Recreational marijuana in Illinois got out of the gate in January with what officials called a "successful launch" of $39.2 million in sales, but it also came with an asterisk.
The haze hanging over those sales figures is the shortage of dried cannabis flower -- the leaf that is smoked -- and the uncertainties of how long it will persist and how it might dampen sales.
Pam Althoff, executive director of the Cannabis Business Association of Illinois, said other kinds of cannabis products, such as edibles and concentrates, are plentiful. But the flower is in demand, and the shortage is causing many dispensaries to cut hours and impose limits on purchases.
The shortfall was expected because of the state's quick ramp-up to legalization, expansion of the medical marijuana program and the detailed regulations manufacturers and retailers must follow to legally grow, process, package, ship, stock and sell cannabis products. Steps are being taken to boost supplies, but it will take time.
Marijuana is grown at 21 cultivation centers throughout Illinois, all of which were given permission to expand to a maximum 210,000 square feet for plants. Althoff said she expects supply to meet demand -- which always surges initially -- in about six or seven months because it takes, on average, 16 weeks for cannabis to grow, dry and be packaged and delivered to a dispensary.
Others were more hesitant to make forecasts. "We can't predict when supply will be able to keep up with demand," said Drew Bayly, Illinois market director for Columbia Care, which operates a cultivation center in Aurora that got permission to begin growing late last fall. "But Illinois will see an increase in production."
Toi Hutchinson, who oversees the state's adult-use marijuana program, said everything was done by design.
"From the beginning, the administration has made clear that it is taking a deliberative and incremental approach to cannabis legalization, both to facilitate an effective rollout and ensure space in the market for social equity applicants," she said.
Forty-eight dispensaries across the state have been approved to sell recreational marijuana, although not all are doing so because of local bans or zoning regulations. The state will issue up to another 75 licenses by May 1, and up to 110 more by Dec. 21, 2021.
Hutchinson pointed to upcoming new licenses for so-called "craft growers" of marijuana that are expected to increase the supply. Craft growers will be much smaller, with an initial 5,000 square feet for plants expandable to 14,000 square feet. The state is expected to approve up to 40 craft grower licenses by July 1 and 60 more by Dec. 21, 2021.
'Under a crunch'
All states that have legalized marijuana had initial shortages, which is normal when novelty first hits the market, Althoff said. "Whether it was the Michael Jordan shoe or the Cabbage Patch doll, there is a run because it's a new, special, cool item."
Gov. J.B. Pritzker and his administration were set on a Jan. 1 rollout, which gave the industry only seven months to prepare, less than in other states such as Colorado and California, Althoff said. The Illinois General Assembly approved legalization May 31 and the governor signed the bill into law June 25.
"The industry pushed back, saying, 'That's really aggressive. We're going to have some difficulties in providing an adequate supply," she said.
Moreover, Illinois will not allow more cultivation centers to open unless that's deemed necessary by a state "disparity and availability" study to be done by March 1, 2021. That means only the existing cultivation centers that grow medical marijuana could apply for licenses to grow recreational marijuana, with the first one approved in August and the last one as late as Dec. 23.
"We were under a little bit of a crunch to be able to meet the demand that would be forthcoming Jan. 1," Althoff said.
Cultivation centers are expanding as fast as state permitting and construction in a Midwestern winter will allow, said Jeremy Unruh, director of public and regulatory affairs for Pharmacann, which operates four Verilife dispensaries and two cultivation centers in Illinois. The expansion process -- from design to state approval, construction to first crop completion -- takes roughly a year, he said.
The clock started ticking last June, when Pritzker signed the bill that included a provision that set the 210,000-sqauare-foot limit for the "canopy" or growing space allowed at each cultivation center.
Unruh said facilities are expanding on their own timelines, with the first products grown in expanded spaces likely to begin hitting stores in April or May.
Pharmacann is working to double the capacity of its Dwight cultivation center. After a roughly $12 million addition that got the green light from the Illinois Department of Agriculture in mid-January, the facility will provide space to grow up to 30,000 plants at a time. Unruh said work has started, but is expected to take several months.
Also pushing demand is the Pritzker administration's approval of additional medical conditions under the medical marijuana program, Althoff said.
Plus, the industry had anticipated greater demand for edibles -- they take seven times more cannabis to produce -- because under the state's "smoke free" legislation, people ages 18 to 21 were prohibited from smoking, including those registered in the medical marijuana program. A recreational marijuana trailer bill approved Nov. 14 changed that for young medical marijuana users, further increasing demand for the flower, Althoff said.
"We had the perfect storm," she said.
Enough for medical users?
In anticipation of potential shortages, the recreational marijuana law established requirements to protect the supply of cannabis products for medical users, Hutchinson said.
The state expanded hours for medical marijuana dispensaries last week: They are now are allowed to stay open from 6 a.m. to 10 p.m., instead of until 8 p.m., just like recreational dispensaries. Medical marijuana patients who feel their needs are not being met can file a complaint with the state's department of professional and financial regulation.
There have been scatterings of medical patients who reported having a hard time getting product, but by and large, medical marijuana supplies have been adequate, Althoff said. "We advertised to our medical patients back in September that they should make sure they have enough product of their own," she said.
Medical marijuana patients prefer the flower form to edibles and other varieties, because the effects are quicker and easier to quantify, she said. It's too early to tell whether a new provision allowing medical marijuana patients to grow up to five plants at home will ease up demand on growers, she said.
Medical cannabis patient and advocate Kalee Hooghkirk, a board member for Illinois Women in Cannabis, said she encourages patients to address the flower shortage themselves by learning how to home grow. She said her business, Full Spektrum Services in West Dundee, plans to host classes to teach the basics of how it's done.
Meanwhile, the first crop at Columbia Care's Aurora cultivation center just cleared testing, and the packing the company plans to use just received approval from the Illinois Department of Agriculture, Bayly said.
The cultivation center includes a 5,500-square-foot "bloom room" and 200,000 square feet of growing space for plants in the earlier, vegetative state. In late October, the company started growing plants in "thrive pods," which are shipping containers outfitted as small grow operations, Bayly said.
The newly available flower and extracts produced in Aurora will be shipped to Columbia Care's dispensary in Chicago, he said, but also to other dispensaries, all of which are prohibited from sourcing more than 40% of their stock from any one grower.
"We are right on the precipice of being able to finalize packaging and get out to market within the next few weeks," Bayly said.