People living in Illinois who have been worst affected by the War on Drugs have been granted an entry point into the legal cannabis industry.
Based on recent reports, $21 million in taxpayer funded low-interest loans will be granted to state residents who wish to open a legal weed business with minimal investment. Fees paid by cannabis growers and dispensaries will be used to fund the loans.
The Cannabis Business Development Fund was created as part of Illinois state’s cannabis legalization law. Patients who qualify will be able to obtain loans and launch a business of their own.
According to Illinois State Senator Tou Hutchinson, the program has grasped attention “as far away as New Zealand to talk about what Illinois did, because every equity program usually fails when there’s no capital invested behind it.”
Cannabis social equity loans in Illinois provided to ensure equitable opportunities
Lawmakers in Illinois claim that the generous $21 million being offered in loans to successful social equity applicants will ensure equitable opportunities for all. Currently, white business owners make up the majority of “cannapreneurs” in Illinois.
One African-American entrepreneur is generously offering $250,000 in loans to 100 social equity applicants; the loans will have a low interest rate or no interest at all. The application window for the Illinois social equity program shut on January 2, with adult-use sales launching on January 1.
Eligibility criteria for cannabis social equity loans in Illinois
In order to be considered for a state loan, eligible social equity applicants in Illinois must reside in an area that has a higher than normal rate of cannabis-related arrests. Alternatively, eligible applicants must have previously being arrested for consuming the plant or, conversely, be related to someone – e.g. a child, spouse or parent – who has been convicted of a cannabis-related crime.
Businesses that are no less than 51 percent owned or operated by one or more eligible applicants also fit into the eligibility criteria for cannabis social equity loans in Illinois. Eligible businesses that have in excess of 10 full-time employees can also qualify, so long as at least half of the workforce comes from a disproportionately impacted area or has been convicted of a cannabis-related offense.
Cannabis social equity loans constitute just one of many different policies contained in the state’s recreational cannabis law, according to Hutchinson.
“So the No. 1 barrier to entrance is access to capital and we created a revolving loan to help seed social equity applicants,” Hutchison explained. “We needed sales to start so that we can fund the money to go into community reinvestment programs because equity is way bigger than just who owns it. It’s also what you do with the money and it’s also how you undo the harms that were actually done during the entire prohibition.”
Eventually, state officials feel optimistic that the fund will exceed $30 million. Moreover, officials are hopeful that destruction caused by the War on Drugs can be reversed.
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