Lincoln aldermen continue
preparations for resale cannabis business
Send a link to a friend
[January 16, 2020]
The Lincoln City Council continues to hash through the details of
allowing for the legalized sale of recreational cannabis within the
At the last voting session of December 2019, they approved language
for ordinance violations for buyers and set the fine structure for
Also in December, the aldermen discussed the licensing fees for
establishing a retail business (officially called a dispensary) in
town as well as the fines for retailer ordinance violations, but
reached no decisions before the end of the year.
This week, the topic was back on the agenda at the Tuesday night
Committee of the Whole. The topic was introduced by Kevin Bateman
who said he was going to stay with his previous recommendation that
the license fees be set at $5,000 for the initial permit and $2,500
per year for the renewal.
In regard to dispensary ordinance violations, Bateman suggested
perhaps the city should set the fines at rates comparable to that of
liquor violations, while city attorney John Hoblit suggested that
the city look at the fines already established for smoking
City Treasurer Chuck Conzo said that because there would only be one
cannabis dispensary allowed, the license would resemble that of a
franchise. He said he felt the city should keep the initial fee and
the renewal fee the same, and said it should be $5,000 per year if
Tracy Welch objected to the use of the word ‘franchise’ and said
that the city had not originally set out to franchise a cannabis
dispensary in Lincoln. Conzo said that while the cannabis retailer
would not be a true franchise, it would bear strong resemblance to
one because there will only be one allowed.
Welch also wondered why the licensing fee needed to be so high when
there would also be a good deal of sales tax revenue coming to the
city from the sale of product. Conzo said that in the case of the
franchises that are in the city – Comcast and Ameren Illinois – the
city gets revenue from the franchise and also from the municipal
sales tax, so why not do the same for the cannabis.
However, it was noted that the trash service – Area Disposal – is
also an exclusive operator in Lincoln and does not pay a franchise
fee or tax.
Welch felt that because there was high potential for income for the
business that the city was taking advantage of them. He said that he
felt like the city was trying to take the money because it knew the
retailer could afford it. Welch said that what the city was
proposing was not “business friendly” and wouldn’t look good for
other businesses of any type who might be exploring coming to
Steve Parrot was supportive of the higher permit fees for cannabis
retailers and said if the business couldn’t afford the fee, they
didn’t have to apply or come to Lincoln.
That portion of the discussion concluded with Welch saying that the
council should just put the flat $5,000 per year on the agenda and
let the vote decide.
Retailer Ordinance violations
In discussing the dispensary ordinance violations the council is
again split on how it should be handled. For the upcoming vote there
will be no motion on the agenda for the fines as aldermen will
continue to try and work through it.
During the Tuesday night discussion Hoblit suggested that the fines
be outlined comparable to violations of smoking, while others
thought perhaps they should be established along the same line as
violations for liquor.
[to top of second column]
This sparked a discussion of what is done by the liquor commission to violators.
The answer came from City Clerk Peggy Bateman, who said that for the liquor
violations a lot of the time the most effective deterrent is to suspend sales
for a period of time. This costs the retailer days of income and makes a greater
impression than slapping a fine on them.
Kevin Bateman suggested that the city establish a fine and a ‘three strikes’
process when after three violations a license would be revoked.
Another suggestion was that fines for second and third violations be
substantially increased each time. It was also discussed that to make sure the
fines were paid at the renewal period for the license, all fines should be paid
in full before the license is renewed.
Sam Downs had concerns about the suggestion because he said he didn’t want
long-time businesses to be penalized for mistakes made early in their store
operations. He said that it concerned him that a business could make a few
errors in the early days, work it all out and run according to the rules for
years, then suddenly have a third violation that cost them their entire
Bateman said the three strikes plan could have a clock on it. He said for
example the city could say three violations in 36 months.
In the midst of the discussion, Hoblit reminded the council that this is all new
to them and also to the state of Illinois. He said that even now the state is
writing new amendments to the cannabis laws and that when those amendments come
out as law, it will more than likely have an impact on the city as well. He said
that what the city does now may have to be changed multiple times before it is
all worked out.
At the end of the discussion, Bateman said that the city could put this
particular portion on hold for a little while longer, but he felt there needed
to be a vote very soon on the licensing fees.
While that was the consensus of the council, to wait another couple of weeks on
the fines, it was also mentioned that the fines need to be in place before the
retail permit is issued so that the potential seller will know what the city
At the end of the night, City Administrator Beth Kavelman shared that Cresco
Labs is going to be hiring approximately 100 new employees to accommodate the
expansion of their cultivation center on the north side of town. Cresco will be
hosting a job fair on January 27th at the Oasis Senior Center.
Cresco Labs is a cultivation center and grows cannabis to resale to
dispensaries. For the last few years the operation has grown cannabis for
medical use only. With the change in the state law, it has now expanded the size
of its operation substantially to accommodate the demand for recreational
In the first 12 days of sales from January 1st to January 12th, 2020, the state
has reported that the total sales of cannabis has totaled more than $19,000,000
in 495,385 transactions. At the same time, sales declined continually throughout
the 12 day period. On January 1st total sales were $3,176,256.71 while on
January 12th the sales totaled only $874,121.97.