One of the state's fastest-growing craft cannabis companies closed on $7 million in new funding this week with plans to "double down" on Illinois' cannabis industry.
Founded in 2023, Cannect Wellness had zero products in stores to begin the year yet can now be found in the majority of dispensaries in the state — around 130 stores — with new funding to further fuel its growth here.
The company's most recent financing — from both new and existing investors — brings Cannect's total funding to $14.5 million.
Why Cannect is keeping focused on Illinois
"Illinois is definitely a large market, and we think that the licensing structure here and opportunities that's been given to new entrants has really positioned us and others for success," Gabe Singal, co-founder and CEO of Cannect Wellness, told Chicago Inno. "It's a limited-license market," meaning a limited number of applicants receive dispensary or grower licenses, "and there's a lot of room to grow," he said.
The cannabis industry in Illinois reached $1 billion in 2024 cannabis retail sales in July, the state announced, exceeding $2 billion in total cannabis sale in fiscal year 2024. Meanwhile, in California, one of the earlier states to legalize marijuana, the cannabis industry has shown signs of freefall, reported SFGate.
San Francisco-based Eaze, a decade-old cannabis delivery company once dubbed the "Uber of weed," is winding down operations. Other big name distributors and brands like Flow Kana, MedMen Enterprises and High Times also face uncertain futures, reported Green Market Report, as legal marijuana sales in California have fallen over the last three years.
"I think Illinois has set up their licensing structure to succeed by limiting licenses versus other states where there is no limit," Singal said. "While there's a bit of a lift working through zoning and permits, it's a program that's set up to allow companies to succeed for the long-term."
What's next for Cannect Wellness
Rather than expand to new states, Singal wants to use its new funding to "double down" on Illinois and expand Cannect's offerings to new products.
Cannect sells three current products: flower, live resin and its "secret sauce," but will launch an array of new products in the fourth quarter and Q1 of 2025.
The value of product sold in Illinois so far this year was 49% cannabis flower, 32% vape and 22% edibles, according to state officials.
Cannect also plans to double the size of its team. The company is currently working out of a 22,000-square-foot Franklin Park facility that Singal said can be built out to 62,000 square feet as the company continues to grow.
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