Illinois Adult-Use Weed Sales Hit All-Time High In July With $128M Powered By Lollapalooza Festival, But State Licensing Process Is Still Under Attack

Recreational cannabis sales in Illinois just set another record for the month of July, hitting an all-time high of $128 million.

While the booming industry can be attributed to the easing of pandemic-related restrictions, a major push came from Lollapalooza – the 4-day music festival that has been going on for 30 years, reported the Chicago Tribune. 

The Lollapalooza festival came back to its home in Chicago's historic Grant Park, after last year's cancelation. During those four days, cannabis sales jumped 10% from the previous high of $116.4 million in May. After all, this was the first time in Lollapalooza’s long history that recreational weed was legal. 

Cannabis dispensaries in nearby areas like the West Loop and River North had 50% higher sales. 

“We saw thousands of festivalgoers over the weekend at our River North store, making it our biggest weekend to date,” Jason Erkes, spokesman for Chicago-based Cresco Labs (OTCQX: CRLBF) told the Chicago Tribune. Cresco’s Sunnyside Dispensary in River North was the closest to the Grant Park festivities.

July marijuana sales of $127.8 million are more than $12 million higher than $115.57 million last month according to the report by the Illinois Department of Financial and Professional Regulation. In-state residents spend around $85 million, while out-of-state visitors spent $42 million on cannabis products, 16% higher than in June. 

“Summer tourism and the Lollapalooza attendees were strong contributors to July’s out-of-state sales,” Erkes added.

In the first seven months of the year, Illinois had $753 million in recreational marijuana sales, which is more than it generated in all of 2020. 

In the same period last year, adult-use weed saw sales of $60.96 million, though the strongest month of 2020 was December with figures around $86.86 million, revealing outstanding growth, festival or no festival. 

Though not all is well in the Prairie State. The flourishing of the industry was soon followed by a rain of lawsuits.  

State Licensing Process Still Under Attack 

Illinois' adult-use cannabis program has a licensing problem. The process has been harshly criticized for not providing better access to minority-owned businesses. In fact, it has been under attack since the state issued its first 75 licenses. In response to the criticism, the state decided to create a new cannabis law, according to which, it will award 185 additional adult-use licenses through lotteries. 

Just one day after the new law took effect, however, the Michigan-based cannabis company Sozo Illinois Inc. filed a lawsuit to kill the process. The company asked a federal judge to halt the lotteries, arguing that both the state’s initial and new rules are unfair.

Other companies decided to jump in and legally challenge the licensing process, with the

latest one to join the group being High Haven Dispensary, according to Marijuana Business Daily.  

High Haven Dispensary filed a lawsuit in late July arguing that Illinois state regulators deprived the company of its earned social equity points. The company claims it rightly

earned points based on the background of two of its owners, one of whom lives in a designated disadvantaged area and the other who was arrested in 2009 for drug paraphernalia.  

Together the two owners reached the 52% threshold for social equity ownership, the complaint states.

What’s more, in late July two other applicants sued the state in federal court, arguing they were unjustly removed from a licensing round.

Among large cannabis operators who 'won the lottery' was Planet 13 Holdings Inc. PLTH (OTCQB: PLNHF), which confirmed Thursday it had been granted a Conditional Adult Use Dispensing Organization License in the Chicago-Naperville-Elgin region from the Illinois Department of Financial and Professional Regulation.

"We are thrilled to announce that Planet 13 Illinois was successful in the dispensary license lottery in the Chicago region," Larry Scheffler, co-CEO of Planet 13 said. "Chicago has been one of the main target markets for a Planet 13 SuperStore with its rapidly growing cannabis sales, large population base, and attraction as a tourist destination. We are thrilled to be a partner with Frank Cowan to help support the growth of the industry and to bring the Planet 13 experience to the Chicago region."

This month, the state is supposed to award yet another 130 licensees through two lotteries.

Will they bring more complaints and lawsuits to the pile? We’ll see.  

Photo: Courtesy of Ramille Soares on Unsplash