As for what’s being done with the 317 unused business permits across the supply chain, it’s not necessarily clear, said Scott Redman, the president of the Illinois Independent Craft Growers Association. 

Redman said many of the permit winners have sold off their licenses to outsiders — some for six figures — but he said he knows the value and price of those permits has been steadily dropping, due in part to perceived market saturation but also thanks to the new competitive threat of intoxicating hemp, which Illinois lawmakers have yet to regulate. 

The hemp-derived THC sector — which has blossomed nationally over the past few years — is eating into the profit margins of all licensed marijuana companies, Redman said, because hemp producers and sellers don’t have to play by the same strict industry rules imposed on marijuana companies, and are able to undercut licensed dispensaries on price point alone because they aren’t forced to pay the same state cannabis taxes. 

“Just as some of these craft growers are getting up and running … we’ve got hemp, and hemp has really taken root here in Illinois in a big, big way,” Redman said. “And the cannabis industry has fought tooth and nail to get it properly regulated or banned, without any real success at this point.”

Redman said the hemp competition is “killing” marijuana companies, and predicted that there will likely be a wave of licensed cannabis businesses forced into bankruptcy or court-appointed receiverships beginning later this year. He said that a lot of his clients in the cannabis space, if they could wind back the clock, would choose a different industry. 

“If they could do it all over again, they wouldn’t,” Redman said. “There are quite a few dispensaries that have closed. I think by and large, dispensaries are just kind of scraping by.”

Not only that, Redman said, but another problem rearing its head is a growing trend of suppliers not getting paid as dispensaries are scrambling to save cash for their operations. 

“I know quite a few dispensaries — big ones, not just little guys — that are plus-90 (days) on their payables,” Redman said. “I know craft growers that have nearly $1 million in overdue receivables, and that’s killing us. It’s killing the manufacturing.”

The bottom line, Redman said, is that much of the legal marijuana sector in Illinois is living on a knife’s edge, and the statistics of unopened licenses is just a signal of broader distress. 

“There are a lot of people out there who saw this as their way to generational wealth — or at least generational income — and some of these folks may end up declaring bankruptcy because all their wealth, whatever they had, 401ks were emptied, and there’s nothing. They haven’t been able to generate anything,” Redman said.

“The big joke is that everyone struggles so hard to get open, and that’s just getting to the starting line. If you’re not sitting on a pile of cash on the day you open your doors, you’re going to be in trouble,” he said.

Mittons, however, remains stubbornly optimistic and said that several Illinois municipalities have begun banning or regulating intoxicating hemp instead of simply waiting for the state to do so. That’s given her hope at the local level for some cannabis companies. 

And, Mittons said, if more than half of cannabis licensees can manage to get open after years of trying — as Bridge City Collective did — it means that more of the remaining 45% can also do so.

“I hear promise. I hear possibility. I hear that there are almost half the people were able to do something. So if 45% can do it, I believe 46% can do it, and then I believe 47% can do it,” Mittons said. “It is possible, because we’re doing it. Sometimes it just takes a little bit longer and a little more work.”