Can Small Cannabis Companies In Illinois Break Into The Medical Marijuana Market?

Medical marijuana patients in Illinois can now purchase cannabis grown by small businesses as part of their allotment, according to Erin Johnson, the state’s Cannabis Regulation Oversight Officer.

Illinois boasts the “most diverse cannabis business ownership” in the country, at least according to claims made when the state celebrated the opening of its 100th social equity dispensary.

Despite this progress, however, there is still unequal access to the market, analysts noted in a recent Capitol News article. While Johnson confirmed that dispensaries can now sell craft-grown products from social equity licensees to medical patients, new, small-scale growers continue to face challenges in gaining broader access to medical customers. These smaller businesses are part of Illinois’ efforts to diversify the cannabis industry since the state legalized recreational use in 2020.

Unequal Access In Illinois’ Medical Cannabis Market

Illinois’ medical marijuana (MMJ) program, in place since 2014, has not expanded its dispensary network since 2018. This has left smaller businesses at a disadvantage. Most of the state’s MMJ sales happen through dual-purpose dispensaries, but they represent only 20% of all dispensaries. On the other hand, the adult-use market has been expanding with the total market hitting a record $1 billion by July of this year.

Steve Olson, who manages supply at a pair of dispensaries, says MMJ patients deserve access to all dispensaries. “You would think that this would be something they're (the government) trying to help out these social equity companies with, but they're putting handcuffs on them in so many different spots, (…) one of them being this medical thing.”

While social equity businesses can now serve medical patients, their reach remains limited. Larger companies, mostly multistate operators, dominate the market.

Read Also: Illinois Lawmakers Fail To Update Cannabis Laws, Non-Profit Argues ‘Corporate Greed’ Played A Role

Illinois’ Potential Legislative Solutions

In medical marijuana markets, the ratio of dispensaries to patients is a crucial parameter, often used to gauge accessibility and equity. When there are too few dispensaries, MMJ patients face longer wait times, reduced product availability and higher prices. This imbalance can be especially challenging in states like Illinois, where limited licenses restrict the number of medical-only dispensaries, further narrowing access.

Illinois’s situation underscores the need to open up more dispensaries to cover growing demand.

To address these challenges, advocates are pushing for HB 2911, which would allow all dispensaries to serve MMJ patients. Johnson expressed hope that this bill could pass during the fall session. But the House seems to be dragging its feet regarding cannabis reform; lawmakers ended the regular spring legislative session without deciding on key cannabis and hemp bills.

"It's something we desperately want," Johnson said. “We want to ensure that medical patients easily access what they need.”

Learn More About Cannabis Regulation And Markets

The upcoming Benzinga Cannabis Capital Conference in Chicago offers an ideal space for industry stakeholders to learn more about the evolving cannabis market and make significant business connections. The event's Spring edition in Florida attracted over 2,000 participants, including over 200 investors, showcasing its impact on industry networking and deal-making.

As Illinois continues to exhibit growth in its cannabis market, the Benzinga Cannabis Capital Conference is poised to facilitate crucial discussions and connections. Don’t miss out!

• Read Next: Smell Of Cannabis Is Not Enough For Warrantless Car Searches, Illinois Supreme Court Rules

Cover: AI-generated image