Several Illinois companies that were awarded licenses to operate grow sites are still seeking millions of dollars in financing to stay afloat and build their facilities, sparking concerns that the state didn’t vet the financial strength of applicants closely enough.
Some companies need more money than expected due to delays in the licensing process – which has lengthened the time until businesses can launch and start generating revenue – and the high cost of applications and licenses, according to the Chicago Sun-Times.
Others are trying to bolster their reserves in case demand doesn’t turn out as expected, given that only about 1,600 patients have been approved for MMJ cards so far.
A lawsuit has been filed claiming that Cresco Labs, a license winner, lacks enough financing to get a state permit to grow MMJ. The Sun-Times said a subcontractor for Cresco is seeking $29 million in addition to the $7 million it already has to develop the company’s farming operations.
In Grown Farms LLC 2, another license winner, is seeking $13.5 million, the newspaper reported, citing an internal document.
Green Thumb Industries gave up the license it was awarded, saying it didn’t want to pay a $200,000 licensing fee due to the low initial patient counts. The company also would’ve needed $2 million in an escrow account to accept the permit.
Its license was awarded to PharmaCann, which has four dispensary licenses and, now, two grow licenses, making it the biggest holder of marijuana business permits in the state.