Illinois to issue long-awaited pot shop licenses

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The state says it will begin issuing the 185 new licenses starting next month with licenses in the Chicago region. It will begin background checks starting next week, as well as verification that license winners meet other regulatory requirements.

“Today marks the beginning of the next chapter of the most equitable adult-use cannabis program in the country,” Gov. J.B. Pritzker said in a statement.

The state said it also will begin issuing low-interest loans designed to help new applicants enter the industry. Because cannabis is federally illegal, dispensary owners aren’t able to get traditional bank loans.

Similar cases, including one filed by one of the plaintiffs in this case, Mark Toigo, succeeded in Missouri and elsewhere. Pallmeyer didn’t disagree with their arguments that Illinois rules violate the federal law involving interstate commerce, but she was unwilling to roll a grenade under the door so late in the process of issuing licenses.

The state had intended to issue new licenses for pot shops in May 2020. It finally held lotteries to issue those licenses more than a year later. Lawsuits have kept the licenses in limbo since then.

The plaintiffs asked Pallmeyer to issue an injunction preventing the state from issuing those licenses.

A key factor in her decision was that neither person who filed suit had actually applied for a license, and there was no way to know whether they would qualify to receive one. Pallmeyer also questioned why they didn’t challenge the law until more than six months after the lotteries had been held.

“Plaintiffs . . . sat on the sidelines from June 2019, when the Cannabis Act was enacted, until March 2022, several months into the state court litigation over the department’s final administrative decision. Now they beg for the mere opportunity to compete for a dispensary license, all while casually dismissing the immediate harms that an injunction would cause to applicants who have been working hard to secure (and are now on the cusp of securing) the exact same thing,” Pallmeyer wrote.

"The upshot is that the court has been invited to freeze the ongoing licensing process based on mere speculation that doing so might allow these two plaintiffs, about whom the court knows little, to obtain a seat in a highly competitive lottery," the judge wrote.

Legal challenges to the application process are working their way through state courts as well, and Pallmeyer was reluctant to inject the federal courts into the situation.

“The court . . . agrees that concern for the interplay between the state and federal cases counsels against the disruptive relief that plaintiffs have requested,” she wrote. “It is clear that prohibiting the enforcement of the residency-related criteria would eviscerate the results of the three lotteries and frustrate the state court’s ongoing efforts to order corrective lotteries.”

via Crain’s Chicago Business

June 10, 2022 at 06:11PM

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