Business

Illinois To Allow Application Do-overs; Some Argue It’s Not Enough

By Willis Jacobson
Sep 23, 2020

Illinois officials hit pause on the state’s cannabis retail license lottery to address some of the issues raised in recent lawsuits about the process. At least some of the litigants feel the move isn’t enough.

Gov. J.B. Pritzker announced Monday that candidates who didn’t receive perfect scores on their applications will now be able to revise those submissions and file again. That decision was made after the licensing process was widely panned for shutting out minority applicants, even though the process was purportedly designed to aid them.

While some applicants welcomed the news, others said the state’s plans still fall short.

Irina Dashevsky, an attorney with Locke Lord, which is representing multiple unsuccessful applicants in a lawsuit against the Illinois Department of Financial and Professional Regulation, said the state has still not yet addressed a major complaint raised by the litigants: The veteran stipulation in the application scoring process.

Under the state’s scoring system, applications with military veterans listed among their ownership are given an extra five points. The importance of those five points became apparent this month when the state announced that only 21 applicants had achieved perfect scores and advanced to the statewide lottery for the next 75 licenses. 

All 21 of those finalists had at least one veteran owner. More than 900 applications had been filed.

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“[The pause] doesn’t change anything that we were going to do, other than some of the issues that we could have been fighting about have been addressed,” Dashevsky of the state’s latest moves. “But, fundamentally, we’re still at an impasse with respect to the veteran issue.”

Because of the veteran bonus, some applicants are able to achieve a “perfect” application score of 252. Other non-veteran applicants who submit otherwise perfect applications will be capped at either 245 or 247 points, dependent upon other factors.

“So you still have two very distinct groups,” Dashevsky said. “One group will participate in the lotto, which is the 252 group, and the other group currently still cannot because they haven’t allowed the non-veterans to change their structures to become veteran-owned. So, they’re still precluded from getting those five points, and therefore precluded from the lottery. That part of our lawsuit remains extremely relevant.”

That specific concern wasn’t addressed by Gov. Pritzer, who said this week’s moves were a direct result of the public outcry.

“When we heard significant concerns from numerous stakeholders about the process to award dispensary licenses, I said we needed to take a pause to fix their concerns, within the bounds of our landmark law,” he said. “We believe that these new steps will inject more equity and fairness in the first round of license awards and provide insight as we improve the process for future rounds.”

Illinois began allowing REC this year, and sales over the first six months surpassed $239M, according to Pritzker’s office. That equates to about $53M in state tax revenue over that same period.

‘Fair shot’

A day after Illinois regulators announced they were pausing the lottery and would allow application amendments, a separate federal lawsuit filed against the Illinois Department of Financial and Professional Regulation was dropped. 

That suit, filed on behalf of at least 70 plaintiffs, also took issue with the application scoring process.

The litigants were veterans, according to multiple reports. They reportedly dropped the suit because the state remedied their complaints by allowing unsuccessful applicants to change and resubmit their paperwork.

While the moves announced Monday did not specifically address the veteran stipulation, the state has confirmed that applicants will not be allowed to add veteran owners as an amendment to try to get those five extra points.

Marquita Hollins, a 36-year-old Army veteran, owns Heartland Greens, one of the litigants in the federal suit that was dropped this week. Hollins told the Chicago Tribune that she felt the second chance opportunity offered by the state was a “great thing.”

“Hopefully we’ll get a fair shot of being in the lottery,” Hollins said.

Dashevsky said she could appreciate that perspective – she acknowledged that the state seems to be listening to applicants’ concerns – but she said the veteran stipulation needed to be addressed as a priority.

“No disrespect to any veterans or what they’ve done, but a group that makes up 6% of Illinois’s population shouldn’t be able to monopolize this industry,” Dashevsky said.

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