Small Biz Support Services for Cannabis Equity Applicants

WHY IT MATTERS

Illinois State-level recreational cannabis licensing legislation seeks to provide access to a growing cannabis industry to communities and individuals disproportionately impacted by the war on drugs. Small businesses will face competition from well-funded, multi-state operators. A delay in State licensing due to litigation, lottery, and scoring issues has already cost applicants time, resources, capital, and revenue. To support Social Equity Applicants (SEA), fortify them against buyouts, and best enable their success, the City should promote support services in the following categories: tax, legal, financial, general business support, and marketing.

HOW IT WORKS

The City’s Office of Business Affairs and Consumer Protection (BACP) provides resources, support, and monitoring to businesses it licenses, but the cannabis industry in Chicago is dependent on State licensing which limits BACP’s connection to, authority over, and funding for cannabis business resources. SEAs’ primary City interactions will be with the Zoning Board of Appeals (ZBA).

Proactive City Support and Interdepartmental Collaboration on Existing Support for Small Biz:

The BACP can promote already available resources to SEA businesses through collaboration with the ZBA. BACP can provide access to the following general supports for small cannabis businesses:

1. The Neighborhood Business Development Center which provides grants to 65 business service organizations that assist business owners
2. The BACP on-site Solutions Station where the above organizations provide in-person advice
3. General business events (ex. Chi Biz Strong, Small Biz Expo)
4. Grants (ex. Neighborhood Opportunity Fund, Small Business Improvement Fund)

To ensure SEAs gain access to resources already built into this system, BACP and ZBA should collaborate on promoting these resources during SEA interactions with the City during the zoning process.

Creation of Cannabis-Specific Resources:

The City should consider deploying its robust media and public information department to organize cannabis-specific business resource fairs and events. It could develop programming to address industry-specific issues, such as the complexities of cannabis business taxation and funding.

Long-Term Support Options Include Hiring Support Staff and Enacting New Ordinances:

Finally, the City should consider 1) hiring a project coordinator for new and emerging fields who can support additional programming and 2) SEA-specific ordinances in Chicago, modeled after California’s local equity assistance ordinances.¹ For example, San Jose’s ordinance provides funding for technical assistance and training for prospective employees.² These initiatives can be funded from the cannabis revenue’s general corporate fund.

WHAT'S NEXT

• Identify key services and build out programming in collaboration with BACP, ZBA, and DPD
• Engage with SEA entrepreneurs to provide services and connect them to programming
• Connect policy and legal teams to determine what is feasible for SEA-supportive ordinances
• Explore the option of hiring new and emerging business support staff using cannabis revenue
• Develop tracking and metrics to determine program success rates and areas of improvement

SOURCES

1. See County of Humboldt Ordinance No. 2623; City of Coachella Resolution No. 2019-15; City of Rio Dell Ordinance No. 375-2019; City of Long Beach Ordinance No. ORD-18-0015; City of Los Angeles Municipal Code, Ch. 10, Art. 4, Sec. 104.20; City of Oakland Ordinance No. 13504; City of Sacramento Resolution No. 2018-0323; City and County of San Francisco Police Code, Art. 16, Sec. 1604; City of San Jose Ordinance No. 30234.
2. See San Jose Ordinance No. 30234.