Dispensary applicants get another chance in Illinois, but don’t expect awards soon

Illinois Gov. J.B. Pritzker speaks to the press about the cannabis dispensary process on Tuesday, September 22, 2020.

On Monday, Illinois cannabis regulators announced plans to provide the latest round of dispensary applicants a supplemental deficiency notice, enabling applicants lacking a perfect score to amend their applications to reach a tie breaking lottery round for 75 licenses. While the state’s announcement caused plaintiffs of a highly publicized federal case to drop their suit, two less proclaimed suits in state courts threaten to hold up the awarding of licenses for months, possibly not until 2021.

Following Monday’s announcement, Gov. J.B. Pritzker took stage before television cameras the next day to proclaim the importance of the decision. “Illinois is working to make a cannabis industry that looks like Illinois,” Pritzker said, lauding the state’s efforts to support equity through the state’s 2019 legislation that legalized recreational cannabis.

The supplemental deficiency notice process, as outlined by Illinois Department of Financial and Professional Regulation (IDFPR) provides that every applicant with a non-perfect score will receive a new notice from the state, detailing problems or missing material from the application. 

Asked for clarification on what happens to disqualified applicants – most of whom received no explanation for their status – an IDFPR spokesman said more is to come. “The Department will provide further guidance to applicants in the coming weeks, including guidance for those applicants whose applications were not scored because their application was disqualified,” said the spokesman.

“It’s a petite response to a grandiose problem. I don’t think it is adequate,” says Belicia Royster, spokesman for S.E.E.N., a non-profit representing social equity applicants. “It is important they release the [scoring] rubric. There are so many cases where they got different scores for the same exhibit.”

Following receipt of the supplemental deficiency notice, applicants have 10 days to provide new or clarifying information to the state for their application, and a new chance to make it to the tie breaking lottery.

Gov. Pritzker, as well as Cannabis Czar Toi Hutchinson were hopeful awards could be made soon.

“We are going to take our time to ensure it is fair,” said Hutchinson. ”We think we can wrap this up this fall.”

Hutchinson’s fall goal will be difficult to reach, however, if two cases continue to move forward in Cook County and Sangamon County Circuit Courts. Both cases claim bonus points awarded to applicants with a military veteran majority-owner is improper, and the veterans’ points should be stripped from consideration. Because there is such a high likelihood of a perfect score, the suits both say, as long as the veterans’ bonus points exist, only military veterans will win the licenses.

“Our lawsuit is going forward because that isn’t being addressed,” said Mazie Harris, attorney for a suit filed in Cook County, Wah vs. IDFPR, that claims the veterans’ bonus points subvert the legislative intent of the law, which was to most heavily weight applications towards social equity applicants.

“I don’t believe that anything was addressed. It was just window dressing. With the veterans points they still won’t be in the lottery,” said Harris, who received permission Tuesday from Cook County Judge Moise Jacobius to file an amended complaint with additional plaintiffs by October 12. 

Tuesday, the state promised in writing to not conduct a lottery until October 15, a date that is sure to be pushed back further, since court rules allow a defendant, in this case the State of Illinois, up to 30 days to respond to plaintiff complaints, pushing a possible lottery long past October, since the plaintiff is then allowed a response brief and possibly time for discovery and depositions of state employees involved in the application process. All of this would come before Judge Jacobius would rule on whether or not the veterans bonus points should be allowed in scoring.

The second case underway, Hazehaus vs. IDFPR, in Sangamon County Circuit Court, has yet to receive even a status hearing date, no great surprise, says plaintiff’s attorney Irina Dashevsky from Locke Lorde, whose complaint says the veterans bonus points creates a special class of veterans, rendering the application process unconstitutional.

Since the lottery is no longer impending, “this can now proceed on a more traditional trajectory,” says Dashevsky. “From my perspective there is no need to file an emergency motion right now because there’s no impending lottery. Sometimes you need a moment to assess the landscape before moving forward.”

Because the state carried out the application process, duly legislated by the Illinois General Assembly, it is not possible for Gov. Pritzker to negotiate away the veterans’ bonus points from already scored applications. Therefore, the only way the Sangamon and Cook County lawsuits can be resolved is by a judge, not through a settlement, as Gov. Pritzker resolved the federal case earlier this week.

“[Pritzker is] hemmed in. It’s up to the court to decide,” said attorney Harris.

That means things will likely move at a stately pace, as the courts consider each step with judicial deliberation.