The Kluczynski Federal Building in Chicago, Ill, home of the Northern Illinois District Court.

A federal judge in Illinois’ Northern District cast shade in an in-person hearing Friday afternoon on a request to upend Illinois’ process for awarding 185 dispensary licenses but seemed open to the idea of striking down the state residency requirement for cannabis licenses.

Federal District Court Chief Judge Rebecca Pallmeyer heard oral arguments in Toigo v. Treto over a motion for a temporary restraining order against the issuance of the 185 Illinois adult use dispensary licenses, as well as regulators’ plan to issue additional licenses later this summer. The plaintiffs, Juan Finch, Jr. and Mark Toigo, argue that Illinois’ license residency requirements create a special class, which is not allowed under the equal protection clause of the U.S. Constitution’s 14th Amendment, an argument Mark Toigo successfully used in federal court in Missouri.

Judge Pallmeyer repeatedly asked plaintiffs to explain why they still have standing in the case, since they did not apply when applications were open in 2020, but are suing for relief now. She also questioned whether the relief plaintiffs seek, canceling the award of 185 adult-use dispensary licenses and ordering a new application process, is appropriate, since it could cause significant harm to those who went through the application process – which does not include Finch and Toigo.

“We can’t upend the whole process in favor of someone who didn’t apply in the first place,” said Judge Pallmeyer.

But also, in the course of the oral arguments, she pressed attorneys from the State of Illinois Attorney General’s office to explain why the state’s residency requirement does not create a special class, where there is considerable case law on the issue.

Because, “all of the earlier cases were for legal industries,” said Assistant Attorney General Richard Huszagh. “There is no market for cannabis by federal law. Until Congress repeals the Controlled Substances Act, there is no market…that is why we got to the Illinois-centric market.”

Judge Pallmeyer did not seem to be persuaded by Huszagh’s argument, later saying, “My initial sense about this case is that the law does violate the Dormant Commerce Clause,” she said, referring to the section of the U.S. Constitution that determines whether or not an industry can be considered under federal jurisdiction. “But the claimants don’t get the level of relief requested.”

Plaintiffs’ attorneys John Adams and Daniel Birk from Eimer Stahl repeatedly reminded the judge that they are seeking multiple levels of relief, including the elimination of the state’s residency requirement from future license applications and from ownership of recreational dispensary licenses.

Judge Pallmeyer said she would take the arguments under advisement and announce a decision “soon”.


Editor Mike is a co-founder and the editor of Grown In, a U.S. national cannabis industry newsletter and training company. His career has taken him from Capitol Hill to Chicago City Hall, from...