Section 1290.50 Dispensing Organization - Application Requirements for Authorization

Section 1290.50  Dispensing Organization − Application

Requirements for Authorization

a)         Applications

must be submitted on Division-provided forms and include the following

information:

1)         The

legal name of the proposed dispensing organization.

2)         The

name, address, telephone number, date of birth, social security number and

e-mail address of the proposed dispensing organization's principal officers.  A

post office box may not be used.

3)         The

name of the proposed dispensary.

4)         If

the entity applying is a sole proprietorship, a copy of creation documents.

5)         If

the entity applying is a business organization other than a sole

proprietorship, the following information for the entity applying:

A)        The

type of business organization.

B)        If a

partnership, a copy of any partnership or joint venture documents, and if there

is no written agreement, a statement signed by all principal officers affirming

there is no agreement.

C)        If a

limited liability company, a copy of the Articles of Organization, operating

agreement, and certificate of good standing issued by the Secretary of State or

obtained from the Secretary of State's website dated within seven days prior to

the date the application is filed with the Division. Limited liability company

applicants shall include a listing of all affiliated persons or business

entities holding an ownership interest in the company.

D)        If a

corporation, the name of the registered agent, a copy of the Articles of

Incorporation, Corporate Resolutions if any, and a certificate of good standing

issued by the Secretary of State or obtained from the Secretary of State's

website within seven days prior to the date the application is filed with the

Division. If using an assumed name, a copy of the assumed name registration

issued by the Secretary of State.  Corporate applicants shall include a listing

of all persons or businesses holding an ownership interest in the corporation

standing

issued by the Secretary of State or obtained from the Secretary of State's

website within seven days prior to the date the application is filed with the

Division. If using an assumed name, a copy of the assumed name registration

issued by the Secretary of State.  Corporate applicants shall include a listing

of all persons or businesses holding an ownership interest in the corporation.

E)        If an

unincorporated association, organization or not-for-profit organization,

documents or agreements relevant to its creation, ownership, profit sharing and

liability. If there are no documents as detailed in this subsection (a)(5)(E),

a statement signed by all principal officers stating so.

6)         From

each principal officer, a statement indicating whether that person:

A)        Has

held an ownership interest in a dispensing organization, other cannabis-related

business, or its equivalent in another state or territory of the United States

that had the dispensary registration or license suspended, revoked, placed on

probationary status or subjected to other disciplinary action.

B)        Is a

physician that will be on the dispensing organization's board of directors or

an employee, pursuant to Section 35(b)(5) of the Act.

C)        Is a

registered qualified patient, designated caregiver, provisional patient or OAPP

patient.

7)         Disclosure

of whether any principal officer

has

ever:

A)        Filed for bankruptcy; or

B)        Defaulted on alimony or

child support obligation.

8)         A

resume for each principal officer, including whether that person has an

academic degree, certification or relevant experience with a medical cannabis

business or in a related industry

provisional patient or OAPP

patient.

7)         Disclosure

of whether any principal officer

has

ever:

A)        Filed for bankruptcy; or

B)        Defaulted on alimony or

child support obligation.

8)         A

resume for each principal officer, including whether that person has an

academic degree, certification or relevant experience with a medical cannabis

business or in a related industry.

9)         A

patient education plan detailing

the

benefits or drawbacks of cannabis

strains or products

in connection with the debilitating

conditions identified in the Act and an OAPP participant education plan

detailing the benefits or drawbacks of cannabis strains or products in

connection with medical conditions for which opioids can be, or are, prescribed

for, and

initiatives

to keep

product costs reasonable.

10)         A

description of the training and education that will be provided to dispensary

agents.

11)         A

copy of the proposed operating by-laws.

12)         A

copy of the proposed business plan that complies with the requirements in this

Part, including, at a minimum, the following:

A)        A

description of products intended to be offered;

B)        A

description of services to be offered; and

C)        A

description of the process of dispensing cannabis from a restricted access area

to a limited access area

.

13)

A copy of the proposed security plan that

complies with the requirements in this Part, including:

A)         A description of the delivery

process by which cannabis will be received from a cultivation center, including

receipt of manifests and protocols that will be used to avoid diversion, theft

or loss at the dispensary acceptance point;

B)        The process or controls that

will be implemented to monitor the dispensary, secure the premises, agents,

patients, opioid participants and currency, and prevent the diversion, theft or

loss of cannabis;

and

C)        The

process to ensure that access to the limited access areas is restricted to

qualifying patients, pro

id diversion, theft

or loss at the dispensary acceptance point;

B)        The process or controls that

will be implemented to monitor the dispensary, secure the premises, agents,

patients, opioid participants and currency, and prevent the diversion, theft or

loss of cannabis;

and

C)        The

process to ensure that access to the limited access areas is restricted to

qualifying patients, provisional registration patients, OAPP participants, designated

caregivers,

registered agents,

service professionals or persons authorized by the Act and this Part.

14)       A proposed inventory control

plan that complies with this Part.

A)        The process for integrating the

dispensary's point of sale with the State verification system and Illinois

Cannabis Tracking System using a program interface to record sales and

patients, provisional patients, designated caregivers and OAPP participants in

real time;

B)        A description of the medical

cannabis order fulfillment process for patients, provisional patients and OAPP

participants;

C)        A description of the patient,

provisional patient and OAPP participant sale process;

D)        A description of the process of

dispensing cannabis from the restricted access area to the limited access area.

15)        A proposed recordkeeping plan

and State verification system for patients, provisional patients, designated

caregivers and OAPP participants that complies with this Part.

16)       A

copy of the current local zoning ordinance sections relevant to dispensary

operations. Documentation, if any, of the approval, the conditional approval or

the status of a request for zoning

approval from the local zoning office

that the proposed

dispensary

location

is in compliance with the local zoning rules and

the zoning provisions in Section 130 of the Act

lies with this Part.

16)       A

copy of the current local zoning ordinance sections relevant to dispensary

operations. Documentation, if any, of the approval, the conditional approval or

the status of a request for zoning

approval from the local zoning office

that the proposed

dispensary

location

is in compliance with the local zoning rules and

the zoning provisions in Section 130 of the Act.

17)       For the

building or land to be used as the proposed dispensary:

A)        If

the property is not owned by the applicant, a written statement from the

property owner and landlord, if any, certifying consent that the applicant may

operate a dispensary on the premises;

or

B)         If

the property is owned by the applicant, confirmation of ownership.

18)       A

copy of any proposed marketing or advertising plan or materials.

19)       A

map of the area surrounding the proposed dispensary, extending a minimum of

1,000 feet from the property line in all directions. The map must clearly

demonstrate that the property line of the proposed dispensary is not located

within 1,000 feet of the property line of a pre-existing public or private

preschool or elementary or secondary school or day care center, day care home,

group day care home or

part

day

child care facility.  The map must clearly demonstrate that the dispensary is

not in an area zoned for residential use and identify the existing adjacent

businesses. For purposes of this subsection (a)(19), "pre-existing"

means existing as of the date the proposed dispensing organization submitted

its application to the Division.

20)       A plot

plan of the dispensary drawn to scale.  The applicant shall submit

general

specifications of the

building

exterior and

interior layout.

21)       A

statement

that the d

ispensing

organization

agrees to respond to

the Division's supplemental requests for information

"

means existing as of the date the proposed dispensing organization submitted

its application to the Division.

20)       A plot

plan of the dispensary drawn to scale.  The applicant shall submit

general

specifications of the

building

exterior and

interior layout.

21)       A

statement

that the d

ispensing

organization

agrees to respond to

the Division's supplemental requests for information.

b)         Financial

Disclosure

The applicant shall provide a

statement disclosing relevant business transactions and financial information

connected with the application.  Financial disclosures include:

1)         A

Table of Organization, Ownership and Control, including the ownership structure

and names of the principal officers of the dispensing organization.

2)         A

current organization chart that includes position descriptions and the names

and resumes of each person holding each position.  The resumes shall establish

specific skills, education, experience or significant accomplishments that are

relevant to owning or operating a dispensing organization.

3)         Depending

on business type as applicable, agreements between any two or more principal officers

that relate to the assets, liabilities, property, revenue, royalties, profit or

future profit of the dispensing organization or comparable documents that

establish the legal structure of the applicant, operations, management and

control.

4)         A

copy of compensation agreements among any

persons having a financial interest in the d

ispensing organization.

5)         The

nature, type, terms, covenants and priorities of all outstanding debts,

including but are not limited to bonds, loans, mortgages, trust deeds, lines of

credit, notes issued or executed, or to be issued or executed, in connection

with the proposed dispensary

)         A

copy of compensation agreements among any

persons having a financial interest in the d

ispensing organization.

5)         The

nature, type, terms, covenants and priorities of all outstanding debts,

including but are not limited to bonds, loans, mortgages, trust deeds, lines of

credit, notes issued or executed, or to be issued or executed, in connection

with the proposed dispensary.

6)         Audited

financial statements for the previous fiscal year, which shall include, but are

not limited to, an income statement, balance sheet, statement of retained

earnings or owners' equity, statement of cash flows, and all notes to those

statements and related financial schedules, prepared in accordance with

generally accepted accounting principles, with the accompanying independent

auditor's report. The audit must be compiled by and certified by an auditor or

CPA.  If the applicant was formed within the year preceding the application,

provide certified financial statements for the period of time the applicant has

been in existence.

7)         Complete

copies of all federal, state and foreign (with translation) tax returns filed

by the principal officers of the proposed dispensing organization for the last

three years, or for the period each principal officer has filed tax returns if

less than three years.

8)         Disclosure

of all funding sources used for the proposed dispensing organization, including

documentation verifying the source of the funds and copies of closing documents

in connection with the purchase of a registered business.

9)           The

applicant has a continuing duty to promptly disclose material changes in the

financial information provided to the Division.  If an applicant is issued a registration,

this duty of ongoing disclosure shall continue throughout the registered

period.

c)       Documentation

acceptable to the Division that the applicant has at least $400,000 in liquid

assets under its control for each application

applicant has a continuing duty to promptly disclose material changes in the

financial information provided to the Division.  If an applicant is issued a registration,

this duty of ongoing disclosure shall continue throughout the registered

period.

c)       Documentation

acceptable to the Division that the applicant has at least $400,000 in liquid

assets under its control for each application. Documentation acceptable to the

Division includes:

1)         A

signed statement from an Illinois Licensed CPA or financial institution

attesting to proof of $400,000 in liquid assets under the control of a principal

officer or the entity applying.

2)         The

signed statement must be dated within 10 calendar days before the application

is submitted.

3)         Documentation

otherwise requested by the Division in writing.

d)         An

attestation under penalty of perjury signed and dated by each principal officer

identified in subsection (a)(2):

1)         That

the person has not been convicted of an excluded offense;

2)         That

the information provided to the Division is true and correct;

3)         That,

if the proposed organization is issued an authorization, the applicant will not

operate until the Division approves the applicant's registration packet, the

dispensary is inspected and the applicant obtains a registration from the

Division;

4)         That

the applicant acknowledges receipt and advisement of the notices contained in

the application and agrees to and accepts the limitations of liability and the

requirement to indemnify, hold harmless and defend the State of Illinois,

including:

A)        Limitation

of Liability − the State of Illinois shall not be liable to the dispensing

organization, dispensing organization employees, family members or guests,

qualifying patients or caregivers, qualifying patient's or caregiver's employer

or employees, family members or guests for any damage, injury, accident, loss,

compensation or claim, based on, arising out of or resulting from th

Limitation

of Liability − the State of Illinois shall not be liable to the dispensing

organization, dispensing organization employees, family members or guests,

qualifying patients or caregivers, qualifying patient's or caregiver's employer

or employees, family members or guests for any damage, injury, accident, loss,

compensation or claim, based on, arising out of or resulting from the

registrant's participation in the Compassionate Use of Medical Cannabis Pilot

Program, including, but not limited to, the following: arrest, seizure of

persons or property, prosecution pursuant to federal laws by federal

prosecutors, any fire, robbery, theft, mysterious disappearance or any other

casualty; or the actions of any other registrants or persons. This limitation

of liability provision shall survive expiration or the early termination of the

registration if the registration is granted; and

B)        The

Division requires each registrant to include a signed statement in the registration

packet that, at minimum, certifies that the applicant has actual notice that,

notwithstanding any State law:

i)          Cannabis

is a prohibited Schedule I controlled substance under federal law;

ii)         Participation

in the Compassionate Use of Medical Cannabis Pilot Program (program) is

permitted only to the extent provided by the strict requirements of the Act and

this Part;

iii)        Any

activity not sanctioned by the Act or this Part may be a violation of State

law;

iv)        Growing,

distributing or possessing cannabis in any capacity, except through a

federally-approved research program, is a violation of federal law;

v)         Use

of medical cannabis may affect an individual's ability to receive federal or

state licensure in other areas;

vi)        Use

of medical cannabis, in tandem with other conduct, may be a violation of State

or federal law;

vii)       Participation

in the medical cannabis program does not authorize any person to violate

federal law or State law and, other than as se

of federal law;

v)         Use

of medical cannabis may affect an individual's ability to receive federal or

state licensure in other areas;

vi)        Use

of medical cannabis, in tandem with other conduct, may be a violation of State

or federal law;

vii)       Participation

in the medical cannabis program does not authorize any person to violate

federal law or State law and, other than as set out in Section 25 of the Act,

does not provide any immunity from or affirmative defense to arrest or

prosecution under federal law or State law; and

viii)      Applicants

shall indemnify, hold harmless and defend the State of Illinois for any and all

civil or criminal penalties resulting from participation in the program.

C)        The

Division has the authority to include additional certifications in the

application that would be sufficient to ensure compliance with the program and

all other applicable laws.

e)         All

proposed principal officers must be natural persons. The Division will

communicate with the proposed dispensing organization's principal officers. The

Division will not communicate exclusively with a consultant or attorney working

on behalf of the proposed dispensing organization.

f)         The non-refundable

application fee (see Section 1290.80).