chicagotribune--2020-05-28--Legal marijuana was supposed to help communities hurt by the war on drugs. But COVID-19 may crush ef

Legal marijuana was supposed to help communities hurt by the war on drugs. But COVID-19 may crush efforts to diversify Illinois’ largely white weed industry.

To foster opportunities for entrepreneurs of color to break into an industry that has seen sales of about $ 147.5 @ @ @ @ @ in the first four months , the state ’ s recreational marijuana law laid out @ @ @ @ @ But now the COVID-19 pandemic could threaten some startups ’ efforts to diversify the largely @ @ @ @ @ out of time and money .

Nakisha Hobbs (cq) and her business partners will be out at least $50,000 if they don't win one of the 40 marijuana craft grow licenses up for grabs in Illinois, seen here in Douglas Park in Chicago on Wednesday, May 6, 2020. coronavirus, COVID-19 The money is coming from their own pockets, and the longer the coronavirus pandemic delays the application process, the higher that figure will climb. They've already paid a landlord $25,000 to hold a property in Schaumburg where they want to open their facility. They'll have to pay him $5,000 more each month for him to hold it past July 1. The state has delayed application deadlines for the licenses, and Hobbs worries they'll delay the awarding of them, too. (Jose M. Osorio / Chicago Tribune) (Jose M. Osorio / Chicago Tribune)
Opening a marijuana business has never been easy.
The industry is highly regulated. Weed is still illegal under federal law, which makes it harder for companies to land financing. And finding a site can be difficult and expensive because the rules on where a cannabis business can locate vary wildly from town to town.
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To foster opportunities for entrepreneurs of color to break into an industry that has seen sales of about $147.5 million of recreational weed just in the first four months, the state’s recreational marijuana law laid out specific social equity rules. But now the COVID-19 pandemic could threaten some startups’ efforts to diversify the largely white-owned industry as they run out of time and money.
Nakisha Hobbs is one of the social equity applicants starting to get nervous. Those applicants either must have a marijuana-related arrest on their record, live in an area disproportionately affected by the war on drugs or meet another qualification.
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“We’ve been basically using our life savings,” said Hobbs, who applied with her business partners to open a growing facility in Schaumburg and a dispensary they hope to locate in Chicago’s North Lawndale neighborhood. “The potential for it to be delayed, delayed, delayed — that gives me anxiety.”
Under the law, ventures applying for growing licenses had to secure a property in advance. That means many of those applicants are making rent or mortgage payments for properties they can’t use while they wait to hear whether they’ve been awarded a license.
That includes Hobbs’ group, which looked at roughly 40 properties before finding one in Schaumburg. The location was not Hobbs’ first choice. The North Lawndale resident wanted to establish the business in her own community, creating jobs and developing the local economy.
After searching in vain for a properly zoned warehouse in the city, Hobbs looked in some south and western suburbs. Many had not established zoning rules for marijuana businesses, but Schaumburg was ready.
Hobbs and her partners paid a landlord $50,000 — only half of which is refundable — to hold a warehouse until July 1, when the state is set to award 40 craft grower licenses. The recipients of those licenses will be the first businesses allowed to grow marijuana in the state outside of the 21 cultivation facilities licensed through the state’s medical cannabis program.
But the state pushed back the application deadline for craft grower licenses by 1½ months because of the pandemic, and Hobbs is worried the awarding of licenses will be delayed too. The state was supposed to award 75 dispensary licenses May 1, but that has been delayed until Gov. J.B. Pritzker’s disaster proclamations end, or the state picks another date.
Hobbs’ group must pay an additional $5,000 per month to hold the property past July 1, she said.
“We may be in a position where we lose the property,” she said. “We already decided we cannot pay more money to hold a property we don’t even know if we can use.”
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Social equity applicants get additional points on their scored applications to operate marijuana businesses, and some financial assistance from the state, including access to low-interest loans and discounted application fees.
Some established marijuana companies also offer assistance. For example, Hobbs received help with applications and application fees from Cresco Labs.
But those avenues of assistance rarely cover the full costs of getting a marijuana business up and running. Access to traditional credit lines is limited, and social equity applicants often must find investors — a difficult task without a license in hand — or bankroll efforts themselves.
“We tried the investor pitches," but nothing concrete materialized, said Kareem Adewole of Chicago’s Ashburn neighborhood who applied for a craft grower license with his wife, Kara. “I guess these people, they’re just in really high places that we can’t even reach.”
The couple qualify as social equity applicants and are using their own funds to start the business. It hasn’t been easy. They recently bought their first home and had their first child too.
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The couple signed a letter of intent to lease a warehouse in the Little Village neighborhood if they win a license. The 20,000-square-foot building would need to be renovated — including new plumbing, new walls and upgraded electrical systems — to house a marijuana growing operation.
Adewole said the letter of intent, rather than a lease, will be a saving grace. “We knew we didn’t have $50,000 to pay five months’ rent in advance for something that’s not guaranteed,” he said. “We didn’t have that money to just throw away.”
Other social equity applicants, however, have struggled to find sites.
Very few buildings in Chicago are suitable for a growing facility, in part because of how hard it is to replicate marijuana growing conditions usually found outdoors, said Dina Rollman, senior vice president for government and regulatory affairs at Green Thumb Industries. The Chicago-based cannabis company counseled social equity applicants on their applications.
There were bidding wars on some properties, and some applicants decided before the pandemic to buy land and build their own facility.
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“But then it’s the complication of knowing that they have to build a new building from the ground up in a very limited amount of time,” she said. “The statute requires that you be operational within six months of the license award … so I think most applicants have a strong preference for finding an existing building.”
Social equity applicants looking for property in Chicago to open a marijuana business already were facing a “costly and cumbersome" zoning change process, Edie Moore, executive director of marijuana reform nonprofit Chicago NORML, wrote in a letter last month to the Chicago City Council’s Black Caucus.
Moore said she expects the real estate problems also will affect the winners of 75 dispensary licenses. While craft grower applicants were required to show they had secured a property for their venture, dispensary applicants were not and have yet to go through that process.
Because marijuana was legal in the state for medicinal use first, medical cannabis companies got a head start in Illinois’ industry. Those companies were allowed to start selling to recreational customers when sales started Jan. 1. But the companies haven’t been without trials recently.
The coronavirus pandemic has delayed new dispensary openings, and capital markets, which had already cooled toward marijuana companies, have become shakier. Deals have fallen through, including an $850 million plan to buy Chicago marijuana company Verano Holdings, and Cresco’s proposed $283 million acquisition of a company that operates dispensaries in Arizona and Nevada.
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Dr. Lawrence Hatchett, an African American urologist in Marion, Illinois, said the pandemic will further hinder social equity applicants’ ability to break into the market and compete with those larger, established operators.
Hatchett lives in an area that qualifies him as a social equity applicant. He is the majority owner of a group that applied for 10 dispensary and two grower licenses, and said he has already personally invested about $175,000 into the venture.
“Almost all of us have seen a contraction of our cash flow due to the pandemic,” he said. “... We’re funding this. … We actually are looking at this as people who live in this area that are trying to create jobs.”
amarotti@chicagotribune.com
Twitter @AllyMarotti


chicagotribune--2020-05-28--Five arrested after two men attacked and robbed on Red Line train on South Side

The suspects , four of them juveniles , were riding the train south from 35th Street to 47th Street about @ @ @ @ @ one of them punched a 62-year-old man in the face and took his bag , @ @ @ @

Five people have been arrested after they attacked and robbed two men on a CTA Red Line train on the South Side early Thursday, according to Chicago police.
The suspects, four of them juveniles, were riding the train south from 35th Street to 47th Street about 12:15 a.m. when at least one of them punched a 62-year-old man in the face and took his bag, according to police.
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The group then dragged a 72-year-old man to the ground as he held onto his bag. He finally gave up the bag, and the suspects left the train at 47th Street, where they boarded a northbound train, police said.
They got off at 35th Street and ran toward the 33rd Street exit, where they were taken into custody after being identified by both victims.
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Charges were pending.


chicagotribune--2020-05-28--Daywatch: City Hall outlines outdoor dining rules, Chicago allows ‘shared streets’ program and resta

Daywatch: City Hall outlines outdoor dining rules, Chicago allows ‘shared streets’ program and restaurants test COVID-19 surcharges

As the state moves toward easing restrictions aimed at curbing the coronavirus pandemic , health officials have offered a new @ @ @ @ @ people are recovering from the infection .
The figure for recovery rate may seem self-explanatory @ @ @ @ @ the number must be interpreted carefully , with a heavy dose of context .

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Good morning, Chicago. Here’s the coronavirus news and other top stories you need to know to start your day.
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Illinois officials on Wednesday announced 1,111 new known cases of COVID-19 and 160 additional deaths, pushing the statewide known case count to 114,306 total cases since the pandemic began. The statewide death toll now stands at 5,083.
The state’s Northeast region — which includes Chicago and its suburbs — has a 14.3% positivity rate. Check our daily charts on where each region stands on positivity rate and other key metrics for reopening.
Each of the state’s four regions are on track to move into the next phase of Gov. J.B. Pritzker’s reopening plan later this week. Here are three charts breaking down Pritzker’s plan.
Curious about what restaurants will look like when they reopen? Find out in this week’s Food & Dining newsletter. Sign up today.
Enrique Barrios paints a planter box at Bar Takito in Chicago's West Loop on May 27, 2020. Plants will be planted May 29 as the bar gets ready for outdoor dining in early June. (Jose M. Osorio / Chicago Tribune)
With desperate Chicago restaurants set to be allowed to host outdoor diners within weeks under the next phase of Mayor Lori Lightfoot’s coronavirus reopening plan, city officials are still trying to come up with a process so many of them can legally do so.
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Speaking to reporters Wednesday about the Lightfoot administration’s phase three industry guidelines, Commissioner Rosa Escareno of the Department of Business Affairs and Consumer Protection urged restaurateurs to apply for the city’s existing sidewalk cafe permits. The annual permits must be renewed each year and start at $600.
Pedestrians walk near the intersection of West Devon Avenue and North Glenwood Avenue on May 27, 2020, in Chicago. Mayor Lori Lightfoot's administration is planning to create several blocks of shared streets on the North and Northwest sides to give people more room to walk and bike while social distancing including North Glenwood Avenue from West Carmen Avenue to West Devon Avenue. (Armando L. Sanchez/Chicago Tribune)
Mayor Lori Lightfoot’s administration is planning to create several blocks of shared streets on the North and Northwest sides to give people more room to walk and bike while social distancing, according to published reports.
The first day of COVID-19 testing at Access Health Facility in Chicago's Englewood neighborhood on May 4, 2020. (Jose M. Osorio/Chicago Tribune)
As the state moves toward easing restrictions aimed at curbing the coronavirus pandemic, health officials have offered a new way to study how often people are recovering from the infection. The figure for recovery rate may seem self-explanatory, but experts caution that the number must be interpreted carefully, with a heavy dose of context.
Dr. Mark Cichon, Professor and Chair Dept. of Emergency Medicine at Loyola University Medical Center in Maywood, talks with the foster mom of a young patient May 27, 2020. (Abel Uribe / Chicago Tribune)
After a lull in emergency room visits due to the COVID-19 pandemic, doctors at four Chicago emergency rooms told the Tribune they have seen an increase in non-COVID-19 patients in the past few weeks, along with signs that some patients are suffering because of pandemic-related delays in care.
Cafe-Ba-Ba-Reeba is among the Lettuce Entertain You restaurants implementing a 4% surcharge to cover increased costs related to the coronavirus pandemic. (Lettuce Entertain You)
The painful arithmetic of making up lost revenue for Chicago-area restaurants will not abate in June — even if reopening plans move forward in the coming month — but some makeshift solutions are drawing ire from already shrunken customer bases.