By John Schroyer
Medical marijuana cultivation is now underway in Illinois, setting the stage for the start of cannabis sales later this year.
Ataraxia – which won a cultivation license for a district in southeastern Illinois – received final authorization from the state’s agriculture department last Friday and started planting Monday afternoon, becoming one of the first companies to begin growing MMJ.
The development is a sign that the state’s medical cannabis program is finally moving forward after numerous delays and uncertainty tied the licensing process, giving frustrated dispensary owners hope that they can start serving patients – and generating revenue – soon.
“It’s a very important milestone in the program,” said Ross Morreale, the chief compliance officer for Ataraxia. “The next milestone will be product being available.”
A second cultivator was also issued a final authorization notice last week, but the state declined to identify the company.
Morreale said he believes that business is a day or so behind his. The soonest he expects to be able to provide oil-based product to dispensaries is October, with flower coming shortly thereafter.
Once dispensaries start opening, the industry could generate an estimated $15 million to $30 million in revenues during in the first 12 months of sales, according to the Marijuana Business Factbook. The total could rocket much higher if the state approves more medical conditions for the MMJ program, which is a good possibility.
The Chicago Tribune reported over the weekend that PharmaCann, a company with two cultivation licenses and four dispensary licenses, is on the brink of planting this week but needs to undergo at least one more inspection by state regulators on Tuesday.
“This is the first time when we can say, ‘Look, there are plans that are in motion,’” said Michael Mayes, CEO of the Chicago-based consultancy Quantum 9. “There have been a lot of roadblocks, but any positivity is always good.”
The state is also in the process of issuing ID cards to cultivation site employees, another hurdle that growers have to overcome before they can begin sowing MMJ. A spokeswoman for the Department of Agriculture said employee cards have either been issued to or are ready to be picked up by nine of the 18 cultivators licensed so far.
“There’s a whole bunch of (cultivators) that seem like they’re ready to go,” said Brad Zerman, the owner of a dispensary that’s being built out in Oak Park, a suburb of Chicago.
Zerman said his main surprise is that he hasn’t heard yet from more cultivators looking to cement business relationships, since there will only be up to 60 dispensaries statewide and 21 grow sites at most.
“If I was a grower, the day after I was approved, I would have called every single dispensary that I could find a phone number for,” Zerman said.
Still, Mayes said there will almost certainly be enough medical cannabis to satisfy demand straight out of the gate, simply because the registered patient count is still so low. As of July 1, there were only about 2,600 MMJ patients who had finished signing up with the state, far below the tens of thousands that were expected to sign up.
Although that has some in Illinois worried, many in the industry are resting their hopes on the expectation that many more will sign up once MMJ is actually available for purchase.
Morreale, who is also the chair of the Medical Cannabis Alliance of Illinois, said he’s been working on outreach and education for physicians who are still reluctant to recommend MMJ for patients. That, along with a requirement that patients be fingerprinted by the state, are still two serious obstacles for the nascent industry, Morreale said.
“There’s still a lot of trepidation in the medical community, without question. It’s gotten better, but it’s going to be a long road,” Morreale said.
Morreale added that he believes many more physicians will come around over the next six months or so. He’s also hopeful that a petition campaign to support easing MMJ regulations will persuade policymakers to amend the program and make it easier for patients to obtain access.
But for now, the fact that Ataraxia actually has planted seeds is an encouraging sign for the industry.
“I think all these businesses are going to be up and running by the end of the year,” Zerman said.
John Schroyer can be reached at [email protected]