Politics & Government

East St. Louis among areas that could get preferential treatment for marijuana licenses

Those who want to get into the marijuana dispensing business may get preferential consideration from the state if they’re willing to open up shop in some of the most economically distressed areas in the metro-east.

Applicants could get extra credit if they agree to work with people from certain designated areas, released by the Illinois Department of Commerce and Economic Opportunity, that have been deemed disproportionately impacted by the war on drugs.

Those areas include East St. Louis and surrounding communities.

“Too many communities in Illinois have been torn apart due to failed drug policies. By providing resources to justice-impacted individuals and members of their communities, we can ensure that the legalization of cannabis benefits all Illinoisans, regardless of income or background,” said Erin Guthrie, acting director of the commerce and economic opportunity department.

To be designated as a disproportionately impacted area, the area must have high rates of arrest, conviction and incarceration related to marijuana, among other qualifications including poverty and high unemployment, the department said.

Among the areas that qualify under the social equity program are East St. Louis, Alorton, Centreville, Madison, Washington Park, Venice, part of Granite City, and Alton.

Statewide, 2 million people live in the designated disproportionately impacted areas, according to DCEO.

When people look to open a marijuana business, such as a dispensary or small growing operation, they will need to apply for a license from the state. Under the adult recreational use marijuana legalization law, there will be weighted preference given to areas that have been disproportionately affected by the war on drugs.

Small amounts of recreational marijuana will become legal on Jan. 1 in Illinois.

Applicants for marijuana-related businesses will be awarded points by the Illinois Department of Financial and Professional Regulation. Under the social equity aspect of the law, extra points would be given to applicants whose business would be majority owned by people have lived in a disproportionately impacted by the war in drugs at least five of the last 10 years or have a previous marijuana conviction that could be expunged under the law. Extra points can be given if the business has more than 10 employees from disproportionately areas affected by the war on drugs.

There currently are 55 medical marijuana dispensaries in the state. They would have the first crack at getting a second license to open another dispensary. Then, there will be 75 more dispensary licenses awarded before May 2020. Of those 75 dispensaries, up to four can be in the St. Louis area.

After Jan. 1, 2021, up to an additional 110 more dispensary licenses will be issued for a total of nearly 300 licenses.

After Jan. 1, 2022, there could be up to 500 dispensary licenses in total statewide, according to the legislation that was signed by Gov. J.B. Pritzker.

People who qualify as social equity applicants could receive technical assistance from the state when putting together a business plan, pay reduced application and license fees, and have the opportunity to apply for a low-interest loan from the state with reduced fees.

Applying for a license was set by the legislation at $5,000.

Towns such as Granite City, Alton and East St. Louis have bridge access to Missouri and may be attractive to businesses that want to try to attract residents from the Show Me State, where recreational marijuana is not legal.

“I’m excited about being able to receive consideration for the licenses. Even to be put in that label, to be put in that category, is kind of melancholy if you will,” East St. Louis Mayor Robert Eastern III said. “It’s kind of bittersweet. It’s sweet because you may get this windfall ... but it’s bitter because we’re in dire straits and need such things to help us come out of the situation we’re in.”

Eastern said having the designation of being an impacted community could help attract other potential businesses.

“We already have a cultivation center … in the city,” Eastern said. “We hope this will make the city attractive to all businesses, not just the marijuana industry or those who are taking part in that.”

east st. louis marijuana areas.jpg
The Illinois Department of Commerce and Economic Opportunity released areas deemed as disproportionately impacted areas. To be designated as a disproportionately impacted area, a Census tract must have high rates of arrest, conviction and incarceration related to marijuana, among other qualifications including poverty and unemployment, the DCEO said. Parts of East St. Louis, Venice, Madison and Granite City are included. Provided photo

Eastern said the city is still researching where potential cannabis businesses would be allowed to locate, but did say he would not want them near churches or schools.

“Ultimately we want to make sure it’s a safe environment and obviously not around schools and churches of that nature,” Eastern said.

The the city’s proximity to Missouri and available land also may help make it attractive to potential marijuana businesses.

“It will be no different than … (when) we were one of the first cities in the area to get the Casino Queen. Of course we looked to get customers from across the (river) and the region, to patronize those businesses, and we welcome that,” Eastern said. “I think our proximity to Missouri, we’ll probably get our percentages of those people as well.”

Alton looking forward to the opportunity

alton marijuana areas.jpg
Parts of Alton also were deemed disproportionately impacted areas, according to DCEO maps. Provided photo

Alton Mayor Brant Walker said he understands why his city was an area designated by the state as impacted by the war on drugs.

“I think a lot of it is we have a lot of lower-income housing, for whatever reason, and we have a disproportionate amount of rental companies, which has a tendency to bring a lot of folks who are transient in nature,” Walker said. “They don’t own, so they have a tendency to come and go and our rents are fairly low. Those two factors may equal why we fall into that category.”

He said the average income in Alton ranges between $32,000 and $36,000 a year for a family of four.

If a recreational marijuana dispensary decided to locate in Alton, the city would levy a 3% tax on sales of recreational weed.

He said the city’s Plan Commission is working on what zoning districts marijuana businesses would be allowed to locate in.

But being an area right on the border that possibly attracts out-of-state residents isn’t new for Alton. “The town’s riverfront, the entertainment our dining options, and of course our shopping areas also attracts people.

“We already have a tremendous amount of revenue coming from the Missouri side to enjoy our retail assets,” Walker said.

Banking with marijuana businesses

As the state goes through the process of issuing marijuana business licenses, those businesses will have to find a way to handle their finances.

Because marijuana is a Schedule 1 drug on the federal level and illegal, according to the federal government, banks cannot provide services for marijuana businesses. It makes the transactions at dispensaries primarily cash-based.

However, the U.S. House of Representatives recently passed the SAFE Banking Act, which would prohibit regulators from punishing banks that serve cannabis companies and clients. The legislation still needs to get through the Senate.

Among those who voted yes was U.S. Rep. Mike Bost, R-Murphysboro.

“The banks came to us and said, ‘Look, you need to understand you have legalized an industry, but you haven’t legalized the banking industry to be able to bank with them, because we become in violation of federal law, we will not bank with them,” Bost said.” So this becomes a cash sale. Do you want the dangers involved of being a cash sale, or do you want to make us criminals when we didn’t do anything wrong?’ And the answer was no, I didn’t want to do that.”

Bost added this also was an issue as hemp was legalized to be grown by the federal government as part of the Farm Bill.

U.S. Sen. Dick Durbin, D-Illinois, said he hopes the Senate takes up the legislation, which he supports.

“We’ve got to grow up here. Thirty-one states have legalized the sale of marijuana in one form or another. Illinois has led the way by our legislature with a lengthy bill regulating these sales. It’s coming Jan. 1,” Durbin said. “I have some misgivings, concerns about what’s going to happen but I’ll tell you it does us no good for the federal government to brand this as a dangerous narcotic and for 31 states to say you can sell it over the counter. We’ve got to get our act together here, and having the banking system for these marijuana sales and such I think brings more stability to the actual commercial transaction.”

Bost said his support of the banking bill doesn’t mean he supports legalization of cannabis.

“I think it comes with all kinds of problems. I think Colorado proves that,” Bost said. “That being said, it’s well within the rights of the state legislature to make that vote. The question is, it doesn’t override federal law, that’s where we get into the problem that’s the argument we have with Colorado. That’s the problem we’ve had with every state that has legalized it, and it’s a constant.

Bost said he believes legalized marijuana can lead to more drug problems, not fewer.

“Me, Mike Bost personally, believes we’re opening a Pandora’s Box when we go down that path, and I do believe it’s a gateway drug,” he said.

BEHIND OUR REPORTING

Why did we report this story?

Recreational marijuana use for people 21 years old and older is set to become legal in Illinois on Jan. 1, 2020. We want to inform readers how the state and local governments prepare for legal weed.

We will continue to cover issues related to the legalization of recreational marijuana as communities prepare for it. What questions do you have about this topic? Please contact Joseph Bustos at jbustos@bnd.com

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Joseph Bustos is the state affairs and politics reporter for the Belleville News-Democrat, where he strives to hold elected officials accountable and provide context to decisions they make. He has won multiple awards from the Illinois Press Association for coverage of sales tax referenda.
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