It’s been a tough month for the state of Illinois when it comes to issuing new cannabis licenses, and here is a recap of why:
- On September 3, 2020, the Illinois Department of Financial and Professional Regulation (IDFPR) announced its long anticipated (and overdue) dispensary license application results by publishing a list of “Tied Applicants.” The IDFPR notified all applicants that there was a tie of perfect scores (252 points—250 plus the two bonus points) in every BLS region. Twenty-one applicant groups (all at least 51% veteran owned), less than 5% of the total number of applicants, achieved a perfect score and would have an opportunity to enter a lottery for the 75 available conditional dispensary licenses. For a number of reasons, this result was met with immediate public outcry and legal action.
- On September 4, 2020, Southshore Restore and Heartland Greens v. IDFPR et al. (20-cv-05264), was filed in the United States District Court for the Northern District of Illinois (federal court). Here, plaintiffs alleged significant discrepancies, inconsistencies, and mistakes in the application scoring and the deficiency notice processes and sought a rescore.
- On September 8, 2020, WAH Group et al., v. IDFPR et al. (2020CH05759), was filed in the Circuit Court of Cook County, Illinois (state court). Here, among other things, plaintiffs sought to enjoin the impending lottery.
- On September 10, 2020, Hazehaus et al., v. IDFPR et al. (2020CH000149)*, was filed in the Circuit Court of Sangamon County, Illinois. In addition to alleging significant discrepancies and mistakes with the application scoring and the deficiency notice processes, this suit seeks a declaration that the five points awarded to veteran-owned applicants is unconstitutional special legislation.
- On September 15, 2020, Clean Slate OPCO, LLC, v. IDFPR (2020CH05871), was filed in the Circuit Court of Cook County, Illinois. Here, the Plaintiff is one of the 21 tied applicant groups and challenges the IDFPR’s interpretation of its right to participate in the lottery.
- On September 21, 2020, Governor Pritzker, citing public concern, announced that additional steps would be taken to ensure fairness in awarding the conditional dispensary licenses—namely that applicants would be provided with a supplemental deficiency notice and a chance to submit additional information for a rescore on application exhibits. Not surprisingly, some (if not all) of the 21 tied applicant groups are not pleased at the prospect of having additional applicant groups in the lottery.
- On September 22, 2020, the Southshore plaintiffs dismissed their federal court case. The other cases discussed herein remain pending.
- On October 5, 2020, SB IL LLC; Vertical Management LLC; and GRI Holdings, LLC, v. J.B. Pritzker et al., was filed in the Supreme Court of Illinois. Here, three of the 21 tied applicant teams filed a motion for a petition for a Writ of Mandamus, seeking a declaration that the supplemental deficiency and rescore process announced by the Governor on September 22, 2020 violates the Cannabis Regulation and Tax Act.
Needless to say Illinois is in a quagmire, and additional litigation is likely on the horizon. This situation has also caused further delay in the issuance of other highly anticipated licenses for craft growers, infusers and transporters.
Please check out our blog for further updates on Illinois cannabis license litigation and other developments affecting the cannabis industry.
* Locke Lord LLP represents the plaintiff group in this action.
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