Hundreds of Illinois cannabis license holders will hold their breath once more on Tuesday, as a thirteen-month old lawsuit over the award of 185 dispensary license applications goes to court one more time. Originally one case, but now split into two complaints, WAH Group LLC v. Illinois Department of Financial and Professional Regulation (IDFPR) and Haaayyy LLC v IDFPR, will meet in court to hear whether Judge Moshe Jacobius will grant motions to dismiss by the state.
In a pair of motions to dismiss, attorneys for the State of Illinois push aside any possible merits of the two complaints, as well as the fact that they’ve been in court since Fall 2020, and instead argue that these two amended complaints, filed on September 22, should be dismissed because another case filed on September 3 was certified by the State Supreme Court as the main case regarding problems with the lottery, and thus that one has precedence.
[Read Memo on Motion to Dismiss WAH case – Memo on Motion to Dismiss Haaayy case]
That other case, High Haven Dispensary v. IDFPR, has become a “supercase” concerning all complaints regarding the lottery process. High Haven’s complaint says the state did not provide explanation during the discrepancy notice phase of problems application evaluators had with the owner’s social equity status. High Haven, which believes it could have corrected its 23 applications if it had received an explanation, has moved the court bar the state from awarding licenses until its complaint is addressed by the court, and that as relief the court should conduct a “corrective lottery” to award new licenses. So far three other license applicants have intervened in the case with similar complaints as High Haven.
[Read High Haven’s Amended Complaint – Read High Haven’s Motion To Stay]
These cases are now moving through what is known as the Administrative Law Review, where final decisions made by state administrators, in this case Illinois regulators’ decision to award licenses as a result of lotteries, can be appealed to a judge. Attorneys for the state have long argued that all cases regarding the dispensary license lotteries should move through Administrative Law Review.
However, the WAH and Haaayy complaints have counter argued that moving through the Administrative Law Review does not make sense, since once licenses have been awarded in the lottery, and there is a limited number of licenses, that deprives one group or another of licenses, and thus the case should be decided before the lotteries are completed. Based on this argument, on July 28, Judge Jacobius issued an order allowing the lotteries to go forward, but barring Illinois from transferring the licenses to lottery winners.
In those months, pressure has mounted, as license holders have become anxious to start business and the total estimated value of the 185 pending licenses has zoomed well above half a billion dollars. On September 3, Illinois’ top cannabis policymaker, Toi Hutchinson, conducted an unusual press conference where she reiterated multiple times that regulators have authority to award up to 500 licenses at any one time.
Thus, the state’s message to Judge Jacobius: Release the 185 lottery licenses, and we can figure out in court later if anyone else deserves an extra license. We have plenty to go around.
As Judge Jacobius convenes court on WAH Group and Haaayy v. IDFPR one more time, there are multiple issues to be resolved:
- The status of the 185 dispensary licenses awarded through lotteries. Will the judge release his stay on transferring those licenses to the winners?
- The complaint charging that the application process unconstitutionally awarded extra points to veteran-led teams. Will the judge issue an injunction against lotteries, requiring a “re-do”?
- Whether or not the complaints should be dismissed and instead combined with the Administrative Law Review “supercase”, High Haven v. IDFPR.
If there’s one to be sure of in this case, it’s that whatever the outcome, it will be unpredictable.
