RIVER NORTH — A controversial plan to turn the old Rainforest Cafe into a cannabis dispensary is facing another road bump as rival business owners are suing to stop it from opening.
The lawsuit was filed Monday by the owners of Green Rose Dispensary, 612 N. Wells St., about two blocks from the former rainforest-themed restaurant. They think a plan to open a dispensary in the former Rainforest Cafe is illegal because it would violate state law to prevent clusters of weed shops from opening near each other, according to the lawsuit.
The plan to convert the former Rainforest Cafe has been controversial since Palatine-based Progressive Treatment Solutions proposed the dispensary in early 2022, hoping to move from Norwood Park to the closed restaurant building, 605 N. Clark St.
The owners had to go back to the drawing board after the Sun-Times revealed their plan was illegal.
State law bars dispensaries from moving within 1,500 feet of another dispensary unless an owner has a social equity license, which the owners did not, according to the Sun-Times. Medical dispensaries also cannot relocate outside their assigned districts, according to state law.
So, Progressive Treatment Solutions partnered with Bio-Pharm to revamp its bid. Bio-Pharm is among the companies that received one of the 185 coveted social equity cannabis licenses from the state in 2021, part of an effort to bring more people of color into the legal weed business.
The majority owner of Bio-Pharm was arrested in 1972 for cannabis possession, making the company eligible for the license lottery under state rules that try to prioritize people impacted by previous drug laws. The majority owner’s son, Kevin Munroe, is the company’s chief operating officer.
Progressive Treatment Solutions also tapped former 17th Ward Ald. Terry Peterson, who is Black, as its CEO.
But GRI Holdings, which owns Green Rose Dispensary, argues the plan to open in the Rainforest Cafe is still illegal.
Green Rose opened in November 2022 and is one of four dispensaries in River North. The dispensary is also one of the state’s first social equity license holders, securing that license before Bio-Pharm.
Green Rose qualified for the state’s social equity license by having members of the management and ownership team who are Black, Latino, veteran and LGBTQ+.
Owners of the dispensary include restauranteur Phil Stefani, former police Cmdr. Thomas Wheeler, former CTA executive John Trotta and veteran Dana Oswald, according to the Tribune. Ownership is “diverse and includes Black, Latinx, veteran and females,” a company representative previously said.
The lawsuit argues that although state law allows social equity operators to operate within 1,500 feet of non-social equity operators, the law doesn’t explicitly allow two or more social equity operators to set up shop that close to each other.
The company argues it would be illegal for the Illinois Department of Financial and Professional Regulation to also grant an operating license to Bio-Pharm on Clark Street, according to the lawsuit.
The Illinois Department of Financial and Professional Regulation did not immediately respond to a request for comment. Bio-Pharm LLC could not be reached for comment.
The lawsuit has the backing of 12 state legislators who recently sent a letter to state regulators asking regulators to prohibit two social equity operators from doing business within 1,500 feet of each other.
The legislators argue allowing social equity dispensaries to operate within 1,500 feet of non-social equity licensees “promotes healthy competition and a diverse market landscape,” but it does not have the same effect if both dispensaries are social equity license holders.
“This would likely foster an overly competitive environment that could hamper the growth and success of these new enterprises …,” the letter said. “The initial vision was to empower these businesses to establish themselves successfully in various prime locations, without having to worry about other social equity groups setting up shop nearby.”
As of Sept. 29, the department had not issued Bio-Pharm an Adult Use Dispensing Organization License, according to its website.
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