First Illinois cannabis infusers open in Hazel Crest and Pekin as industry slowly begins to take off

The opening of the first two licensed cannabis infusers in Illinois shows that having startup money and making business connections are crucial to overcome some of the obstacles facing the industry.

Infusers buy cannabis oil from growers, and infuse it into edibles, lotions and other products. Both Contract Canna and Krown LLC self-financed their startups, and formed partnerships with established companies, while many of their competitors are still on the sidelines, trying to get investments or loans.

Contract Canna, licensed as MME Illinois LLC in Hazel Crest and already operating for three weeks, is selling its Dibz gummies in some 30 licensed cannabis stores, and Krown is making its Enliven brand of tarts, mints and cookies in downstate Pekin.

But both companies have also contracted to make products for other companies. Krown will make fruit-flavored gummies for Oregon-based Wyld. Contract Canna will make cannabis-infused beverages for another yet-to-be-named brand, and is certified in good manufacturing practices to offer manufacturing, packing and distribution.

The contract work not only gives them quicker income, but access to experience and expertise in the field. Being self-financed by family and friends, the two companies can also make decisions quickly.

“We have knowledge of how to produce the product. They can focus on sales and marketing,” Contract Canna CEO and co-founder Ben Dreyfuss said.

State regulators classified both infusers as preferred “social equity” applicants. Dreyfuss said Contract Canna qualified because he and his father come from qualifying areas in the south suburbs near Hazel Crest.

While beverages make up a tiny percentage of the cannabis market, it’s a niche that has potential for growth. Lagunitas, for instance, has started selling HiFi Hops, a nonalcoholic cannabis infused sparkling water, in California.

Dreyfuss said it’s unfortunate that the other 52 infusers have been unable to open, mostly because of delays in licensing and a lack of capital.

“Money is the biggest thing, because the delay in the Illinois market and economic factors caused money to go to other states,” he said. “COVID hit, money dried up. Now it’s drying up again because people see what’s happening with share prices of cannabis companies (going down).”

Krown held a ribbon-cutting Tuesday to mark the opening of its 13,000-square-foot industrial kitchen. Krown majority owner is Allison Dries, who previously worked in chemical and manufacturing engineering for Caterpillar Inc.

Using their own savings and investments from family and friends, Dries and co-founder Eric Labraaten bought an old warehouse and converted it into their dream cannabis kitchen.

To meet the state’s preferences for social equity businesses, the majority of Krown’s 17 employees had a prior minor cannabis arrest or conviction, or came from a neighborhood that was poor or had a high rate of marijuana arrests.

“We’re offering high-paying jobs to people who may not have had those opportunities,” Dries said. “That’s a long-term thing.”

While the state recently reversed its policy and allowed infusers to make vape cartridges, Dries said she has no plan to do so for now, considering much larger companies make some 200 cartridges on the market.

“We want to be much more niche than that,” she said.

Krown aims to make low-dose edibles that, as required by law, are laboratory-tested for potency and contaminants.

“We’re offering a safe, reputable amount of THC, so you can very closely control your experience,” Dries said. “Start with a low dose and go slow.”

However, the Department of Agriculture decreed that infusers may not extract cannabis concentrate from flower — they have to buy concentrates from growers. Cultivators can make their own infused products, so when they sell to an infuser, they’re selling to their competitor.

Infusers may also buy and process products made from hemp, such as CBD, but may not make intoxicating compounds from it, such as delta-9 THC, the main component that gets users high, or similar knockoffs such as delta-8 THC or THC-O.

Since 2021, the state Department of Agriculture has issued 88 craft grow licenses, 54 infuser licenses and 189 transporter licenses, and approved 10 community colleges to offer cannabis job training.

Only one craft grower, Star Buds in Rockford, has announced its opening so far, though another dozen are expected soon.

Most new state licensees are far behind, in size, time and name recognition. The 21 cultivation centers originally approved to operate under the medical cannabis program generally began operating around 2015.

Agriculture Director Jerry Costello II welcomed the openings.

“We have seen this industry adapt and overcome a number of challenges these past two years,” he said, “and with roughly two dozen others close to opening their doors, it’s a time of great momentum and growth in the Illinois cannabis field.”

rmccoppin@chicagotribune.com