UPDATE (2/11/2020): The Department of Agriculture recently released a Notice to Local Zoning Authorities, which provides zoning authorities with some guidance on how to complete Exhibit O of the craft grower license application. Per this notice, the zoning authority should check the second box, indicating that the craft grow applicant has come to them for their approval, “if the applicant has submitted an application to the zoning authority for zoning approval (including turned in a zoning application to rezone the property, or a request for a conditional use permit (if required), and/or applied for a license (if required)” (emphasis added).
This clarification does not specifically state that an applicant must submit a special use application. To be safe, applicants should consider submitting the special use application in order for the zoning authority to authorize Exhibit O.
Illinois recently released the applications for craft growers, along with transporters and infusers. Unlike the applications for new dispensaries, the craft grow application requires applicants to confirm with the local zoning authority that their planned location is properly zoned for their business. Seems simple enough, right? Well, upon further research into Chicago’s complex zoning ordinance, our attorneys unearthed hidden issues that these cannabis companies will have to sort through before completing their applications.
Exploring Chicago’s Cannabis Zoning Code
Let’s boil this down to the basics: Where can cannabis craft grow, transporter, or infuser businesses be located? The answer lies within the Chicago Cannabis Zoning Ordinance. According to the ordinance, a few zoning districts specifically prohibit these cannabis businesses (think residential areas and sectors reserved for small business and retail). They must seek out approved districts, like some zoned for commercial and manufacturing. However, even in these areas, cannabis companies will have to obtain a special use license from the city’s Zoning Board of Appeals (“ZBA”) in order to operate. Cannabis businesses specifically must hold at least one community meeting in the ward of their proposed location. This meeting must be held no later than two weeks prior to an in-person hearing before the ZBA, the final step in the special use application process.
So, to recap: Craft grow, transporter, and infuser businesses can only be located in certain zoning districts and must obtain special approval from the city’s zoning department. These cannabis businesses cannot open up shop at all without receiving this special approval.
Zoning in Illinois’s Craft Grow Application
As part of the craft grow application, the applicant must complete “Exhibit O: Notice of Proper Zoning,” which requires input from both the applicant and the local zoning authority. The zoning authority must “affirm that the location identified in the street address” meets one of the following conditions:
- It is “in compliance with currently enacted local zoning laws and regulations to operate a Craft Grower Facility”; or
- It “has applied for local zoning approval to operate a Craft Grower Facility”; or
- It “has no applicable, currently enacted zoning regulations in effect at this time.”
From the language of this exhibit, it looks like the applicant may need to prepare and submit a special use application to the city’s zoning department to get municipal approval for Exhibit O. Again, this seems simple enough until you research what exactly is required for a special use application.
Special Use Applications for Cannabis Companies
The special use application process is arcane, intricate, and time-consuming. It requires familiarity with the city’s zoning process and often demands numerous treks to city hall to gather the necessary paperwork. Here’s a quick overview of the process – you can check out our full article about it for more details:
- Receive an official denial. In order to start the special use application, your business must first be denied for a standard business license. Business owners can apply for a business license at the Business Affairs and Consumer Protection office in city hall. If the proposed location’s zoning is not proper for the business, the Zoning Department will issue an official denial, which you will need to complete the remainder of the special use application.
- Complete and submit the application. The application requires several supplementary exhibits and affidavits, which are listed on a checklist included with the application.
- Post Public Notices. Once you submit your application to ZBA, the zoning office will provide you public notices, which must be posted on the building within five days and visible to all nearby streets. Once the zoning office receives the affidavit and pictures, they will schedule the applicant to appear at the next available ZBA public hearing.
- Appear at the ZBA’s public hearing. Finally, the applicant is required to appear before the ZBA at a public hearing at city hall. An urban planner or certified real estate appraiser must testify on the compatibility of the proposed special use with the particular zoning district and the business’s ability to promote the public good. At the public hearing, objectors to the proposed plan can testify for their position.
The ZBA only holds special use hearings once a month, and these hearings fill up weeks in advance. As mentioned above, cannabis companies must also hold a community meeting prior to their ZBA hearing date. This meeting requires notice to residents and communication with the local alderman, a process which can take significant time to complete – sometimes months, depending on the alderman’s schedule.
In the face of all this uncertainty, many have come to the conclusion that craft grow applicants must submit a special use application in order for the zoning authority to provide the necessary authorization on Exhibit O. This presents a serious timing issue. Craft grow applications are due to the Department of Agriculture in just under two months (no later than March 16, 2020), an insufficient interval in which to prepare a full special use application as well as give the zoning authority enough time to review and complete the authorization. Many companies still don’t have a location in mind, which further delays the process. Applicants may not lock down a location until mid-February, leaving only a month to submit a special use application, hold a community meeting, and complete the zoning authorization, all while preparing the remainder of the extensive craft grow application.
A few of our attorneys actually stopped by the zoning office in city hall a few days ago to try to get these questions answered. Turns out the office’s representatives are just as confused as everyone else, and there is no clear guidance as to what is required on the application. The person we spoke to thinks that the state will require craft grow applicants to procure a special use license, but he wasn’t entirely sure and said that they are still working through this process as well.
The establishment of social equity applicants earned praise for Illinois’s Cannabis Regulation and Tax Act, lauded as a progressive step to secure and protect an ownership stake in cannabis businesses for those who have been negatively impacted by the War on Drugs. The advent of craft grow licenses also allows small businesses to take part in this industry, carving out space where only large corporations operated in the past. However, the vague zoning requirements and unrealistic timeline for craft growers may lead businesses to forgo the special use licensing process. , many of the small establishments the law intended to attract may not be able to withstand the application process, resulting in a less diverse market.
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