Last Thursday night, the evening before the Illinois legislature was to hear the first testimony of a new session on proposed laws that would create hundreds of new cannabis dispensary licenses, the CEO of Green Thumb Industries (GTI), Ben Kovler, sent a letter to leaders of the Cannabis Business Association of Illinois (CBAI), announcing that, “we have made the decision to withdraw our membership and leave the association as of today.”
By the next morning the text of the letter had been leaked to and published on CapitolFax.com, an Illinois legislative politics news site. Multiple CBAI board members told Grown In they were shocked by the move, as well as accusations leveled in the letter, especially GTI’s charge that CBAI was not moving quickly enough to expand, “industry ownership and opportunity to new and diverse entrepreneurs.”
“I don’t know what his agenda is, but I wouldn’t wouldn’t take it at face value,” said Bob Lansing, co-owner of Quincy, Illinois’ Herbal Remedies dispensary and a member of the CBAI board.
Multiple CBAI leaders told Grown In they were stunned that Kovler’s letter, sent to CBAI’s executive committee Thursday night, had found its way to CapitolFax in less than twelve hours.
“It’s chaos, you know. It’s a muddy the water, divide-and-conquer thing,” said Lansing. “I think the association has done more to feed the success of the social equity program than anything else in the industry.”
Green Thumb Industries’ announcement quickly overshadowed whatever progress was made in Friday’s Illinois House committee hearings, where cannabis social equity advocates have been striving to build consensus around a bill shepherded by State Rep. La Shawn Ford (D-Chicago) that would allow the state to issue 185 new dispensary licenses, most of which would be awarded to social equity applicants. For these activists, GTI’s withdrawal from CBAI was seen as grandstanding and potentially jeopardizing the future of new Illinois licenses for social equity applicants.
“What kind of horseshit is this?” said Chicago NORML executive director Edie Moore. “They literally blew up this whole thing last year over some stuff over relocation. I wouldn’t believe it as far as I can throw it.”
Last May, GTI vociferously opposed an omnibus bill backed by state regulators, social equity advocates, and every other member of the CBAI board that would have eased the creation of new cannabis licenses, and given state regulators power to manage how much product is directed to which dispensary, a move that would have directly impacted GTI operations. The bill also included a provision that would allow current Illinois dispensary owners – none of whom had any diverse or social equity ownership – to relocate.
According to board members at the time, CBIA voted 11-1 to support the bill, with GTI being the sole dissenter.
Asked for comment, GTI did not respond by publication.
“Last spring CBAI did support the state’s legislation,” said CBAI executive director Pamela Althoff last Friday. “There was a known understanding that GTI did not support all elements of the legislation. When there was a vote taken, they stated their dissent, and CBAI made it clear to legislators that the association, not all members, supported the legislation.”
“The next day they engaged lobbyists with 30-day contracts, and [they told everyone] relocation was bad for social equity,” said one CBAI board member speaking anonymously. Largely as a result of GTI’s lobbying efforts the 2020 cannabis bill’s forward movement came to a halt, as Black Caucus members were convinced that relocation harmed social equity, despite calls from Black-oriented advocates like ChicagoNORML, who wrote a letter to Caucus members calling GTI’s opposition “a red herring”.
“We need to have the licenses awarded as soon as possible,” wrote ChicagoNORML last May. “The relocation clause of this bill does not hurt us. Waiting hurts us.”
GTI benefits a great deal by limiting the number of dispensaries in Illinois. Until March 2021, Illinois had less than 100 dispensaries, grossing $1.03 billion during 2020. GTI owns ten dispensaries in Illinois, including one that grosses more than 8.5 times than the average Illinois dispensary sales, according to early 2020 BioTrack data acquired by Grown In. Even if GTI’s ten Illinois dispensaries were doing average sales, it would add up to one fifth of GTI’s reported $553 million in 2020 revenue. Since last June, when the Illinois cannabis bill died, GTI’s stock value has increased by 278%.
GTI’s calls for CBAI to increase its focus on social equity and diversity rings hollow for activists.
“It’s funny that now they say they want to focus on diversity and equity in the industry,” said Peter Contos of the Cannabis Equity Illinois Coalition. “To me they’re the ones who want to stop it. It’s very interesting this is the reason they want to leave CBAI.”
Contos pointed out that last month GTI parted ways with its director of corporate and social responsibility, Michael Fields, after only less than a year in his position. Also, earlier this year, as part of a purging of Illinois retail managers, GTI also let go its senior Black manager Derrick Levy, a veteran cannabis manager with almost a decade of experience in the Colorado market.
Before Fields came on to GTI, say multiple social equity advocates, the company had trouble creating a good working environment for diversity, and was not considered trustworthy.
“I don’t think they gave him enough time to do the work that was needed,” said Doug Kelly, executive director of the Cannabis Equity Illinois Coalition. “He was in crisis mode all the time. Fighting a stigma they were already facing. He was already facing a difficult situation, but they didn’t give him enough time.”
For a company that lacks any Black or Latino faces in its leadership, Fields is sanguine about his parting with GTI.
“There’s no bad blood between me and the organization,” he told Grown In. “It’s an approach where the endgames don’t match up. If you can’t meet the minds, then there’s no reason to have a relationship that doesn’t work for both parties.”
