Karuna Ventures cannabis cultivation and dispensary company didn’t get the state issued license it wanted to operate a cannabis dispensary in Forest Park – but it did get a license to make cannabis oil products.
Cannabis infusers extract oil from cannabis plants, put that oil in products such as edibles and electric vapor pens, package the products and distribute them to dispensaries. Karuna co-founder and CEO Mike Cardozo said that the company applied for infuser, craft grower and dispensary licenses. While the company got the former, the grower license application is still pending and they didn’t get the dispensary license because of the changes in the application process since their application was originally submitted.
Cardozo said he plans to apply for the dispensary license again in the next round. With one license secured, he is already in the process of getting the business up and running. Cardozo said he hasn’t narrowed down the Forest Park location, but he expects to make a decision within a month and start operations within the next 6 to 9 months.
Under state law, dispensary applications are scored based on employment practices, ownership and employment demographics, environmental impact, impact on the community, its plans for involvement in the community and whether the owners are local. The high-scoring applicants are entered into one of three lottery drawings — the Qualifying Applicants lottery for all applicants that scored at least 213 points, the Tied Applicant lottery for applicants who got the highest score possible and the Equity Justice Involved Lottery for applicants that scored at least 213 points and qualified as a Social Equity Justice applicant.
An applicant can qualify as a Social Equity Justice applicant by either having at least 51 percent of the owners live in an area disproportionately impacted by the War on Drugs, have at least 51 percent of the owners who have either been arrested for cannabis-related offenses or have family members that have been arrested, or hire at least 51 percent of their employees that fit either of the above criteria. Karuna fit the third criteria, so it applied as a Social Equity Justice applicant. But according to the Illinois Department of Financial and Professional Regulations memo, on July 15, a year and a half after the January 2020 application deadline, the state made applicants who qualified under the third criteria ineligible for the lottery. That affectively took Karuna out of the running.
Cardozo said that neither he nor his other two co-founders fit either the first or the second criteria.
Karuna would still be eligible for the other two dispensary license lotteries in the next round and meeting the third criteria still helps in terms of overall scoring. The Infuser and craft grow licenses don’t use the lottery, relying entirely on the scoring system. Cardozo said that Karuna got the infuser license on July 15. While it wasn’t awarded the craft grower license during the first round, the Department of Agriculture is doing a second round from the same pool of applicants “before Dec. 21, 2021.”
Cardozo said he hopes to get the license during the second round, which would allow Karuna to grow its own cannabis. If they don’t, they would purchase product from the cultivation businesses.
Between January and June 2020, it ran a paid training incubator program for “residents of disadvantaged communities, individuals with criminal cannabis records, and Forest Park residents.” It taught them about the nature of products, dosing recommendations and cannabis regulations. Cardozo previously said that, this way, even if it he didn’t get any licenses, those employees will be able to have careers in the industry. In a more recent interview, he said that, now that the license is secured, all program participants will have an opportunity to work for Karuna.
“Social equity is part of our company’s DNA and we are proud to be setting an example for a more diverse and inclusive cannabis industry,” he said.
On Jan. 13, 2020, the Forest Park Village Council voted to allow cannabis businesses in light industrial or healthy industrial zoning districts “by right,” which means that it wouldn’t require additional approval. In downtown and B-2 business districts, they are allowed as a conditional use, which mean they would need to be approved by the Zoning Board of Appeals and the village council.
Cardozo said that he wouldn’t need any further approval, which would rule out the commercial areas. The light industrial district includes the area south of Roosevelt Road to 16th Street between Hannah Avenue and Circle Avenue, while the heathy industrial district includes the Forest Park Mall and the businesses along Industrial Drive.
“Karuna is currently evaluating several real estate options in Forest Park and will be finalizing their property selection in the near future,” Cardozo said. “We are looking forward to becoming a responsible member of the Forest Park business community.”