As of last August, Illinois craft grow, infusion, and transport license applications had gone through two rounds of discrepancy vetting in the scoring process managed by accounting firm KPMG. Four months later, the state Attorney General argued that regulators could not report the scores because they were delayed by the Covid-19 response.
According to an email discussion obtained by Grown In through a Freedom of Information Act request, an email from the Illinois Department of Agriculture’s (IDOA) assistant general counsel to Agriculture Secretary Jerry Costello II and Gov. J.B. Pritzker’s Senior Advisor for Cannabis Control Toi Hutchinson presents the, “final numbers for the adult use cannabis craft grower, infuser, and transporter applications,” on Aug. 13, 2020. The email then details the number of first and second round discrepancy notices sent out for the licenses.
“The Department has provided frequent, fact-based updates regarding the status of craft grow, infuser, and transporter licenses,” said a Department of Agriculture spokesperson when asked for a comment. “The email in question contains no reference to scores for applications. Instead, the email outlines the number of applications received for each specific license type. As of today, the Department still does not have final scores for all eligible applicants due to the ongoing deficiency notice process that is meant to ensure eligible applicants have a chance to address deficiencies identified within their application. As we have stated since the very beginning of the licensure process, the Department will publicly announce when scores are final and licenses can be issued.”
Gov. Pritzker’s office did not provide comment by publication.
Craft grow, infusion, and transport licenses, originally to be awarded by July 1, have not yet been awarded by the State of Illinois. Pleading delays due to the pandemic, Gov. Pritzker first delayed reporting the scores with a June 29 executive order, with no expiration date. Last October, the Illinois Craft Cannabis Association (ICCA) sued the state, arguing that regulators needed to explain the delay, with a request for the court to force regulators to award the licenses. Then, just before Christmas, on Dec. 19, the state issued a new executive order explaining how Covid-19 has impacted the Department of Agriculture.
On Dec. 23, Judge Allan Walker denied ICCA’s request, ruling that the state’s new executive order adequately explained the delay, and it therefore had no obligation to release the licenses.
“Our attorney argued that the Governor, through his executive order, demonstrated having the need to extend the deadline to issue licenses, and that the governor had the authority to issue that executive order,” said a spokesperson for Attorney General Kwame Raoul. “Our role was not to address or provide information about the department’s internal review process, address delays or provide an update. Our position was and continues to be that the Governor had the authority to delay the final decision, as he was responding to an unprecedented public health emergency.”
In June, Hutchinson told a panel of Cook County Commissioners that, “I don’t think the delay is going to be as significant as with the dispensaries. The craft grow side is well on its way.” When a commissioner in the hearing said those licenses are, “being kicked back to mid-August,” Hutchinson did not disagree.
Many craft grow applicants have complained that they have suffered significant financial injury by the almost ten month delay. ICCA estimates each of its members are spending an average of $10,000 a month to maintain properties and employees assembled for their applications.
Below is the application data presented in the IDOA email obtained by Grown In.
Total applications: 827
Craft Grow: 459
Applicants who received a “first round”* deficiency: 177
Applicants who received a “second round”* deficiency: 312 Applicants who received both a first round and second round deficiency: 79
Applicants who only received a first round deficiency: 71
Applicants who only received a second round: 233 applicants who did not receive any deficiency notice: 417
Social Equity – the options
Applicants chose to meet SE status may change on further review Applications that submitted a social equity exhibit: 812
Applicants that applied under criteria 1*: 492
Applicants that applied under criteria 2*: 117
Applicants that applied under criteria 3*: 36
Applicants that applied under criteria 4*: 123
Applicants that applied under a combination of 1 or more of those criteria: 32*
Applicants that submitted a social equity exhibit but the criteria is unresolved: 12 *
First Round Deficiency Notices were sent for things like corrupted files, failure to redact, not submitting the proper number of USBs (Because we mailed USBs to KPMG, instead of them coming here to upload, we kept 2 USBs from each applicant – 1 redacted, and 1 not. If an Applicant didn’t include enough USBs to send any to KPMG, then they got a deficiency notice)
Second Round Deficiency Notices were sent for not providing 2 forms of proof per year per person to meet the definition of “resided” for a social equity applicant
Social Equity Criteria 1: Applicant is at least 51% owned/controlled by someone who resided in a DIA for 5 of the last 10 years
Social Equity Criteria 2: Applicant is at least 51% owned/controlled by someone who was arrested/convicted/adjudicated delinquent for now expunge-able offense
Social Equity Criteria 3: Applicant is at least 51% owned/controlled by a member of an impacted family)
Social Equity Criteria 4: At least 51% of full time employees of Applicant currently reside in a DIA, have been arrested/convicted/adjudicated, or are members of an impacted family