More cases filed in federal and state courts to stop Illinois dispensary lottery and regrade applications

The Kluczynski Federal Building and Dirksen Federal Courthouse in downtown Chicago. (Ken Lund/Flickr)

Four court cases are moving through Illinois state and federal courts that call for a halt to the state’s forthcoming dispensary lottery and a review of the application process. Each of the suits filed focuses on a different element of the application process and calls for a different form of relief. However, each suit is essentially seeking for their plaintiffs to be admitted to the dispensary lottery. Additionally, on Sunday a pair of Illinois legislators announced support for one federal case, with an offer from the plaintiffs’ attorney to drop the case if Gov. J.B. Pritzker provided immediate relief.

In a preliminary hearing for one of the cases in federal court Friday, attorneys for the state of Illinois promised a judge that the state will not conduct the lottery until at least September 23, or at least until the judge has an opportunity to issue a decision on injunctive relief. The state also agreed to put the lottery on hold in an order issued by a Cook County Circuit Court judge.

Three of the cases are moving through different jurisdictions, with two in federal court. The first case to be filed in the Northern Illinois federal District Court, Southshore Restore v. Illinois Department of Financial and Professional Regulation (IDFPR), which has been amended to include 73 plaintiffs, will have a discovery hearing on Tuesday morning, and a hearing on an injunction Thursday afternoon before Judge Jorge L. Alonzo. 

An amended complaint filed by the Southshore Restore plaintiffs alleges that the application language detailing deficiency notices makes issuing those notices mandatory by the state, and that as a result, the release of scores on September 3 should be treated as deficiency notices. The complaint calls for the state to accept corrections to resubmitted applications for review. Barring that action, the complaint calls for the court to halt the lottery and conduct a court review of the application process to determine if it was, “inherently flawed, marred by conflict of interest, erroneously executed, and/or violated the Plaintiffs’ rights.”

“There is a due process problem,” attorney Jon Loevy for the Southshore Restore plaintiffs told Judge Alonzo in a preliminary hearing last Friday morning. “If your application was imperfect you got a deficiency notice. Some people got deficiency notices on some things. Thousands of teams did not get deficiency notices. For some, the first time they heard was September 3,” when the tie breaker winners were announced.

State Reps. Kathleen Willis (D) and LaShawn Ford (D) announced in a letter and press conference Sunday that Southshore Restore’s attorney Jon Loevy would drop litigation if Gov. Pritzker essentially fulfilled their demands.

“There is no reason to believe this solution would not satisfy some of the most pressing issues,” said Rep. Ford.

Willis and Ford did not offer a solution for the complaints from the other lawsuits filed.

A second federal complaint, filed without an attorney by Naomi Williams, owner of the Avalon Smoke Shop in Chicago’s Grand Crossing neighborhood, calls for a halt to the lottery until applications can be rescored, for applications to be resubmitted without points for veteran status, for applicants with deficiencies to be provided application assistance prior to resubmittal, and for an IDFPR internal review of the application process to determine if there was fraud.

“I’m very passionate about how wronged we’ve been. I just felt like I needed to do something,” Williams told Grown In. “When I saw the [other] federal case, I saw it was focused on veterans, but I’m not a veteran. I felt like being a veteran should not be the deciding factor when getting a license. Social equity should be a deciding factor, but not military experience.”

No hearing date has been set for the Avalon Smoke Shop case.

Cases in state court 

In Cook County Circuit Court, Wah LLC v. IDFPR moves to a hearing on September 22 before Judge Moshe Jacobius, just a day before the earliest scheduled lottery date. The Wah complaint, which currently includes one other plaintiff, calls for a halt to the lottery, for the 21 current tie breaker applicants to reveal their scores, the creation of an administrative review process for other applicants, and for changes to the scoring process that would eliminate the veterans scoring element and the binary scoring system used for each application section.

Meanwhile, in Sangamon County Circuit Court, Hazehaus LLC v. IDFPR was filed Friday with six plaintiffs, but has not yet been scheduled for a hearing. The Hazehaus complaint focuses on the veterans scoring element, and alleges the extra points veterans received turns them into an illegal special class, since the points effectively give licenses to veterans to the exclusion of other applicants. The Hazehaus complaint calls for a halt to the lottery, to rescore applications without the bonus points for veterans, calls the deficiency notice process and binary point scoring system arbitrary, and calls for appointment of a special master to conduct a rescoring of all applications.

“What isn’t stated in the [cannabis legalization] act is a rational basis for why veterans are getting this boost with respect to the application,” attorney for Hazehaus Irina Dashevsky told Grown In. “It’s a 100 percent monopoly for veterans. If this remains, all remaining licenses will go to veteran-owned companies. That was never the intent of this law.”