Feb. 28--A business that won three permits to grow medical marijuana in Illinois is giving up at least one of the licenses after not paying the required fees, state and local officials confirmed.
The end of the deal reflects the financial pressures the industry is facing because so few patients have signed up or been approved for medical cannabis, a local official said.
Green Thumb Industries LLC, also known as GTI, had an option to buy land in rural Dixon for one of its three cultivation centers but has canceled the contract, said John Thompson, president of Lee County Development Association, a party to the contract.
A GTI spokeswoman said the company would defer comment until state officials made an announcement. A spokeswoman for the Illinois Department of Agriculture, which oversees the cultivation center licenses, confirmed that GTI missed Wednesday's deadline to pay state fees and submit proof of a surety bond and notified the state that it "will not move forward with their permit for District 1."
GTI was also awarded licenses to grow cannabis in Rock Island and Oglesby. Regulators required that license winners pay a $200,000 fee and secure a $2 million surety bond or escrow account for each permit by Wednesday. The warehouses for growing pot, which are expected to cost millions of dollars to build and operate, must be up and running within six months, or the license holders may forfeit the bond money to the state.
Thompson said GTI officials told him they did not want to pay the expense for all three permits in part because the market in Illinois is so small, with only about 1,000 confirmed patients so far.
"I know they had concerns about how deep the market was," Thompson said. "A lot (of investors) are thinking, do we want to put this much money into it if the market isn't there?"
A competitor, IPP of Glenview, apparently had fewer qualms, and bought and started developing an adjacent property for a cultivation center in Dixon last fall, Thompson said. IPP did not get the license, but may be line for it if it becomes available again, he said.
Dixon Mayor James Burke confirmed Thompson's account, saying he hoped IPP would get the license to provide jobs in the area.
State lawmakers legalized medical marijuana effective last year, but implementation of the program has been beset by delays. Former Gov. Pat Quinn's administration failed to award the licenses before he left office in January.
Gov. Bruce Rauner took office questioning Quinn's handling of the program, and promising a thorough review of the process. Rauner's office announced 18 cultivation license winners this month, with two more under review, and has awarded 54 licenses for dispensaries, with several more under review.
At least two lawsuits challenging the state's licensing procedures have been filed by medical marijuana applicants who did not get licenses.
rmccoppin@tribpub.com
