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State Delays Awarding 75 Weed Dispensary Licenses Promised To Increase Minority Ownership

The licenses aimed at prioritizing social equity owners in an industry dominated by white men won't be doled out May 1 as planned.

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CHICAGO — A crop of new dispensary licenses the state promised would increase minority ownership in the weed industry won’t be doled out by May 1 as planned.

The state is delaying its plan to award 75 dispensary licenses because of the coronavirus pandemic, Gov. JB Pritzker announced Wednesday. The licenses aim to prioritize social equity owners in Illinois’ nascent industry, which so far has been dominated by white men.

The Illinois Department of Financial and Professional Regulation was to award 75 licenses statewide on May 1, including 47 in the Chicagoland area, but an executive order from Pritzker will allow the department to wait until the state’s disaster proclamation is lifted or until the department determines a new date.

“The Pritzker administration remains committed to creating a legal cannabis industry that reflects the diversity of Illinois residents,” said
Toi Hutchinson, the state’s cannabis czar. “We recognize that countless entrepreneurs were looking forward to May 1 and the next step it represented for Illinois’ adult-use cannabis industry.”

While the department is responsible for issuing licenses, accounting firm KPMG was contracted by the state to score more than 4,000 applications submitted by more than 700 applicants in January, department spokesman Christopher Slaby told Block Club.

Of the 700 applicants, 600 identified themselves as qualifying for social equity status, the state announced in January.

Each applicant was permitted to apply for up to 10 licenses, and 50 points out of a possible 250 were awarded to those who qualified for social equity status.

To qualify for social equity status, at least 51 percent of an ownership group applying for a state license has to live in an area most impacted by the war on drugs, been arrested or had a family member arrested for a cannabis-related offense, or have more than 10 full time employees, at least 51 percent of whom would otherwise qualify for social equity status.

Currently, the only shops open are those that were previously part of the states medical cannabis program, and they are owned primarily by white men. The lack of minority ownership in the industry has been criticized by lawmakers and community groups, and Chicago’s Aldermanic Black Caucus tried but failed to delay recreational weed sales until July 1 in an effort to increase minority participation.

The state will continue to award recreational dispensary licenses to existing medical cannabis dispensaries — companies that are permitted under state law to convert to dual-use shops and open a second, standalone recreational dispensary — allowing the state’s existing operators to continue to have a stranglehold on the industry.

The state has awarded five secondary licenses, including two in the lucrative River North neighborhood.

Illinois dispensaries sold $110 million of legal weed this year through March. Dispensaries remain open despite the stay at home order.

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