Illinois lawmakers plan to create 75 new cannabis store licenses to give poor and minority applicants another chance at entering the billion-dollar industry after being excluded by the current system.
The proposed law would double the number of new retail licenses created last year but not yet issued for recreational pot businesses and would attempt to remedy problems with how applications for the licenses are scored. Those problems resulted in a rash of lawsuits challenging the results and have delayed licenses that were supposed to be awarded by July of last year.
“I’m hoping that we clean up the problems we had,” said state Rep. La Shawn Ford, a Chicago Democrat. “Hopefully we learn from our mistakes, and the language in the trailer bill will make it fair and possible for Black and brown people to get into the emerging business.”
Details of the bill were still being hashed out this week in a work group that included lawmakers and representatives from Gov. J.B. Pritzker’s administration. It’s meant to be introduced in the lame-duck session starting Friday, before new lawmakers are sworn in Jan. 13.
In spring 2020, 937 businesses submitted applications for more than 4,500 sites. But only 75 dispensary licenses were available, and just 21 qualified for a lottery to determine the license winners, many of them with multiple perfect scores for licenses in different parts of the state. But because of complaints that the scoring was inconsistent and unfair, the lottery was held up in September while applications are rescored, and no one has received new licenses yet.
Many of those qualifying applicants included wealthy or politically connected members, despite a scoring bonus for social equity applicants, those from poorer areas hardest hit by the war on drugs.
The advantage given to social equity applicants was meant to make up for disproportionate arrests and convictions of minorities in previous decades, allowing them to be part of an industry in which requirements for millions of dollars in capital has left it controlled by a small number of wealthy white men.
Rep. Marty Moylan of Des Plaines, a Republican who opposed marijuana legalization, said he warned that it would not benefit minorities as it was supposed to, and should be fixed.
He noted huge discrepancies between existing and prospective new license holders. The initial medical marijuana license holders have been allowed to keep the cultivation market to themselves, with grow houses up to 210,000 square feet, while new license holders will be limited to 5,000-square-foot “craft” grows. And medical growers and dispensaries now have more than a year’s head start on any competitors.
“It’s a money grab,” Moylan said. “All the big companies got the prime locations and all the minorities were not included. The money is going to all the rich plantation owners.”
The new round of licensing would let applicants qualify by achieving a certain score, rather than requiring the highest scores as in the first round, when only perfect applications qualified.
Only applicants with majority ownership by a military veteran got bonus points to get a perfect score in the first round, effectively disqualifying any applicant without veteran ownership. A lower score to qualify would make the veteran bonus much less significant.
The new round of licensing would allow prior applicants to avoid having to reapply or pay fees again, said state Sen. Heather Steans, a Chicago Democrat and lead sponsor of the original law. Applicants would be limited to two applications, to prevent a few applicants from gobbling up all the licenses, as happened in the first round. The large discrepancy in size limits for growers could be addressed in the future, Steans said.
Meanwhile, the first round of licenses remains held up while applicants are to be given a chance to correct any deficiencies in their applications, as was supposed to happen previously.
“We want a much more diverse group,” Steans said. “We’re focusing on fixing specific problems to get more social equity applicants.”
Previously licensed medical cannabis dispensaries were allowed to open recreational stores on their sites and open second sites. The Illinois Department of Financial and Professional Regulation, which oversees licensing the sites, has approved 81 retail or “adult use” locations so far, which accounted for all the new stores that opened last year.
Other states that have legalized recreational weed, such as Colorado and Washington, allow hundreds of growers and stores, providing lower prices to suppress the illegal market. Opponents of commercialization object that it promotes more use and problems such as substance abuse and impaired driving.
