Potential recreational marijuana dispensary entrepreneurs approach city of Lincoln
Part one: Business developers request support for retail establishment

 

[August 29, 2019] 

LINCOLN 

On Tuesday evening, the Lincoln City Council convened at 6 p.m. The one hour earlier than normal was in anticipation of a lengthier evening to discuss the topic of recreational marijuana. They were not wrong in that plan.

In a discussion that lasted for about half of the three-hour long meeting, aldermen heard from and talked with Eli McVey and April Glosser who would like to establish retail sale of recreational marijuana in Lincoln.

Effective January 1, 2020, any and all adults may legally purchase and consume marijuana for personal enjoyment via a state approved retailer or dispensary.

Illinois has divided its 102 counties into blocks that allow three recreational dispensaries in each block. Logan County is included in the West Central Block.

Each party seeking to establish a dispensary is required to make application to the state for a permit to operate a retail business. Each dispensary is subject to a number of tax laws including a state sales tax; and what is called a THC tax, which will add taxes based on the amount of THS contained with the product being sold.

From Leafly.com - THC, or tetrahydrocannabinol is the chemical compound in cannabis responsible for a euphoric high.

In addition to state taxes, individual municipalities will be permitted to impose a local sales tax of up to three percent on all sales derived from the recreational dispensary.

Eli McVey is a Research Editor for MJBizDaily in Lakewood, Colorado. He is originally from Atlanta, and said that among other reasons for bringing a dispensary to Lincoln he is looking forward to coming home and raising his children in Logan County.

April Glosser is the President and CEO of Thrive Market Intelligence from Rochelle, Illinois. She is working with McVey to develop a marketing plan for a retail business in Lincoln.

On Tuesday evening the two business representatives offered up a presentation exploring the positive impact a recreational dispensary would have on the community and asked the city’s approval to move forward with their application.

The city is in control of the final outcome. Before the application is filed the business owners must determine whether or not the city would want a recreational dispensary in Lincoln.

The local government must pass an ordinance saying they do support the dispensary and also state how much local tax they would assess on the sale of recreational marijuana.

The city may also say that they do not want recreational marijuana sold within the city limits.

If Lincoln turns down support for the business, then the would be business owners would take their plan elsewhere within the block.

Lincoln is the first choice for McVey and Glosser, not only because McVey is a Logan County native, but also because the business entrepreneurs feel that from a marketing standpoint, Lincoln is a hub location that will easily draw retail customers from other portions of the West Central Block and beyond.

McVey has been observing the recreational trends in Colorado as that state has offered such products for quite some time now. He said that the state of Illinois is going to limit its dispensaries to 185 total, where in Colorado there are 560 dispensaries. He said that even though Illinois is allowing recreational dispensaries, they are doing so conservatively.

In his slide presentation, McVey broke down how dispensaries will add up in Illinois. There are currently 55 dispensaries for medical marijuana only. These require a doctor's prescription and the patient must register with the state.

Prescription marijuana is tax exempt, but according to McVey the cost of the actual product (medical marijuana) is very similar to what the (recreational marijuana) product cost will be pre-tax at recreational dispensaries.



The current 55 medical dispensaries will be permitted to convert to medical/recreational effective January 1st. Each of these dispensaries now in operation will be able to open a second dispensary bringing the total medical/recreational dispensaries to 110.

In May of 2020, the state will issue licenses for an additional 75 recreational dispensaries, bringing the total dispensaries to 185.

Because there is no medical dispensary in Lincoln, the license McVey will be applying for with the state will be for one of the additional 75 recreational dispensaries to be issued in May.

McVey also shared the benefits of bringing a dispensary to Lincoln. He said first of all, recreational marijuana will be consumed in Lincoln no matter what. If the dispensary is not local, the consumers will go elsewhere to make their purchases.

If the city does allow the dispensary it will mean job creation for local residents, an increase in the local economic activity, and it will help control the black market.

It was noted that there will still be circumstances where that marijuana is illegal in the state:

- If the product is purchased from an individual or ‘dealer’ and not a state approved dispensary, that is considered a black market purchase and is a criminal offense.

- Also if a person has more than their legal limit that is an offense.

- And finally, the drug is supposed to be consumed only in the customer’s home. It may not be used in public or while operating a vehicle. If caught using in public or while driving, that is also an offense.

In addition to benefitting the economy, McVey and Glosser explained that with the legalization of the recreational dispensaries there are strings attached.

Dispensary owners will be required by the state to participate in community outreach programs. Glosser said this could be by doing fundraisers for local charities such as a percentage of the day's sales going to a specific cause, or employees might volunteer to participate in community activities.

And, finally, the obvious benefit to the community will be in tax revenues. With the city permitted to claim up to three percent of the value of the product via a local sales tax, the city could benefit substantially from the dispensary, especially considering that it will be one of only three in the region, and one of only 185 state wide.

McVey and Glosser said they envisioned Lincoln drawing in shoppers from a large radius because of its central location and proximity to Interstate 55.

McVey said there were also myths or misunderstandings about marijuana that needed to be cleared.

First he said marijuana is not addictive and is not a gateway drug. People do not develop cravings for marijuana and those who use the product do not need ‘fixes.”

Those who use it also do not reach a point where they are not satisfied with the drug and seek something stronger and perhaps more dangerous.

He said that marijuana overdose does not lead to death. People who consume excessive amounts will not die from it, but they will become quite ill. He said that most will experience severe pain, vomiting and paranoia. Their discomfort will last six to eight hours, then it will be over.

McVey said that there is no evidence that legal marijuana increases crime rates in a community.

Regarding teenage consumption, he said that teen consumption actually decreases in legalized areas because the legal dispensaries drive the black market dealers out of business.



McVey and Glosser also spoke about the retail establishments. They said that the stores are modern, bringing in an attractive business that compliments the community. He emphasized that they are not dark little back-alley shops with deals being made under the table.

The business owners will be closely monitored by the state, and would be highly motivated to follow the letter of the law regarding the sale of their product.

The businesses will also be high security with exterior lighting, alarms and security personnel to assure the deterrence of theft, burglary or robbery.

Later in the evening, Mayor Seth Goodman would ask if the pair already has a location in mind for its retail store.

Glosser said that choosing a location is part of the partnership it wants to form with the city. They would join the city and other local businesses in looking for a spot where the community can support the establishment of the store, and where it will compliment other businesses in the vicinity.

McVey said that the floor plan would include 1,500 to 2,000 square feet and would offer good parking options for its customers.

Before, during and after the presentation, there were plenty of comments and questions from the audience and aldermen.

Part two of this series will address those comments and questions.

[Nila Smith]