While Illinois legislators squabble over how to authorize the first new cannabis licenses since adult-use sales legalization, two lawsuits in Cook County Circuit Court are moving forward, each with the potential to reveal inner workings of the state’s stumbling cannabis license process.
The lawsuits, one filed by dispensary applicants rejected in a round of licenses originally to be distributed last September, and a second filed by craft grow applicants demanding the state proceed with completing an application process regulators claim is held up by their pandemic response, both have the potential to force the state to turn over minute details on how scoring was conducted, and maybe even force Illinois to turn over thousands of completed applications and scorer notes to justify exactly why which applicants received winning scores.
Adult-use cannabis sales were launched in Illinois on January 1, 2020. One year later, no new licenses have been created, despite a state law that calls for 75 new adult-use dispensary licenses by May 1, 2020, and for 40 new craft grow, 40 new infusers, and an unlimited number of secure transport licenses to be issued by July 1, 2020.
Most of those licenses were targeted at social equity applicants, part of a state cannabis legalization plan that was meant to give people of color a leg up, in compensation for the War on Drugs, which generally targeted minority communities. Instead, a leaked Illinois state report from last July revealed that less than one percent of cannabis license owners are Black or Latino.
The suit filed on behalf of dispensary applicants, Wah Group v. Illinois Department of Financial and Professional Regulation (IDFPR), initially encountered months of procedural delays from the state, but is now facing a motion to dismiss from the state, a common first move by government attorneys who often try to clear the courts of the many lawsuits filed against the state.
Assuming the plaintiffs survive the motion to dismiss – a hearing is scheduled for next Tuesday morning, April 20 – it will soon move to the discovery phase. The Wah Group suit contends, among other charges, “unprofessional handling” of the application scoring. This charge is similar to one made in a suit in Missouri, where a rejected cultivation applicant is demanding Missouri regulators hand over hundreds of applications to prove the state’s scoring process was not “arbitrary and capricious”.
A second suit moving in Cook County Circuit Court, Illinois Craft Cannabis Association (ICCA) vs. State of Illinois, asks the court to force the state to complete the craft grow license process, an application process halted last summer by an executive order from Gov. J.B. Pritzker citing delays due to the state’s Covid-19 response.
Unlike dispensaries, craft grow licenses are managed by a separate state agency, the Department of Agriculture.
An emergency request to push the process forward was refused by a circuit court judge last December, but the original suit grinds on. Last month plaintiffs were awarded the right to discovery by the judge and ICCA submitted a series of requests including, “All Documents relating to a scoring metric, rubric, scoring key or scoring system for Craft Grower, Infuser and Transporting licenses.”
But, according to ICCA attorney David Ruskin and court documents, the answers provided by the state were “primarily rejections without responses” with little information provided, as attorneys for the state repeatedly objected, claiming the requested information was not relevant to the case.
But now, because the state has refused to answer most of ICCA’s discovery requests, ICCA has an option to file a motion to compel the state to provide the requested information, which if a judge agrees, they could become publicly accessible under Illinois trial rules. Typically, information provided as part of a discovery process is not made publicly available unless it is admitted by the judge as evidence in a hearing. The state has fought ICCA’s request for discovery on multiple occasions, so it seems likely it will continue to fight the request.
The outcomes of both suits either create or clear legal jeopardy for any new cannabis licenses created by the state, effectively freezing these sets of licenses and their applicants until either the courts make a decision, or the plaintiffs are able to negotiate a settlement that is then passed through the state legislature. Attorneys for both Wah Group and ICCA tell Grown In they have not been in contact with legislators to discuss a possible settlement.