Illinois sets dispensary tiebreaker lottery date as losing applicants discover scoring irregularities

The Illinois Lottery will conduct the dispensary tie breaking selection, say state regulators. (Image from Illinois Lottery)

Nineteen more Illinois dispensary application groups joined the suit against state regulators this morning and the Illinois Department of Financial and Professional Regulation told federal Judge Jorge L. Alonso that IDFPR will wait until September 23 to hold the tiebreaking lottery drawing for licenses. Meanwhile, other applicants obtained their score sheets from state regulators and found scoring irregularities that call the process into question.

The lawsuit, Southshore Restore, et al. v. IDFPR, calls for the court to delay the tiebreaking lottery and treat the, “notification of non-perfect scores to each of the Plaintiffs as the required deficiency notice,” and then require the state to rescore applications. Failing that, “the Court can adjudicate the fairness and accuracy of the Department’s process and findings.” A hearing on the temporary injunction is scheduled for Friday morning.

IDFPR spokesperson Chris Slaby also provided additional information about the lottery procedure, saying in a written statement that, “The Illinois Lottery will hold the conditional adult use cannabis dispensary license lottery utilizing an electronic drawing procedure overseen by external, independent auditors. Whether it will be public or broadcast is being evaluated at this time due to COVID-19 restrictions.”

Grown In spoke to ten different application groups today, not all of whom had obtained their scorecards from the state. But of the four groups Grown In spoke to that had obtained their scorecards, each found some sort of irregularity in the scoring. Each group shared their scorecard with Grown In.

The 2068 Investments application group, represented by attorney Scott Redman, found their group had been awarded five points for having a veteran in their applicant group, despite the fact they had not submitted paperwork for that section, Exhibit T.

“Also, we didn’t get the one point on Exhibit I. I didn’t get any notice of deficiency,” said Redman, referring to a section detailing the Inventory Monitoring and Recordkeeping Plan.

“What triggers a notice of deficiency?”

Redman’s question hovers over many of the applications, as the application form itself states, “If the Division receives an application that is deficient in any respect, the Division will issue a deficiency notice via e-mail to the primary and alternate contacts identified on the application form.”

Another application group, Cultivarx, was stunned to find out that it received no points for social equity applicants, despite the fact that its majority owner, Bernard Cobbins, is Black and a lifelong resident of Chicago’s East Garfield Park neighborhood, a Disproportionately Impacted Area from the War on Drugs.

“We provided them with more than ample information, they had five years of Illinois state tax returns, and driver’s license, voter’s registration card, and a map showing he is in a disproportionate area,” said team member Nonna Knapp.

Despite the detailed information provided, Cultivarx received a discrepancy notice asking for additional information to prove Cobbins’ status. The team did so, and still did not receive points.

Knapp and her husband David, consider themselves experts on Illinois dispensary rules since they won an Illinois medical dispensary license in 2015, which they personally managed before selling three years later.

“On the recalls and quarantine plan, they took out one point. To me this is very suspicious, it seems like someone said they need to fudge the numbers a bit more,” said Knapp. “My security plan, they took out five points. Hello! I had a security plan, it was flawless.”

Anton Seals, who led the all-Black application team, OUR Solutions, showed Grown In an email from IDFPR that said his team’s scorecard was unavailable since his team was disqualified. The disqualification, which did not include any explanation, stunned Seals, since he helped lead 2019 lobbying efforts in Springfield to create the state’s cannabis social equity program.

“It’s sending me all the way over. I spoke for this. If I saw J.B. Pritzker I’d ask him what the F is this for?” said Seals. “You didn’t even tell people they didn’t make it in the process. That was the whole purpose of the deficiencies.”

An executive from Justice Grown, a multi-state operator, says the deficiency notice process was inconsistent. None of the applicants his company incubated received a deficiency notice for missing material for Exhibit J, the proposed floor plan, while others outside of Justice Grown’s incubation groups did not. 

“If there was anything whatsoever or lacking, you were supposed to get a deficiency notice. Clearly that happened for some folks and then not for others,” said the executive. “My guess is that this is going to be found to be a widespread problem.”

One the largest social equity application groups, Forty Acres And A Mule, submitted 63 dispensary applications, but came up with nothing, a surprising outcome to Greg Owens, one of the group’s leaders, since they had studied the process so closely.

“It’s almost comical that it would be exactly what I thought it would be,” said Owens. “At the same time, I’m disappointed. I wish there was not a social equity name on it, because even with this leg up, it’s not an even playing field. I’m interested to find out what was the difference between the applications that won, and what were the determining factors.”

Owens’ group also applied for craft grow, transportation, and infusion licenses, which are expected to be announced later this month. In the meantime, they are studying their legal options.

“They have to get it straightened out,” said Owens. “We know what the political landscape is here in Chicago.”

Ignoring the rain, social equity applicants gathered this morning with Illinois state legislators to protest the application process at the James R. Thompson state government building in downtown Chicago. Belicia Royster, Vice President of the newly formed social equity applicant trade group, S.E.E.N., says there’s still much more to be done.

“We just want to ask for Gov. J.B. Pritzker to review the processing of the results,” said Royster. “We’re really asking them to reconsider offering these slots to just 21 business owners. Based on the spirit of the law, equity would be better disseminated if more social equity businesses were able to participate in the ecosystem.”

Royster encouraged all social equity applicants to request their scores from the state.

Applicants can email FPR.AdultUseCannabis@illinois.gov with the name of their group to request a copy of their scoresheet.

Ed. Note: The original version of this article stated that “some” of Justice Grown’s incubation teams did not receive deficiency notices. The correction shows that “none” of the incubation teams did, and outside groups received notices instead. We apologize for the error.