Illinois Rolls Out New $8.75 Million Social Equity Fund

Money used for specific categories won't need to be repaid.

The state of Illinois pledged $8.75 million to qualified social equity cannabis entrepreneurs for help in getting their companies operational, and much of the funding won’t have to be repaid.

According to a news release, the state Department of Commerce and Economic Opportunity will oversee the newly announced Direct Forgivable Loan Program.

“Pending the completion of a simplified documentation process, forgivable loan amounts between $50,000-$500,000 will be released immediately,” the department stated in the release.

Eligible recipients may get loans with 0% APR for 18 months, including no payments for that period, and money used for specific categories of expenses – such as rent, payroll, utilities, inventory, and legal expenses – will be forgiven as long as loan recipients provide receipts.

Craft growers can receive up to $500,000, manufacturers and infused product makers are eligible for up to $250,000, and transporters can obtain up to $50,000.

Gov. J.B. Pritzker called the cash infusion “a much-needed jumpstart for social equity applicants,” but at least some stakeholders are waiting to see if the state delivers on its promises, given the years-long delays the Illinois social equity program has already endured.

The Chicago Sun-Times reported that the state will disperse monies to at least 35 companies that have been awaiting state aid for cannabis cultivation, retail, distribution, and manufacturing ventures.

But a prominent trade association said the proof will be in the pudding, since the new loan program is a reboot of a much-criticized first attempt, which included interest rates of 8% for loan recipients and was moving too slowly to be of real use for entrepreneurs.

“This is great news, but I will be waiting to see the implementation,” Lisbeth Vargas Jaimes, executive director of the Illinois Independent Craft Growers Association, told the Sun-Times. “Everything with this process has taken so long.”

Vargas and other social equity stakeholders have voiced a number of concerns about the status of the Illinois program, particularly due to a March deadline for license recipients to get their companies up and running. Any that aren’t open for business by then could have their permits revoked, making time of the essence.

And startup capital has been hard to come by, the Sun-Times reported.

A spokeswoman for the Department of Commerce told the Sun-Times that the agency will be holding a second round of loans for social equity retailers as well. Details on that funding pool have not yet been released.

John Schroyer

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