The promise to Illinois residents was that its new cannabis retail licenses would go to a more diverse group of applicants than before. There would be more social equity licensees: people who had lived in poorer areas or who had once been arrested for possession. There would be more veterans. There would be more first-timers. Yet when the winners’ names were drawn in last month’s lottery for 75 licenses, well, we’ll quote one of the passed-over applicants: “This entire process smells of clout, collusion, political ties and ties to big cannabis.”
Sour grapes? Not so sure. Almost sixty percent of the awarded licenses went to existing cannabis companies. One connected group of companies that won nineteen adult-use dispensary licenses in total were all based at the same downtown Chicago street address. Many winners were found to be connected to multi-state operators.
And although bonus points on license applications were awarded to social equity applicants, there was no limit on the number of applications that could be submitted so long as a $5,000 fee was paid for each. So large operations had the deep pockets to submit multiple applications, while many social equity applicants could barely afford the cost of one.
Who were the winners? Kind of a who’s who of Midwest cannabis. A group that included the former deputy director of Illinois’ medical cannabis program (and a current Cook Count Commissioner.) A group led by two NBA stars. A group backed by the owner of Michigan’s largest chain of dispensaries. A group connected to a cannabis investment fund. And a group including a famous Chicago restauranteur, a former police commander, and a former Chicago Transit Authority official.
Coincidence or not, it’s an end result that’s very similar to the New York State situation covered in our previous article — a stated intent to diversify the selection, but a seeming edge to large, well-connected applicants. And to no one’s surprise, Chicago’s lottery results are being challenged in court. Two plaintiffs have filed a lawsuit to challenge the results; however one plaintiff actually won two licenses in the last lottery so there may not be any actual harm to prove.
As you are reading this issue, a ruling may be taking place — and the presiding judge has already commented that “if you ultimately rule that the whole structure was improper, then the whole thing will have to be redone over again … but then, everybody then would be subject to another … who knows what.” Our translation? This is Chicago, the city where on Election Day everybody is famously encouraged to vote early … and often.