Last January over 700 groups filed 4,000 applications for 75 Illinois cannabis dispensary licenses. Today state cannabis regulators announced that of those applicants, only twenty-one groups won the right to enter the tiebreaker phase, and of that twenty-one, there are many overlapping relationships and owners. The fact that there are fewer tiebreakers than possible licenses, and that most tiebreakers have multiple entries, suggest that almost every applicant that made it to the tiebreaker stage is guaranteed at least one license – if not more.
The tiebreaking application winners are a small, often connected group. For instance, it appears that one attorney represented three application groups, and one LLC group is the registered manager of two winning application groups.
In a written statement, Toi Hutchinson, Senior Advisor to the Governor on Cannabis Control, lauded the list of tiebreaker applicants. “We are extremely gratified that every license in this first round will go to a social equity applicant. Illinois is the first and only state in the nation to reach this equity milestone.”
That same written statement announced that the tiebreaker would be conducted in “late September”, but a state spokesman did not have details on specifically when, where, using what mechanism, and if the tiebreaker could be observed by the public
A close examination of the applicants that made it to the tiebreaking phase, (a complete list assembled by Grown In with the agents and managers for each winner is available here. The official list is here.) calls Hutchinson’s claim of social equity into question, since so many winners are affiliated with existing major cannabis companies or well-known business leaders.
Asked for more detail, a state spokesperson said that “Of the 21 applicants, 13 are majority owned and controlled by people of color and 17 have at least one owner who is a person of color.” In addition, the spokesperson cited that, “14 of the 21 applicants qualify as Social Equity Applicants because they have [at] least 51% ownership and [are] control[ed] by one or more individuals who have resided for at least 5 of the preceding 10 years in a Disproportionately Impacted Area.”
Asked for comment Thursday night, many cannabis company leaders and applicants refused to speak on the record, as they assessed their options. “One of the interesting things to me are the names that I don’t see,” said one attorney, Mark Peysakhovich, who represents multiple applicant groups. “I’ve already had two dissatisfied applicants tell me they are filing lawsuits.”
Scott Redman, a member of one applicant group said, “There were going to be a lot of disappointed people to begin with, but now [it’s worse] because of the concentration. It was always going to be the case, because you could put in for ten licenses. That was going to be a problem to begin with.”
The details of the tiebreaker applicants are often not what you would expect from a social equity applicant. For instance, one of the members of the EHR Holdings tiebreaker application group is former Chicago Police superintendent Terry Hillard, who is not a stranger to cannabis dispensary applications. In 2015, many Illinois medical cannabis dispensary license applicants listed Hillard’s firm, Hilliard Heintze, as the security consultant for their applications. Hilliard is Black and his home address is in a Disproportionately Impacted Area, but as a former Chicago Police superintendent, he may not fit the social equity mold many proponents of the social equity program imagined.
Phil Stephani, owner of Gold Coast restaurant Tavern on Rush, is also part of a winning group, GRI Holdings. Stephani’s win today is a special form of irony, since just last week he testified before the Chicago Zoning Board of Appeals against PharmaCann’s unsuccessful bid for site a dispensary near Stephani’s Tavern on Rush.
Another winning group, 127 IL LLC, is backed by Nicole Van Rensburg, the one-time owner of Midwest Cannabis, a 2015 medical license winner. Rensburg, a Florida resident, sold her license to PharmaCann and is now CEO of Boca Raton-based Bloom Medicinals, which operates dispensaries in multiple states.
Tiebreaker applicant AmeriCanna Dream LLC is led by Adam Safro, a managing director of New Era Capital, a real estate investment group led by Sammy Dorf, president of Verano Holdings.
Two application groups, Clean Slate OpCo LLC and Dealership LLC, which combined have 38 tiebreaker applications, have the same manager, Clean Slate Holdings LLC, a company that is not listed under the Illinois Secretary of State’s list of registered companies.
Another pair of applicants have even closer ties. Applicant Fortunate Son, LLC, is backed by Jeff Rehberger, president of Lucky Lincoln Gaming, an Illinois terminal operator company. Sam Fakhouri is a business development manager for Lucky Lincoln Gaming, and spoke forcefully at a January community meeting against Cresco Labs’ proposed River North Chicago dispensary. Sam Fakhouri is also the owner of the building where MoCa Modern Cannabis sited a new River North dispensary.
Omar Fakhouri, the brother of Sam, is the backer of tiebreaker applicant Mint IL LLC. Omar Fakhouri is also the owner of Michigan’s SkyMint, which owns and operates a dozen cannabis dispensaries in the Mitten.
Ahmad Joudeh, leader of the tiebreaker applicant SB IL LLC, is the one-time owner of Starbuds, a group of 14 cannabis dispensaries in Colorado, recently sold to Schwazze.
Chicago NORML leader Edie Moore is also part of two tiebreaker applicant groups, Make Peace LLC and Terra House LLC. For the second group, Moore partnered with Chicago’s 47th Ward Democratic Committeeman and statehouse lobbyist Paul Rosenfeld.
Asked for a comment Thursday night, Moore told Grown In, “I’m pleased for myself, but I’m playing the momma bird and want to make sure everybody else is OK. My husband and I are on the same team, He’s doing the happy dances for our team while I’m trying to work on behalf of Chicago NORML members and all the social equity applicants.”
Ed. Note: The original version of this article stated that Clean Slate OpCo LLC and Dealership LLC are represented by Robert Cosentino. That is incorrect, and we apologize for the error.
