Illinois marijuana hearing draws entrepreneurs
CARLA K. JOHNSON
May. 05, 2014
CHICAGO (AP) — A public hearing on Illinois' new medical marijuana program morphed into an informal networking session Monday, with would-be growers, retailers and patients collecting business cards and sharing trade secrets.
The hearing in Chicago drew about 200 people, with two dozen testifying about proposed rules for the state's four-year pilot program. Pharmacists said they should play an official role. Patients asked for lower fees. A businessman promoted a Colorado company's expertise in growing and selling.
"It's similar to a gold rush," said political consultant Roberto Caldero of Chicago, who, like many, attended only to observe. "Everybody's trying to stake out their claim."
The Illinois Department of Public Health hearing was intended as a forum for patients, not the business owners planning to apply for licenses to grow and sell cannabis. But most of the comments came from entrepreneurs eager to get involved in what could be a $20 million to $30 million industry.
Jonathan Caulkins of Carnegie Mellon University in Pittsburgh, a leading expert on marijuana legalization, calculated the annual sales for Illinois at the request of The Associated Press. But in a recent phone interview, he stressed it was his best guess based on the size of the black market and assumptions about Illinois' restrictive law, which limits the illnesses that can be treated and prohibits patients from growing their own.
Illinois officials haven't publicly estimated the size of the potential market or the taxes it could generate from 21 cultivation centers selling to 60 dispensaries. Recreational marijuana would continue to be illegal.
"As with any new program, it is difficult to estimate costs and revenues," Department of Public Health spokeswoman Melaney Arnold said in an email. "We have used internal fiscal and budget staff to review national trends in costs for (and) revenues from medical cannabis programs. However, costs and revenues vary widely from state to state, and Illinois' program will similarly be unique."
In Colorado, legislative economists estimate the state will sell nearly 2 million ounces of recreational pot next fiscal year. At an estimated $200 an ounce, Colorado would sell nearly $395 million worth.
"They should have made this legal 35 years ago," said Ralph Wilson, who spoke Monday, saying he wants to be involved as a grower. "I would have been wealthy by now, instead of a poor schoolteacher."
Out-of-state businesses may pursue partnerships with Illinois residents like Wilson. Bonus points will be awarded to applicants for having an Illinois headquarters and agents who live in the state.
Erik Williams of Colorado-based Gaia Plant-Based Medicine said his company not only intends to form those types of partnerships, but also is making contact with illegal growers and asking them to donate seeds.
"Here's a big secret: There's marijuana in Illinois right now," Williams said jokingly. "We've identified dozens of persons who have hundreds of strains right here in Illinois right now ... and we've already asked them to donate seeds."
The biggest risk for entrepreneurs in Illinois may be a change in national policy based on the political climate, Caulkins said. President Barack Obama recently told the New Yorker magazine that it's important for the legalization experiments in Washington and Colorado go forward, but the federal stance could change.
"Who's going to win (the presidential election) in 2016? Every bit of this is 100 percent, completely illegal on the federal side," Caulkins said.
The Illinois Department of Public Health plans a second hearing May 21 in Springfield. Written comments are being taken through June 2.
Associated Press medical writer Carla K. Johnson can be reached at http://www.twitter.com/CarlaKJohnson