenses, which makes competition fierce. They have added more licenses, but it’s been limited to a set timeline. Watch the Department website for details as more licenses become available.

• All approved applications start as Conditional licenses. Conditional licenses are provisional approvals and allow licenses to proceed with the next steps in establishing their business, such as securing a location, building out facilities, and obtaining local zoning approvals. Once all requirements have been met, the licensee would apply for their Operational Dispensing License. Dispensaries may only possess or sell cannabis when they have their Operational license. Applicants have 180 days to fulfill their requirements and obtain full licensure.

How to get a dispensary license in Illinois

The Department has a strict, robust, and competitive application process. Here are the steps you can expect:

1. Log into or register a new IDFPR Online Services Portal Account account: https://onlinedfpr.micropact.com/. Note: This portal is where you create or update an application, check application status, update addresses or other information, process renewals, or upload documents.

2. Apply, including the following details:

• The legal name of the proposed dispensing organization.

• Information from each principal officer, including contact information, personal details, a resume, financial background, and whether that person has previously held (or currently holds) an ownership interest in another cannabis business in Illinois or other states.

• A description of the training and education provided to dispensing organization agents.

• A copy of the proposed operating bylaws.

• A copy of the proposed business plan, which includes, at a minimum:
  • A description of the services to be offered
  • A declaration of the process of dispensing cannabis
• A copy of the proposed security plan, including:
  • The process or controls that will be implemented to monitor the dispensary, secure the premises, agents, and currency, and prevent the diversion, theft, or loss of cannabis.
  • The process to ensure that access to the restricted access areas is restricted to registered agents, service professionals, transporting organization agents, Department inspectors, and security personnel.

• A proposed inventory control plan.

• A proposed floor plan, a square footage estimate, and a description of proposed security devices, including, without limitation, cameras, motion detectors, servers, video storage capabilities, and alarm service providers. You’ll also need proof that your proposed location complies with zoning requirements.

• The name, address, social security number, and date of birth of each principal officer and board member of the dispensing organization.

• Evidence of the applicant's status as a Social Equity Applicant, if applicable, and whether a Social Equity Applicant plans to apply for a loan or grant issued by the Department of Commerce and Economic Opportunity.

• A plan for community engagement.

• Procedures to ensure accurate recordkeeping and security measures.

• An estimated volume of cannabis it plans to store at the dispensary.

• A description of the features that will provide accessibility to purchasers as required by the Americans with Disabilities Act.

• A detailed description of air treatment systems that will be installed to reduce odors.

• A reasonable assurance that the issuance of a license will not harm the community in which the applicant wishes to be located.

• The dated signature of each principal officer.

• A description of the enclosed, locked facility where the dispensing organization will store cannabis.

• Signed statements from each dispensing organization agent stating that he or she will not divert cannabis.

• The number of licenses it is applying for in each BLS Region.

• A diversity plan that includes a narrative of at least 2,500 words establishes a goal of diversity in ownership, management, employment, and contracting to ensure that diverse participants and groups are afforded equal opportunity.

• A contract with a private security contractor agency for the dispensary to have adequate security at its facility.

• Other information deemed necessary by the Illinois Cannabis Regulation Oversight Officer.

3. Pay the nonrefundable application fee of $5,000 for each license you apply for.

4. Your application will then be reviewed for completeness.

• Incomplete applications may be disqualified.

• Incomplete applications may get a deficiency notice. Applicants have 10 calendar days to provide the necessary information. Applications that are still incomplete after this opportunity to cure will not be scored and will be disqualified.

5. Applications are then scored. The Department will award up to 250 points to complete applications based on the sufficiency of the applicant's responses to the required information. Applicants will be awarded points based on a determination that the application satisfactorily includes the following elements:

• Suitability of Employee Training Plan (15 points).

• Security and Recordkeeping (65 points).

• Applicant's Business Plan, Financials, Operating and Floor Plan (65 points).

• Knowledge and Experience of the Principal Officers(30 points).

• Status as a Social Equity Applicant (50 points).

• Labor and employment practices (5 points).

• Environmental Plan (5 points).

• Illinois owner (5 points). The applicant is 51% or more owned and controlled by an Illinois resident who can prove residency in each of the past 5 years.

• Status as a veteran (5 points).

• A diversity plan (5 points).

• The Department may also award up to 2 bonus points for a plan to engage with the community.

6. Applicants who are chosen to receive a conditional license will then be notified.

7. Applicants then have 180 days to meet the requirements to convert the Conditional License to a Full License. This includes securing a location, build-out of that location, obtaining local approvals, and passing inspection.

8. Apply for Full Licensure. See this PDF for the application form, which includes details of supplemental information. And here’s additional supporting information to help you along this process:

• Exhibit A – Table of Organization and Principal Officer Applications

• Exhibit B – Notice of Proper Zoning form and Addenda

• Exhibit C – Proposed Floor Plan

• Exhibit D – Surety Bond and Escrow Account

• Exhibit E – Material Changes Attestation

• Exhibit F – Surety Bond / Escrow Account Waiver Form (Optional)

9. Once you obtain the Full License, the dispensary may legally begin operations.

Design your Illinois dispensary

Dispensary design isn’t just about where your dispensary is or what it looks like. It’s how consumers experience and interact with your brand. That’s what makes you memorable!

Here’s a short list of your considerations for in-store design and layout:

• How customers will move throughout the store

• Whether they will pay at a terminal, handheld device, or kiosk

• Whether there are different pathways for in-store vs. online orders

• How your products will be displayed/showcased

• Your brand elements and design

• Use of entry or waiting room space

• Security concerns about doorways

• Where secure inventory is stored (both on the floor, if applicable, and in a vault)

• Where staff will stand and work

• Breakroom or safe staff area

• Bathrooms

Illinois also has several specific requirements that may impact how your dispensary looks and functions:

• You must include materials or signs informing purchasers that possession of cannabis is illegal under federal law.

• Your dispensary must make available to purchasers information about health risks associated with the use or abuse of cannabis provided by the Illinois Department of Public Health and a note that consuming cannabis is prohibited in public places.

• Your dispensary must offer information on the potential side effects of cannabis available to purchasers.

• Dispensaries are not permitted to display unpackaged products through a window case, which means deli-style is not permitted.

• Dispensary licensees may not open a packaged flower, make it a sample, and/or allow customers to look at it. Nothing in the Act or Rules prohibits dummy packaging as long as it does not contain cannabis, which must remain securely stored.

• Dispensaries may not operate drive-through windows.

• Dispensaries shall not allow for the dispensing of cannabis or cannabis-infused products in vending machines.

• A dispensary may operate between 6 a.m. and 10 p.m. local time.

• A dispensing organization must keep all lighting outside and inside the dispensary in good working order and have sufficient wattage for security cameras.

• A dispensing organization must ensure that all air treatment systems installed to reduce odors are in good working order.

• You cannot have fewer than two employees working anytime while the dispensary is open.

• A dispensing organization shall post the following information in a conspicuous location in an area of the dispensary accessible to consumers:

  • The dispensing organization's license.

  • The hours of operation.

  • Signage that shall be posted inside the premises, including:

    • All dispensing organizations must display a placard that states the following: "Cannabis consumption can impair cognition and driving, is for adult use only, may be habit forming, and should not be used by pregnant or breastfeeding women.”

    • Any dispensing organization that sells edible cannabis-infused products must display a placard that states the following: "Edible cannabis-infused products were produced in a kitchen that may also process common food allergens." and "The effects of cannabis products can vary from person to person, and it can take as long as two hours to feel the effects of some cannabis-infused products. Carefully review the portion size information and warnings on the product packaging before consuming."

    • A dispensing organization shall prominently post notices inside the dispensing organization that state activities that are strictly prohibited and punishable by law, including, but not limited to:

      • No minors are permitted on the premises unless the minor is a minor qualifying patient under the Compassionate Use of Medical Cannabis Program Act.

      • Distribution to persons under the age of 21 is prohibited.

      • Transportation of cannabis or cannabis products across state lines is prohibited.

  • All required signage shall be no smaller than 24 inches tall by 36 inches wide, with typed letters no smaller than 2 inches. The signage shall be visible and readable by customers. The signage shall be placed in the area where cannabis and cannabis-infused products are sold and may be translated into additional languages as needed. The Department may require a dispensary to display the required signage in a language other than English.

Create a safe and secure Illinois dispensary

The following security measures shall be implemented to prevent unauthorized entry, protect products and currency, and safeguard employees:

• Establish a locked door or barrier between the facility's entrance and the limited access area.

• Prevent individuals from remaining on the premises if they are not engaging in an activity permitted by this Act.

• Develop a policy that addresses the maximum capacity and purchaser flow in the waiting rooms and limited access areas.

• During hours of operation, store and dispense all cannabis from the restricted access area. During operational hours, cannabis shall be stored in an enclosed locked room or cabinet and accessible only to specifically authorized dispensing organization agents.

• When the dispensary is closed, store all cannabis and currency in a reinforced vault room in the restricted access area to prevent diversion, theft, or loss.

• Keep the reinforced vault room and any other equipment or cannabis storage areas securely locked and protected from unauthorized entry.

• Keep an electronic daily log of dispensing organization agents with access to the reinforced vault room and knowledge of the access code or combination.

• Keep all locks and security equipment in good working order.

• Maintain an operational security and alarm system at all times.

• Prohibit keys, if applicable, from being left in the locks or stored or placed in a location accessible to persons other than specifically authorized personnel.

• Prohibit accessibility of security measures, including combination numbers, passwords, or electronic or biometric security systems, to persons other than authorized dispensing organization agents.

• Ensure the dispensary's interior and exterior premises are sufficiently lit to facilitate surveillance.

• Ensure that trees, bushes, and other foliage outside the dispensary premises do not allow a person or persons to conceal themselves from sight.

• Develop emergency policies and procedures for securing all products and currency following any instance of diversion, theft, or loss of cannabis, and conduct an assessment to determine whether additional safeguards are necessary.

• Develop sufficient additional safeguards in response to any special security concerns or as required by the Department.

• A dispensing organization shall provide additional security as needed and in a manner appropriate for the community where it operates.

• All restricted access areas must be identified by posting a sign at least 12 inches by 12 inches and that states "Do Not Enter—Restricted Access Area—Authorized Personnel Only" in lettering no smaller than one inch in height. All restricted access areas must be secure, with locking devices preventing access from the limited areas.

• A dispensing organization shall have an adequate security plan and security system to prevent and detect diversion, theft, or loss of cannabis, currency, or unauthorized intrusion using commercial grade equipment installed by an Illinois licensed private alarm contractor or private alarm contractor agency that shall, at a minimum, include:

  • A perimeter alarm is on all entry points, and glass break protection is on perimeter windows.

  • Security shatterproof tinted film on exterior windows.

  • A failure notification system that provides an audible, text, or visual notification of any failure in the surveillance system, including, but not limited to, panic buttons, alarms, and a video monitoring system. The failure notification system shall alert designated dispensing organization agents within 5 minutes after the failure, either by telephone or text message.

  • A duress alarm, panic button, alarm, or holdup alarm and after-hours intrusion detection alarm that by design and purpose will directly or indirectly notify, by the most efficient means, the Public Safety Answering Point for the law enforcement agency having primary jurisdiction.

  • Security equipment to deter and prevent unauthorized entrance into the dispensary, including electronic door locks on the limited and restricted access areas that include devices or a series of devices to detect unauthorized intrusion that may include a signal system interconnected with a radio frequency method, cellular, private radio signals, or other mechanical or electronic device.

• All security system equipment and recordings shall be maintained in good working order in a secure location to prevent theft, loss, destruction, or alterations.

• Access to surveillance monitoring recording equipment shall be limited to persons essential to surveillance operations, law enforcement authorities acting within their jurisdiction, security system service personnel, and the Department. A current list of authorized dispensing organization agents and service personnel who have access to the surveillance equipment must be available to the Department upon request.

• All security equipment shall be inspected and tested regularly, not exceeding one month from the previous inspection, to ensure the systems remain functional.

• The security system shall provide protection against theft and diversion facilitated or hidden by tampering with computers or electronic records.

• The dispensary shall ensure that an electronic access panel does not solely control all access doors to prevent locks from being released during a power outage.

• To monitor the dispensary, the dispensing organization shall incorporate continuous electronic video monitoring, including the following:

  • All monitors must be 19 inches or greater.

  • Unobstructed video surveillance of all enclosed dispensary areas, unless prohibited by law, including all points of entry and exit that shall be appropriate for the normal lighting conditions of the area under surveillance. The cameras shall be directed so all areas are captured, including, but not limited to, safes, vaults, sales areas, and areas where cannabis is stored, handled, dispensed, or destroyed.

  • Cameras shall be angled to allow for facial recognition, clear and certain identification of any person entering or exiting the dispensary area and the immediate surrounding area, and the capture of license plates of vehicles in the parking lot.

  • Unobstructed video surveillance of outside areas, the storefront, and the parking lot that shall be appropriate for the normal lighting conditions of the area under surveillance.

  • 24-hour recordings from all video cameras must be available for immediate viewing by the Department upon request. Recordings shall not be destroyed or altered and shall be retained for at least 90 days. Recordings shall be retained as long as necessary if the dispensing organization is aware of the loss or theft of cannabis or a pending criminal, civil, or administrative investigation or legal proceeding for which the recording may contain relevant information.

  • The ability to immediately produce a clear, color still photo from the surveillance video, either live or recorded.

  • All video surveillance recordings must include a date and time stamp. The date and time must be synchronized and set correctly, not significantly obscure the picture.

  • To ensure that locks are not released during a power outage, all-access doors are not solely controlled by an electronic access panel.

  • All video surveillance equipment shall allow for the exporting of still images in an industry-standard image format, including .jpg, .bmp, and .gif. Exported video shall be archived in a proprietary format that ensures authentication of the video and guarantees that no alteration of the recorded image has taken place. Exported video shall also be saved in an industry-standard file format that can be played on a standard computer operating system. All recordings shall be erased or destroyed before disposal.

  • The video surveillance system shall be operational during a power outage with a 4-hour minimum battery backup.

  • A video camera or cameras recording at each point-of-sale location allows for the identification of the dispensing organization agent distributing the cannabis and any purchaser. The camera or cameras shall capture the sale, the individuals, and the computer monitors used for the sale.

  • A failure notification system provides an audible and visual notification of any electronic video monitoring system failure.

  • All electronic video surveillance monitoring must record at least 8 frames per second and be available as recordings to the Department and the Illinois State Police 24 hours a day via a secure web-based portal with reverse functionality.

Note: These requirements are the minimum requirements for operating a cannabis dispensing organization in Illinois. The Illinois Department of Financial and Professional Regulation may establish additional requirements by rule.

Hire and retain dispensary staff

Now that you’re getting closer to opening day, it's time to hire and train your dispensary employees. This team is vital to the success of your dispensary.

Illinois dispensing organizations require at least one designated agent-in-charge for each licensed dispensary. The designated agent-in-charge must hold a dispensing organization agent identification card; maintaining an agent-in-charge is a continuing requirement for the license. This full-time staff person manages your store and the rest of the staff, including, not but not limited to:

• responsibility for opening and closing the dispensary

• delivery acceptance

• oversight of sales and dispensing organization agents

• recordkeeping

• inventory

• dispensing organization agent training

• compliance with this Act and rules

• maintaining all files subject to audit or inspection by the Department at the dispensary

• responsible for promptly notifying the Department of any change of information required to be reported to the Department.

Beyond your agent-in-charge, you’ll need budtenders or cannabis sales associates to serve customers and fulfill orders, someone to greet your shoppers (and secure the entryway), security, and someone to manage inventory and compliance. Based on the size and complexity of your business, you might need more or fewer people on your team.

First, create your dispensary org chart. Based on your business plan, location, store design, and vision, what role will you play in day-to-day operations, and what additional staff do you need? What is the hierarchy? What benefits will you offer? Do you have the funds to pay your staff appropriately?

Be sure to understand the local ordinances around hiring and staffing and follow all requirements, both specific to cannabis brands and general hiring/staffing rules. These could include procuring cannabis employment IDs, processing fingerprints and background checks, age requirements, mandating certification training attendance, payroll taxes, at-will parameters, and more.

All dispensary staff must receive an agent card from the Department in Illinois. Agent cards cost $100 and must be renewed annually.

All owners, managers, employees, and agents involved in the handling or sale of cannabis or cannabis-infused products employed by an adult-use dispensing organization or medical cannabis dispensing organization are also required to complete the Responsible Vendor Program. Learn more.

Understand compliance

Understanding Illinois cannabis laws and how to stay compliant is critical to opening a dispensary. If you don’t maintain compliance, you can be charged fees or forced to shut down.

Dispensaries cannot sell or give away cannabis or cannabis products to anyone under the age of twenty-one. Valid identification and proof of age is required.

As a reminder, here are the possession limits for Illinois:

• Illinois residents over the age of 21 may legally possess:

  • 30 grams of cannabis flower

  • 500 mg of THC in a cannabis-infused product

  • 5 grams of cannabis concentrate

• Non-residents over the age of 21 may legally possess:

  • 15 grams of cannabis flower

  • 250mg of THC in a cannabis-infused product

  • 2.5 grams of cannabis concentrate

These totals are cumulative, meaning a person 21 years of age or older may possess a combination of cannabis flower, cannabis-infused products, and cannabis concentrates up to the limit for each category of product.

The Seed-to-Sale Tracking program chosen by the Department is BioTrack.

Cannabis stores in Illinois are required to track all adult-use cannabis and cannabis products at every stage of their lifecycle using BioTrack. This includes all transportation to the store until the product is sold to a customer, delivered to a testing facility, or disposed of.

Licensees must use BioTrack to the fullest extent possible and integrate it with their POS and inventory management software to ensure compliance. Flowhub integrates with BioTrack and meets Illinois’ product intake and control requirements.

Source and intake cannabis products

Now is when things start getting fun: ordering and receiving your product!

Since vertical integration is allowed in Illinois, you may sell your own products, but you should also consider carrying other products so customers have a range of options.

In Illinois, you are allowed to sell:

• Cannabis flower

• Marijuana seeds and clones

• Edibles

• Concentrates

• Beverages

• Topicals

• Cannabis paraphernalia

• Non-cannabis items

Dispensaries in Illinois cannot sell clones or any other live plant material.

As you look for suppliers in Illinois, there are several things to keep in mind:

• What products do they carry (think about your product mix)

• The taste and quality of the products

• Prices (including the ability to negotiate bulk discounts)

• Fulfillment (how they get products to you and when)

• Testing processes and results

• Reliability (will they run out suddenly, stop communicating, etc.)

• Process for placing orders and overall organization

You also need to ensure your suppliers are licensed facilities, as you cannot order supplies from unlicensed distributors and are in good standing with the state. All products must comply with packaging and label requirements and pass testing at state-approved laboratories for potency, contaminants, and safety.

Note: No single entity’s cannabis products can account for more than 40% of the dispensary's total inventory. Be sure to source from different vendors to satisfy this requirement.

Dispensaries cannot refuse to conduct business with an adult-use cultivation center, craft grower, transporting organization, or infuser that can correctly deliver the product.

Intake and store inventory

Now that your inventory arrives at your store for opening day, you must “intake” those products correctly.

Once your cannabis products arrive, you must “intake” them into your store in a specific way to remain compliant with BioTrack. Before you can bring physical inventory into your store, you must receive and review a manifest and confirm that the product's name, strain name, weight, and identification number on the manifest match the information on the cannabis product label and package.

You must review the manifest and accept it if everything is correct. When the package arrives, you'll physically inspect it to ensure it’s precisely as ordered.

You then accept it in BioTrack, which tells the state track-and-trace system that you legally possess this inventory. Now you can stock your shelves and sell the product. But you’ll also need to develop SOPs for inventory intake and auditing.

Illinois requires dispensary agents-in-charge to perform a DAILY inventory verification count of cannabis inventory against the state traceability system (and not any third-party point-of-sale/inventory tracking system used by the dispensary). Your process and plan must be documented as part of the application materials.

Packaging and label requirements

All marijuana products shall be produced, packaged, and labeled in a manner that protects public health and is not attractive to children.

Here are the basic regulations for marijuana product packaging and labeling:

Packaging

• All harvested cannabis intended for distribution to a cannabis enterprise must be packaged in a sealed, labeled container.

• Any cannabis product shall be sold in a sealed, odor-proof, and child-resistant container consistent with current standards, including the Consumer Product Safety Commission standards referenced by the Poison Prevention Act, unless the sale is between or among a craft grower, infuser, or cultivation center.

• All cannabis-infused products shall be individually wrapped or packaged at the original point of preparation. The packaging of the cannabis-infused product shall conform to the labeling requirements of the Illinois Food, Drug and Cosmetic Act and the other requirements outlined in this Section.

• Packaging must not contain information that:

  • Is false or misleading

  • Promotes excessive consumption.

  • Depicts a person under 21 years of age consuming cannabis.

  • Includes the image of a cannabis leaf.

  • Includes any image designed or likely to appeal to minors, including cartoons, toys, animals, or children, or any other likeness to images, characters, or phrases that are popularly used for advertising to children or any packaging or labeling that bears a reasonable resemblance to any product available for consumption as a commercially available candy, or that promotes consumption of cannabis.

  • Contains any seal, flag, crest, coat of arms, or other insignia likely to mislead the purchaser to believe that the product has been endorsed, made, or used by the State of Illinois or any of its representatives except where authorized by this Act.

• Each cannabis-infused product intended for consumption must be individually packaged, include the total milligram content of THC and CBD, and may not contain more than 100 milligrams of THC per package. A package may contain multiple servings of 10 milligrams of THC, indicated by scoring, wrapping, or other indicators designating individual serving sizes. The Department of Agriculture may change the total amount of THC allowed for each package or the total amount of THC allowed for each serving size by rule.

Labeling

Each cannabis product shall be labeled before sale, and each label shall be securely affixed to the package and shall state in legible English and any languages required by the Department of Agriculture:

• The name and post office box of the registered cultivation center or craft grower where the item was manufactured.

• The common or usual name of the item and the registered name of the cannabis product registered with the Department of Agriculture.

• A unique serial number that will match the product with a cultivation center or craft grower batch and lot number to facilitate any warnings or recalls the Department of Agriculture, cultivation center, or craft grower deems appropriate.

• The date of final testing and packaging, if sampled, and the identification of the independent testing laboratory.

• The date of harvest and a "use by" date.

• The quantity (in ounces or grams) of cannabis contained in the product.

• If sampled, a pass/fail rating based on the laboratory's microbiological, mycotoxins, and pesticide and solvent residue analyses.

• A list of the following, including the minimum and maximum percentage content by weight:

  • delta-9-tetrahydrocannabinol (THC)

  • tetrahydrocannabinolic acid (THCA)

  • cannabidiol (CBD)

  • cannabidiolic acid (CBDA)

  • All other ingredients of the item, including any colors, artificial flavors, and preservatives, are listed in descending order by predominance of weight shown with common or usual names.

Cannabis products produced by concentrating or extracting ingredients from the cannabis plant shall contain the following information, where applicable:

• If solvents were used to create the concentrate or extract, a statement that discloses the type of extraction method, including any solvents or gases used to create the concentrate or extract.

• Any other chemicals or compounds used to produce or were added to the concentrate or extract.

All cannabis products must contain warning statements established for purchasers of a size that is legible and readily visible to a consumer inspecting a package, which may not be covered or obscured in any way. The Department of Public Health shall define and update appropriate health warnings for packages, including specific labeling or warning requirements for specific cannabis products.

Unless modified by rule to strengthen or respond to new evidence and science, the following warnings shall apply to all cannabis products unless modified by rule:

"This product contains cannabis and is intended for use by adults 21 and over. Its use can impair cognition and may be habit-forming. This product should not be used by pregnant or breastfeeding women. It is unlawful to sell or provide this item to any individual, and it may not be transported outside the State of Illinois. It is illegal to operate a motor vehicle while under the influence of cannabis. Possession or use of this product may carry significant legal penalties in some jurisdictions and under federal law."

In addition, warnings for each of the following product types must be present on labels when offered for sale to a purchaser:

• Cannabis that may be smoked must contain a statement that "Smoking is hazardous to your health."

• Cannabis-infused products (other than those intended for topical application) must contain a statement: "CAUTION: This product contains cannabis, and intoxication following use may be delayed two or more hours. This product was produced in a facility that cultivates cannabis, and that may also process common food allergens."

• Cannabis-infused products intended for topical application must contain the statement: "DO NOT EAT" in bold capital letters.

Note: No individual other than the purchaser may alter or destroy any labeling affixed to the primary packaging of cannabis or cannabis-infused products.

Market your dispensary

Ok, your store is ready, the team is trained, and you have inventory. Now, you need to know that your dispensary is opening soon.

Cannabis businesses notoriously have more challenges with marketing than traditional brands because of stigma, regulations, and the federal illegality of cannabis. However, you can still use many marketing tactics to promote your new dispensary.

1. Develop a beautiful, functional dispensary website. Enabling online ordering through your website is a great way to appeal to digital-friendly shoppers.

2. Fine-tune your social media presence (though be careful with your posts and remember the terms of service as you create your strategy!)

3. Consider events to attract new customers to your store.

If opening a dispensary in Illinois, you must understand the advertising regulations.

No cannabis business establishment nor any other person or entity shall engage in advertising that contains any statement or illustration that:

• Is false or misleading.

• Promotes overconsumption of cannabis or cannabis products.

• Depicts the actual consumption of cannabis or cannabis products.

• Depicts a person under 21 years of age consuming cannabis.

• Makes any health, medicinal, or therapeutic claims about cannabis or cannabis-infused products.

• Includes the image of a cannabis leaf or bud.

• Includes any image designed or likely to appeal to minors, including cartoons, toys, animals, or children, or any other likeness to images, characters, or phrases that are designed in any manner to be appealing to or encourage consumption by persons under 21 years of age.

No cannabis business establishment nor any other person or entity shall place or maintain, or cause to be placed or maintained, an advertisement of cannabis or a cannabis-infused product in any form or through any medium:

• Within 1,000 feet of the perimeter of school grounds, a playground, a recreation center or facility, a child care center, a public park or public library, or a game arcade to which admission is not restricted to persons 21 years or older.

• On or in a public transit vehicle or public transit shelter.

• On or in publicly owned or publicly operated property.

No cannabis business establishment nor any other person or entity may encourage the sale of cannabis or cannabis products by giving away cannabis or cannabis products, by conducting games or competitions related to the consumption of cannabis or cannabis products, or by providing promotional materials or activities of a manner or type that would be appealing to children.

Dispensaries also shall not sell cannabis, cannabis concentrate, or cannabis-infused products in combination or bundled with each other or any other items for one price, and each item of cannabis, concentrate, or cannabis-infused product must be separately identified by quantity and price on the receipt.

Choose your network, hardware, and cannabis tech stack

Your technology stack is crucial to success as a cannabis business owner. Some are must-haves for compliance, like your security system and cannabis point-of-sale, while others are important to differentiate your store and create a great customer experience.

Here are some of the technology solutions you may want for your dispensary:

• Network

• Hardware

  • Printers (both letter-sized and receipts)

  • TVs

  • Cash drawers

  • Computers (for staff work, like inventory)

  • Tablets or terminals

  • Barcode scanners

• Software

  • POS

  • Ecommerce

  • Compliant payment provider for non-cash transactions

  • Digital menus

  • Kiosks

  • Loyalty programs

  • CRM

  • HR/Payroll tools

  • Accounting software

  • Analytics software

  • Social media management and monitoring

  • Website

  • Mobile app

You don’t need to invest in every possible cannabis-specific technology solution. But be sure to invest in tools to help you achieve your sales goals, stay compliant, and satisfy modern shoppers.

Note: Dispensaries in Illinois shall not be operated if their video surveillance equipment, point-of-sale software, or state cannabis electronic verification system is inoperative.

How to choose a cannabis retail POS system

Your cannabis point-of-sale system is the single most important tool in your stack. It is the central driver for compliance, inventory management, managing transactions, and customer satisfaction.

Every POS option is a bit different—and not all work in every state—so do your homework before signing that dotted line.

Here are 10 tips for choosing marijuana retail software.

1. State compliance tracking: Software is so important because it facilitates state reporting (in Illinois’s case, BioTrack). Look for an API integration that manages this seamlessly to save you time and provide peace of mind.

2. Hardware compatibility: As mentioned above, your chosen software and hardware must be compatible. Pick a cloud-based software that doesn’t restrict hardware options so that you don’t incur additional hardware costs or have to change hardware if you change point-of-sale systems later.

3. Customer support: Your ability to get up and running quickly is important, but getting your questions answered long-term is just as vital. As you look at different software, ask about the level of support you’ll receive.

4. Ease of use: Software that fuels your medical cannabis or adult-use retail stores must be easy and intuitive, and staff must learn it quickly. Pay attention to how the system functions and whether you think it’ll make your staff more productive.

5. Inventory management: You have requirements for managing inventory, as mentioned earlier. Make sure the POS you choose has all the capabilities you need (and then some).

6. Built-in compliance: Software isn’t just important for compliance related to state reporting (like BioTrack or Metrc); it should also help you stay compliant with state marijuana laws, such as purchase limits. Ensure the software you choose has built-in safeguards that address your market-specific needs.

7. Discrepancy reporting: Your Metrc, physical, and point-of-sale inventory must always be aligned. If there is a discrepancy, you need to know about it and how to resolve it. Your software should include built-in tools to help you identify and resolve inventory discrepancies.

8. Activity tracking: In an industry with more loss and theft than others, it’s important to see which employees took what actions and when, such as making a sale, opening a drawer, moving inventory, etc.

9. Open API and integrations: Is the software compatible with other vendors? Integrations are important to consider, especially if you’re interested in online menus, delivery, loyalty programs, or other technology offered by partners.

10. Specialization: Consider the best software for each part of your business. If you have marijuana cultivation facilities, manufacturing facilities, and cannabis retail operations, it’ll be tempting to pick one software for it all. You can’t deny that better visibility is tempting, but all software is best at one thing. If you choose one for all, you’ll be putting the other two parts of your business at a disadvantage. Instead, look for vendors who integrate seamlessly.

Need help opening your dispensary?

Opening a dispensary in Illinois is an accomplishment. The market continues to grow, and now is a great time to get involved.

Considering the final point of sale is one of the most important elements of opening a dispensary in Illinois. In such a competitive market, new dispensaries need best-in-class technology to stand out among cannabis retailers who have already built a loyal customer base.

Since cannabis businesses don’t have the same options as traditional retailers, companies like Flowhub fill the gap.

Book a call with our team to explore a POS demo and learn how using Flowhub at the point of sale can save you time and money!