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New Weed Dispensary Licenses To Boost Black, Brown And Women Owners Proposed Under Compromise Plan

The bill includes up to 115 new dispensary licenses aimed at social equity applicants. But it could face opposition from existing weed firms for regulating when they could relocate their dispensaries.

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DOWNTOWN — New legislation aimed at fixing the state’s botched cannabis licensing rollout, including the creation of up to 115 new dispensary licenses to boost minority ownership, was unveiled this week — but it could face opposition from some of the state’s existing operators.

Rep. LaShawn Ford (D-8th) and a collection of community groups and dispensary applicants gathered Tuesday outside Nature’s Care Company, a West Loop dispensary at 810 W. Randolph St., to announce broad agreement to a compromise bill Ford will soon introduce to the General Assembly.

The bill would create two additional licensing rounds beyond an already mandated lottery to distribute 75 dispensary licenses that were meant to be doled out last May but delayed by the pandemic and myriad lawsuits that forced Gov. J.B. Pritzker to allow companies the chance to have their applicants rescored.

Groups that achieve a perfect score after the rescoring will join the 21 groups previously announced in September in a yet to be scheduled lottery to award the licenses, with 47 of the 75 set aside for the Chicago region.

Two additional lotteries would be held for other applicants who earned less than perfect scores but still qualify for social equity status. Those lotteries would award 75 and 35 licenses, respectively.

The bill also narrows the definition of who qualifies as a social equity applicant for future licensing rounds by lengthening the amount of time someone must have lived in a area disproportionately impacted by the war on the drugs. It also eliminates a provision that allowed a company to qualify if it employs 10 or more employees, including half as social equity applicants, even if the owner of the company did not.

The proposal also calls for five medical dispensaries licenses to be awarded to qualified social equity applicants.

“The work continues until we can get people in the house to vote for it, people in the senate to vote for it and the governor to sign it and Black people and Brown people start making money,” Ford said. 

Statewide weed sales have eclipsed $80 million in the first two months of 2021, but the profits have flowed to an overwhelmingly white and male industry while the communities most harmed by the war on drugs have been left out.

The state issued a report, first reported by cannabis newsletter Grown In, that shows as of June 2020, less than 2 percent of dispensary owners, including those with a minority stake, are Black or Latino, and less than 25 percent are women.

Ford said he’ll introduce the legislation soon after the groups hammer out the final details on who will qualify for the subsequent lotteries.

But the inclusion of a provision allowing existing medical and dual-use dispensaries to relocate could put the bill in the crosshairs of the industry’s current players depending on the bill’s final language.

Pamela Althoff — executor director of the Cannabis Business Alliance of Illinois, a trade group representing many of the state’s cannabis companies, some of whom have climbed to among the largest in the nation — told Block Club the association would oppose the bill if it forces current dispensaries to delay relocating for longer than three months.

Althoff, a former state senator, said “relocation is important to the cannabis industry, however, what’s more important is to get a move on and award these licenses.”

The group supports fixes to the scoring of dispensary applications and the additional lotteries, and is negotiating with state lawmakers and cannabis groups over how long current dispensaries would have to wait until they can relocate.

The group favors waiting three months after the next lottery. Others, including former state senator Rickey Hendon have suggested longer, possibly four to eight months after the lottery.

The bill currently allows medical and dual-use dispensaries to relocate only if the municipality it resides in has banned the sale of recreational weed or the local municipality requests the pot shop move to another location due to zoning issues. 

The dispensaries would have to stay within the same cannabis district they currently reside, and no move could occur until at least 90 days after the lottery for new licenses is held, according to the draft.

The current operators seek to move sooner, but are blocked from doing so under the state’s current cannabis law. Althoff says the group supports standalone bills to address the issue, a longstanding goal of existing companies.

In some municipalities, dual-use dispensaries selling both medical and recreational weed have been pushed by the local authorities to move locations to better handle the increased demand of adding recreational weed sales at the store, Althoff said.

In Chicago, Cresco Labs has long sought to move its Sunnyside dispensary in Wrigleyville at 3812 N. Clark St. to a larger space in the building formerly occupied by John Barleycorn to accommodate more customers. 

Althoff said a cannabis omnibus bill to address multiple issues within the cannabis industry has “been addressed three times and failed.”

“Let’s move forward, and not entangle” the issue of relocation with the goals of creating new licenses, she said. 

Douglas Kelly, president of the Cannabis Equity Coalition Illinois, defended the inclusion of the relocation language.

“We have to allow the people that were most harmed by the war on drugs to get into this industry, before they start switching up locations,” he said. “They chose those locations, so they need to live with that for a little while longer.”

Kelly said if the industry lines up against the bill, “it won’t be the first time it’s happened.”

“We’re hoping to continue working with those individuals to come to an agreement that’s ethical for everybody,” he said. “It can’t be, ‘if I don’t get my way I’m taking my ball and going home,’ everybody has to compromise.

Kelly and Ford were joined at the press conference by Hendon, who created the group True Social Equity Applicants, and Edie Moore, executive director of Chicago NORML. Both are also dispensary applicants. Moore was part of a group that qualified for the initial lottery.

At a press conference last month meant to show unity among the community groups, tensions flared as Hendon and Moore traded barbs on which groups were truly working to fix the state’s flawed licensing system, according to the Sun Times.

On Tuesday, Hendon said the two were now “BFFs,” but took aim at anyone opposed to the bill because of the relocation language.

“I will be pissed off if they oppose this bill because they can not get relocation as soon as they wanted,” he said. “It was hard to get the Black Caucus to agree with relocation period, and if they try to run relocation by itself, it will fail.”

Moore said past policies had “hindered our people from owning businesses in and industry that is increasing exponentially, but capped in the number of the business operators.”

“To be sure, the [the proposed bill] alone is not going to fix all of the issues in the cannabis industry in Illinois, but it does redress the balance of racial equity and opportunity for those who have been left out,” she said.

On Tuesday, a spokeswoman for Pritzker said the governor would “welcome the legislation proposed by Rep. Ford in coordination with community stakeholders that aims to address acknowledged shortcomings in the act.”

“Holding an additional lottery for conditional adult-use dispensary licenses will not only provide a path to participation in the industry for Illinoisans from all backgrounds but also provide high-scoring applicants from the first round an opportunity to gain a license,” she said.

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