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Illinois towns see jobs ahead in medical marijuana

Published: Sunday, July 13, 2014 5:30 a.m. CDT

CHICAGO – The prospect of adding jobs – even as few as 30 – has led officials in many shrinking Illinois’ communities to set aside any qualms about the state’s legalization of medical marijuana and to get friendly with would-be growers.

The aspiring growers and their agents have been racing from town to town, shaking hands with civic leaders and promising to bring jobs and tax revenue if they’re able to snag one of the 21 cultivation permits the state will grant this fall. Although not a single plant has sprouted, Illinois’ new medical marijuana industry is pushing the boundaries of what is considered attractive economic development.

“It’s been a long time since we’ve had a company say, ‘Hey, we want to bring in 50 jobs and we want to bring in tax revenue to your school,’” said Liz Skinner, the mayor of Delavan, a central Illinois city of 1,700 residents. The city has annexed property optioned by Joliet-based ICC Holdings as a possible site for a marijuana cultivation center, and Skinner said a new tax increment financing district may be the next step.

Stephen Osborne, an attorney who represents a group vying for one of the growing permits, has been driving from town to town in southern Illinois and introducing himself to local officials. Mostly, he’s been welcomed warmly: “It’s a ‘What took you so long to get here’ type of response,” he said. “Once you mention 30 or more jobs in a small community, they’ll listen to what you have to say.”

A majority of Americans – 54 percent – favor making marijuana legal at least for medicinal use, according to a Pew Research Center poll of 1,821 adults conducted in February. The survey had a margin of error of plus or minus 2.6 percentage points. New York recently became the 23rd state to make medical marijuana legal. Six months before the Illinois law was enacted, a poll by the Paul Simon Public Policy Institute at Southern Illinois University found that 63 percent of Illinoisans favored making medical use of marijuana legal.

In Illinois, city councils from Crystal Lake to Peru to Marion are considering marijuana zoning ordinances and special use permits, though the state is not tracking precisely how many. Permit seekers have simply moved on from the few communities that have voted down such proposals.

The process for building local support “starts with a conversation over the phone,” explained Michael Mayes, CEO of Chicago-based Quantum 9 Inc., a cannabis consulting company that has helped win permits for marijuana producers in four other states. He said the ultimate goal would be to get a letter of recommendation from a mayor that can be submitted to the state.

Aspiring marijuana producers expect Illinois to launch a 30-day application period soon and are rushing to get their paperwork in order. To win a cultivation center permit, they’ll be required to show their plans comply with local zoning rules.

Bonus points toward a winning bid can be had by submitting plans to “give back to the local community,” according to draft rules under legislative review. In Delavan, Mayor Skinner said there has been talk of a cultivation center-supported gift for a drug task force, but no hard promises.

It’s still unclear how many groups will compete for permits and whether applications will emerge in all regions of the state.

“What I say to others who are sniffing around, if you’ve not secured property, local support and a special use permit, give up now because you don’t have a shot,” said Tim McGraw of ICC Holdings, which plans to use the name American Cannabis Enterprises if it wins permits.

Entrepreneurs are looking for existing tax increment financing districts, according to consultants. TIF districts allow cities to finance the cost of new roads, sewers and other infrastructure through future increases in property values.

Attorney Tom Jacob and his consulting company, TIF Illinois, have worked with 65 Illinois cities on tax increment financing. Many of those cities have told him they’ve been approached by cannabis groups.

“It’s being viewed by all our cities as a business opportunity,” Jacob said. He cautions cities not to give money upfront to a developer who may not have financing. The Illinois permitting process will screen out the featherweights, he said, and towns should condition their agreements on state licensing.

“There are serious people with serious money in the state who are looking at cultivation,” Jacob said. “If you have five applicants coming to your town, you want to know who the real people are with real money and interest.”

Delavan’s mayor said concerns about the industry evolving into recreational marijuana are fading. Recreational use remains illegal in Illinois and the conditional use permit the City Council approved specifies it’s for medical cannabis only.

“Most people are very much in favor,” Skinner said. “We want to make sure our town remains viable and keep our school district.”

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