Location, location, location.
While the advent of internet marketing and dedicated fulfilment centers has made this mantra less important for traditional brick and mortar stores, cannabis businesses in Illinois are afforded no such luxury of web marketing and instead must rely on face to face retail sales and local manufacture of products to stock dispensaries. Whether that location is in downtown, or the northside, southside, way out west, or near the airports, location will greatly effect sales volumes, while also presenting other types of challenges.
Cannabis businesses in Illinois have faced many challenges in the process of acquiring a license and opening a store or cultivation center. From detailed financial disclosures to in depth plans ranging to seed to sale compliance, production specifications, waste removal, and security just to name a few, the process has been heavily scrutinized and incredibly challenging, leaving applicants with stellar rankings still finding themselves unable to win a license.
One of the major challenges has also been finding a location to set up shop, and while licenses are highly restricted, more or less guaranteeing access to enough customers to remain operational, location in the City of Chicago will still have a drastic impact on the choices potential customers make in terms of where to shop.
With the legalization of cannabis in Illinois came highly restrictive location rules implemented by the state, along with giving liberty to local municipalities to set their own restrictions or impose an outright ban on businesses.
To try and understand these rules more I caught up with Steven Vance of Chicago Cityscape. Steven founded Chicago Cityscape in 2014 after earning a degree in Urban Planning. His services provide maps and zoning details for a wide range of applications, focused heavily on policy and regulation-based features designed for developers and property owners to utilize in planning and marketing.
Who were the main types of clients who utilized your service prior to building this cannabis application?
The main types prior to us offering cannabis functionality are the main types now: people who own property, people who sell property, and people who want to develop property. Plus their consultants and partners (like bankers and brokers).
Many of the people who own property are interested in cannabis because they’re either investors in cannabis businesses or they want to help ensure their storefronts are marketed to dispensary operators.
Can you quickly explain the zoning requirements for cannabis businesses?
Chicago recognizes two categories of cannabis businesses: Those that sell and those that grow or process. The selling category includes only dispensaries and no consumption on-site is allowed. The growing and process category includes cultivation centers (warehouses), craft growers (warehouses under a maximum size where the product they create can be sold on-site), as well as infusers and processors that are between cultivation centers and dispensaries.
When and why did you begin mapping cannabis business zones? What is it that people should know most about your product? Does your product include all of Illinois, or just Chicago?
I started mapping cannabis business zones in 2019 when I worked for MAP Strategies as a zoning specialist. Many new clients were coming to the firm, which is known for navigating complex permitting processes, asking for maps. They wanted the maps to show where they might be able to open a dispensary so they could start finding viable storefront locations.
I adopted much of what I learned about cannabis regulations in Illinois and Chicago into the Chicago Cityscape platform so that map-making and storefront investigations could happen somewhat automatically – and that people could find the information themselves without having to ask for a custom service from me or MAP Strategies.
Chicago Cityscape’s Cannabis feature includes maps of all dispensaries and cultivation centers in Illinois, which helps those cannabis business license holders comply with minimum distance regulations. Additionally, it includes zoning districts and schools in Chicago, which has the most complex regulations in Illinois.
What are some key insights folks should know about where cannabis business may be permitted?
In Chicago, dispensaries must be at least 500 feet away from schools that provide K-12 education, whether public, private, charter, or parochial. This rule doesn’t apply to growing and processing businesses largely because the public is not allowed at these locations.
In Illinois, those dispensary license lottery winners who don’t have a social equity license must locate their dispensary at least 1,500 feet away from other dispensaries.
All dispensary operators must apply for and obtain a “special use” permission from the Zoning Board of Appeals, which is a board of at least three people who are not politically tied to the projects they oversee. Applicants must show the board that they meet the standards set forth in the zoning code and satisfy the board members that they’ve designed a good store, have a good security plan, and other business specifics.
Have these areas remained relatively unchanged, or have zoning requirements been more or less dynamic?
In Chicago, the rules about which zoning districts allow cannabis businesses and the districts that establish quotas for dispensaries changed during the City Council meeting on September 20, 2021.
In the proposal, which the zoning committee already adopted and was approved by City Council, the number of storefronts that can allow dispensaries will nearly triple with the addition of C1 and DS zoning districts.
Additionally, craft growers will be allowed in M2 and M3 zoning districts without having to get “special use” permission from the Zoning Board of Appeals, as long as the property is more than 660 feet away from R-zoned property.
Finally, the seven cannabis districts in Chicago were eliminated and the downtown exclusion zone was shrunk significantly.
What hurdles have you faced when creating your product?
There haven’t been major hurdles when creating the Cannabis sections of Chicago Cityscape. The main hurdle is having to recreate the datasets of the listings of dispensaries and cultivation centers in Illinois, as they were not provided as open data.
What hurdles do license winners face when looking for a business site?
I think the biggest hurdle a license winner faces when looking for a dispensary storefront is knowing whether a storefront is being marketed for lease and getting in touch with the owner if it isn’t.
Chicago Cityscape’s Cannabis sections and unique filter within our “Property Finder” feature highlight exactly which buildings are eligible, per the zoning rules, to have a dispensary or growing facility, but we don’t have contact information for the owner or a commercial real estate broker for that site.
How does your product benefit license winners?
Chicago Cityscape’s “Property Finder” feature has been updated to find all of the properties in any given part of Chicago that are eligible to have a dispensary or growing facility. It even gives license winners the option to narrow the search to just properties that are most likely to support conversion to a cannabis business, by excluding vacant lots and parking lots (because new construction is expensive), large office buildings, and certain types of shopping centers.
How does the new city council ordinance opening up business activity downtown affect potential business sites, both current and future? Does your product include these newly opened areas?
I have been following the news closely, largely through Alex Nitkin’s reporting with The Daily Line, as well as through some of Chicago Cityscape’s members.
When the City Council adopts the proposed ordinance the website will be updated within 24 hours.
Do you foresee any more areas being opened up for cannabis business site locations?
I think that if the addition of the C1 and DS zoning districts don’t open up enough locations, some license holders, existing dispensary operators, and business promotion groups will push City Council to expand the list to include B3 zoning districts.
I did an analysis for Block Club Chicago that showed that if both B3 and C1 zoning districts allowed dispensaries, about eight times more properties in Chicago could host a dispensary, but if C1 was the only additional zoning district, a little fewer than three times more properties could host a dispensary.
Do you foresee more cannabis licenses being created/awarded?
I don’t know. I keep reading news about how the state may do another lottery. The reason Chicago needs to open up more zoning districts, and eliminate the geographic quotas, is because there are so many license holders now and every restriction that remains makes it just a little harder to find a viable site for a new dispensary.
I want to thank Steven for taking the time to help us all stay informed and providing such useful information, to find out more, please visit Chicago Cityscape.
