Why you can pay for medical marijuana only with cash

You can legally buy marijuana in the suburbs now, as long as you have an approved medical condition, obtain a state-issued identification card, follow a list of registration procedures - and bring plenty of cash.

Like illegal marijuana, the new legal medical marijuana business launched across Illinois Monday is cash-only.

It's because many banks and credit card companies are reluctant to do business with Illinois dispensaries and growers. Since marijuana sales are still illegal in most states and marijuana use is against federal law, banks fear involvement in the narcotics business could cost them their federal license, said Michael Mayes, CEO of Quatum 9, a Chicago-based marijuana industry consultant.

State banks are more willing to work with medical marijuana businesses, but there are still issues with dispensaries making large daily cash deposits, which are automatically flagged, and with money smelling like marijuana, which banks don't like to accept, Mayes said.

And if you were thinking you could pay with your insurance or health savings account card, think again. Health insurance coverage of medical marijuana is "very, very far off," Mayes said.

So people eager to buy medical marijuana lined up with cash in hand Monday morning at the suburbs' first medical marijuana dispensaries in Addison and Mundelein.

One-quarter ounce of medical marijuana, the largest amount you can buy at once, cost $110 at the The Clinic Mundelein.

While banks might be leery of marijuana money, the state has no such qualms.

Several state agencies will receive payments from marijuana growers and dispensaries. The payments will include a 7 percent tax on commercial growers, ordinary payroll and income taxes, and a $25,000 annual fee for dispensing organizations.

Colorado projects its revenue from marijuana taxes could total $125 million this year.

"It's a multibillion-dollar business," Mayes said.

The suburbs expect to reap the benefits, too. Elk Grove Village, for example, stands to collect hundreds of thousands of dollars from Illinois Grown Medicine, one of 21 licensed medical marijuana "cultivation growers" in the state.

The village will receive 2.5 percent of the company's gross sales in its first three years of operation, and an even bigger percentage after that.

The company also will donate $30,000 to the village every year for community events, and another $45,000 to the police department's DARE program, the Kenneth Young Center, and Alexian Brothers Foundation.

It's unclear how long Illinois' marijuana experiment will last. The pilot program is set to end in a little more than two years, which would put an end to legal pot here unless lawmakers and the governor agree to an extension. So far, Gov. Bruce Rauner has been lukewarm to the industry.

High demand

Business was definitely booming on opening day Monday, where lines formed in the pre-dawn hours at the new suburban dispensaries. Some customers came from more than 100 miles away.

Dozens more clinics, still awaiting product shipments, are set to open soon statewide, including locations in Schaumburg, North Aurora and Ottawa. State officials expect 25 dispensaries will be open to the public by the end of the year.

Only patients or caregivers were allowed inside the Mundelein clinic Monday and the selection process was tightly controlled. Limited supplies of six different kinds of marijuana of varying strengths were being sold. An additional 20 or more varieties are expected to be added to the inventory soon, said Mike Estep, president of GTI (Green Thumb Industries of Chicago), which holds the dispensing license for the Mundelein store.

You can't just walk in and buy marijuana at these dispensaries. You need to be diagnosed with an approved list of health conditions or diseases that are treatable with marijuana, such as cancer or multiple sclerosis, and a pre-issued identification card from the Illinois Department of Public Health. You also have to register with the dispensary.

Roughly 3,300 medical marijuana ID cards have been issued in Illinois so far, including more than a dozen for children, state officials said. But that number is likely to go up as more dispensaries open and patients get information on how to qualify for marijuana prescriptions.

Customers will be turned away if they don't thoroughly complete the process. The first four customers in the Addison store Monday left empty-handed because their registration paperwork wasn't in order.

The first customer to exit the Addison store with marijuana was Christian Favela, who bought some Grape God Bud he hopes will help his multiple sclerosis.

"I've done a lot of research and I'm confident this will make me feel better. I'm looking forward to it."

Illinois is among 23 states with medical marijuana programs.

• Daily Herald Political Editor Mike Riopell and staff writers Justin Kmitch and Mick Zawislak contributed to this report.

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