The supply issues plaguing the rollout of Illinois’ recreational cannabis program will continue to be a pervasive problem for months or even up to a year, experts say.
The state’s 21 cultivation centers simply don’t have enough product to supply the few dozen dispensaries, many of which have been forced to set buying limits and even shut down sales to recreational customers in the wake of legalization.
Despite selling nearly $11 million worth of recreational weed in the first five days of legal weed, a half-dozen dispensaries in Chicago did no recreational sales Monday.
While some stores — including Sunnyside in Lake View and NuMed in West Town — plan to restart sales to recreational customers Tuesday, others — like The Herbal Care Center (THC) on the Near West Side — won’t until later in the week when they expect more products to come in.
THC general manager Michael Mandera said stocking the store has been a “day-to-day battle” since recreational sales kicked off last Wednesday.
Mandera said he has been checking what cultivators have in stock each day, but the supply has been “shrinking.”
“I can only sell what I can purchase,” said Mandera, who hopes to have more recreational weed by Thursday.
Dispensary 33 in Uptown remained open to recreational patrons Monday but restricted the number of customers.
“We don’t want to limit, but we can’t serve people like we did the first few days,” said spokeswoman Abigail Watkins. “Every dispensary is just adapting as we go.”
Watkins added that the shop is “taking it one week at a time” by assessing its inventory and future deliveries to gauge its approach to recreational sales.
Cultivators ‘getting buried’
Meanwhile, the state’s cannabis cultivators are also feeling the pressure.
Mark de Souza, CEO of Goose Island-based Revolution Global, said the company’s cultivation center in downstate Delavan is “getting buried now at a level that is even overtaxing our electronic ordering systems.”
Products are selling out within three to six minutes each day, leaving dispensary operators frustrated, according to de Souza. He said Revolution has been shipping $200,000 worth of cannabis flower each week.
More supply months away
It’s unclear how much weed will ultimately be needed to serve the flood of new recreational customers on top of the state’s existing medical patients.
Last month, 56,847 medical patients bought up nearly 2,000 pounds of pot, according to figures released by the state Monday.
Demand for recreational pot can be up to 10 times that amount, said Beau Whitney, vice president of Washington, D.C.-based New Frontier Data, a firm that analyzes the pot market.
He said the increased demand won’t likely be fully met for up to a year from now.
“Generally, there’s not enough growing capacity on the medical side to support the influx of adult-use demand,” Whitney said.
What’s more, the state has no immediate plans to license any large-scale cultivation centers. It does, however, plan to issues up to 40 licenses to smaller craft growers by July 1. The state will begin accepting applications for those permits on Tuesday.
Whitney said the growers will then need local zoning approval as well as a few months to produce pot products.
State regulators ultimately “can really determine the success and failure” of the system by quickly issuing new licenses, he said.
A spokesman for the Illinois Department of Agriculture, the agency that oversees the state’s grow facilities, said Gov. J.B. Pritzker’s administration is “taking a deliberative and incremental approach to cannabis legalization” in order to stage a successful rollout and make way for social equity applicants who have pot-related records or live in areas that have borne the brunt of drug war-era enforcement policies.
Those individuals are getting a leg up in the process of awarding craft grow permits, as well as for permits for new dispensaries and other pot-related businesses.
Still, Andy Seeger — an analyst at the Brightfield Group, another cannabis research firm headquartered in the Loop — believes the situation can improve more quickly even as “extreme shortages” continue for the next two to three months. After that, the current grow centers will be better equipped to meet demand after a new crop of weed comes in from their own scaled up operations.
Indeed, capacity was doubled at the Revolution facility recently and will double again by summer, de Souza said.
Seeger said that it could take an entire year for the new program “to entirely balance itself.”
“The first year is really just a shake out,” he said.