A multibillion-dollar industry has left many social equity entrepreneurs struggling to survive.
In the six years since Illinois legalized recreational marijuana, dispensaries have blossomed across Chicago’s affluent north side neighborhoods. These stores’ neatly aligned displays of flower, edibles, tinctures, and vapes–along with premium prices–more closely resemble an Apple store than a smoke shop. They are the public face of an industry that has raked in nearly $8.5 billion in statewide sales since 2020.
In some areas, like River North and Wicker Park, upwards of four dispensaries sit within one mile. On the South Side, however, only a handful of licensed dispensaries sit below the South Loop in what remains a mass desert for accessing legal marijuana.
Promises of equity
This disparity stands in contrast with the goals of the Cannabis Recreation Taxation Act (CRTA), signed into law by Gov. Pritzker in 2019, which was heralded as the “most equity-centric” cannabis law in the country.
“The governor’s stated purpose has always been to right the wrongs caused by the war on drugs,” said Erin Johnson, an executive with the Cannabis Regulation and Oversight Office (CROO), which coordinates state agencies involved in cannabis regulation and taxation, as well as monitoring diversity and equity in the industry.
While the governor’s office has celebrated Illinois for having the highest number of minority-owned cannabis businesses in the nation, many have criticized the state for failing to live up to the promises written into the CRTA.
“Black and Brown people were spoken directly to and told, ‘we’re going to make this so much better for you and your communities,” said Peter Contos, Deputy Director at the Cannabis Equity Illinois Coalition (CEIC). “None of those things have changed.”
How large operators won early
When recreational marijuana was legalized in Illinois, entrepreneurs entered an existing medical market that was far from diverse.
Large multi-state operators–powerful corporations that are often criticized for monopolizing the cannabis supply chain on a national level–already operated about two-thirds of the state’s 55 medical dispensaries.
Under the CRTA, lawmakers aimed to diversify the industry through a licensing system that prioritized “social equity applicants.” These are businesses with at least 51 percent ownership from people harmed by the criminalization of cannabis or who live in “Disproportionately Impacted Areas,” census tracts with high rates of cannabis-related convictions and incarceration.
More than 2,000 social equity applications were submitted during the first application cycle in late 2019, competing for an initial pool of just 75 recreational dispensary licenses.
Arianne Richards, one of many social equity applicants whose application was denied, described these early days as a “green rush” as people vied for a piece of the market which, at the time, was projected to make $2 billion in annual revenue.
Richards said small business owners faced steep barriers, including fees totaling $2,500 per submission even after a social equity discount.
“If you did not have the finances to put in more than one application, then nine times out of ten you weren’t going to get awarded the license,” Richards said. According to data from the Illinois Department of Financial and Professional Regulation (IDFPR), with more than 2,600 adult-use dispensary applications submitted by only 900 companies.
“Predatory partnerships” and plus-one licenses
Richards now serves as executive director of Chicago’s National Organization for the Reform of Marijuana Laws (NORML) chapter, a non-profit that advocates for those harmed by cannabis prohibition and criminalization.
Richards said the process incentivized “predatory” partnerships, forcing social equity applicants to partner with larger, well-capitalized multi-state operators to fund multiple applications–undermining the law’s original intent to diversify ownership.
“A lot of these folks that weren’t supposed to be part of the plan became part of the plan,” she said.
At the same time, under the “plus-one” system, established medical dispensaries–many owned by large multi-state operators–were able to apply early for recreational licenses. Known as ‘plus-one’ licenses, this program enabled medical dispensaries to open for recreational sales on January 1, 2020, while the first new-use dispensaries did not open until late in 2022.
A 2024 disparity study revealed that, between 2020 and 2023,“Minority-and-Women-Owned Business Enterprises” (M/WBEs) accounted for 59 percent of licensed recreational dispensaries, but earned less than a quarter of the state’s revenue from recreational sales, underscoring the barriers between licensing and profitability.
Lost time, lost money
Akele Parnell knows the difficulties of making it to opening day. His social equity licensed storefront, Ümi Dispensary, opened in July 2025, years after his initial application.
“From the time that you submit the application, you’re waiting around for two years not sure whether you’re going to have a license or not,” he said, pointing out delays due to an excessive volume of applications, lawsuits challenging the selection process and the unforeseeable disruptions of the coronavirus pandemic. “We were kind of stuck in limbo.”
For Parnell and other social equity license winners, years of waiting can strain relationships with investors, which are already limited in an industry that remains federally illegal.
High taxes with few tax write-offs, costly and complex compliance laws, and limited access to traditional capital channels like banks make it difficult for small cannabis businesses to stay afloat, said Tiffany Ingram, executive director of the Cannabis Business Association of Illinois. The trade organization represents about 80 percent of cannabis businesses in the state, many of which are multistate operators, and works to shape industry policy and regulations.
To address these barriers, the Illinois Department of Commerce and Economic Opportunity (DCEO) launched a loan program for social equity businesses to receive Direct Forgivable Loans of up to $245,000.
Still, these funds are limited. Fewer than half of the applicants received funding in the last round of distributions, while those that do receive DCEO loans may still be a long way from meeting startup costs that can total $2 million.
In an emailed statement, DCEO spokesperson Eliza Glezer said the program “is not intended to support every qualified social equity applicant or fund the entire cannabis industry,” but rather to make capital more accessible to entrepreneurs who often need multiple sources of funding.
“You have to enter into marriages,” Ingram said, acknowledging that the lack of alternative funding sources makes it difficult for newcomers to break into the industry unless they partner with larger, wealthier operators. “Some of those marriages are good and some of those marriages are not so good.”
Only 64 percent of social equity licensed dispensaries have become operational as of January 2026, a recent Crain’s Chicago Business report found, with nearly 100 businesses sitting on licenses, struggling to open. Many others continue to be “in the red” as they recover from exorbitant startup costs.
“It’s like there was no real plan,” said Richards. “Everything sounded nice, but there was no real plan financially.”
A market made for the few
The disadvantages faced by social equity dispensaries have, in part, pushed operators to locate their businesses in wealthier areas of Chicago in the Loop and North Side.
“Economically it makes more sense to locate a dispensary, given the price points and the costs, and the viability of a retail spot, in the neighborhoods with more disposable income,” said Parnell.
Of the 40 dispensaries operating in Chicago, only four are located in Disproportionately Impacted Areas, even as roughly half are operated by social equity license holders who largely come from those areas.
“They say every map of Chicago is the same map. It’s no different with cannabis,” said Contos. “These stores are only located in a handful of neighborhoods. This is not something that people have equal access to.”
Contos points to Illinois’ steep taxes, some of the highest in the country, that make a luxury good of cannabis. “Our taxes alone are atrociously high,” he said. “Off the bat, only a very select number of people are able to go into a dispensary and afford the best product.”
Cannabis dispensary operators interviewed for this story acknowledged that financial constraints play a large role in pushing business to the North Side, though some are trying to buck this trend.
Edie Moore first attempted to open a dispensary in 2014, back when the market was strictly medical. She had her eyes on a location in her home neighborhood of South Shore, but never opened.
Community pushback and perception
Moore noted the role of community pushback in squashing her first business in 2014. “It was visceral,” she said. “It felt like they were coming after me with pitchforks.” For areas affected by the illicit cannabis market, residents can be wary of flooding more drugs onto their streets, even if from legal distributors.
A decade later, Moore now owns the social equity licensed Sway Dispensary in Lakeview, though her mind has never drifted from the South Side.
“It’s the community that I live in, that I work in, that I love,” Moore said. Off the back of Sway’s success, she is now set to open a second location in South Shore.
To avoid the resistance she faced in 2014, Moore points to education as an important step towards equity. “Illinois needs to do its part about educating people,” she said, noting that residents should understand the value of accessing safe, legal cannabis in their neighborhoods. This is especially crucial for those with medical cards, who currently need to travel across the city if they live in a cannabis desert.
Moore wants others to follow her lead and take businesses to the South Side. “Nobody’s ever trying to be in a community of color,” she said. “There’re ways to do it.”
Fixing a broken system
Legislatures in other states have taken lessons from Illinois to write improved social equity programs into law. New York, for example, offered social equity businesses fast-tracked opportunities to open before multi-state operators in their rollout of recreational cannabis.
Advocates are pushing Illinois lawmakers to act upon their learnings of the past six years so that social equity dispensary owners don’t just appear on paper, but are operating lucrative businesses.
A major effort is to allow recreational businesses to sell tax-free products to medical card holders. Currently, recreational dispensaries cannot offer these discounts unless they also have a medical license, which are no longer being issued.
Opening the gates to the medical market
Of the 55 medically licensed cannabis dispensaries in Illinois, not a single one is a social equity enterprise. In order to maintain the medical customer base, operators like Parnell and Moore reach into their own pockets to offer discounts to medical card holders. Others who can’t foot the bill sacrifice the potential profits.
Some believe that changing this law would not just help social equity businesses, but would also allow them to expand into Disproportionately Impacted Areas. “I think if social equity dispensaries were also able to sell medical they probably would come to these areas that don’t have dispensaries,” Richards said.
Advocates are also hoping to pass legislation that would expand the amount of space craft growers can cultivate, remove penalties for public consumption, eliminate barriers into the field for justice-impacted individuals and create anti-monopoly rules.
Since the CRTA was passed, momentum on cannabis legislation has stalled. Many blame the large omnibus bills that these reforms have been packaged in, which lend themselves to opposition for tying so many provisions together.
For her part, Moore thinks that lawmakers need to pay closer attention to the needs of business owners to address the high prices, taxes and other barriers that keep them from being profitable. “Those are things that can be fixed, if people do their jobs. If legislators listen to the license holders and not just advocates who don’t have businesses.”