Springfield, IL – Several lawmakers from the Black and Latino caucuses feel blindsided by the lottery process for recreational cannabis licenses. Over 700 groups applied, but now only 21 finalists are left vying for 75 dispensary licenses.
“Out of 4,500 applications, what in our scoring process made us only dwindle down 75 applications for only 21 applicants? That is just beyond me,” said Rep. Sonya Harper (D-Chicago).
Harper chairs the House Economic Opportunity and Equity Committee. She explained most social equity applicants don’t have the ability to submit dozens of applications in every region. The governor’s top adviser for cannabis agrees something has to change there.
“We need to put a limit on how many you can apply for at one time so that you can’t have really heavy money interests apply for way more than your regular folks can apply for,” Toi Hutchinson said.
Each application costs $2,500. That’s already a tough bill for those trying to start a business in low-income communities. The Legislative Black Caucus asked Pritzker to suspend the lottery process until there is transparency on how and why these groups were selected over others.
They’re also curious to find out why the state granted accounting firm KPMG a no-bid contract to review the applications. Members found an ethical issue with a KPMG employee being named on three of the license applications moving forward in the lottery.
“KPMG was given millions of dollars to do this application process, and we don’t feel it was done right. Plus, they’re giving themselves dispensary licenses,” Harper emphasized. “I think a magnifying glass is definitely needed on this situation.”
Diversity in the industry
Gov. JB Pritzker notes all of the 21 finalists are social equity applicants.
“Two-thirds of the applicants were 51% owned by those who come from disproportionately impacted areas,” Pritzker explained. “62% of the owners are controlled by people of color.”
The governor noted 20% of the finalists were arrested or convicted of a crime expunged by the state’s cannabis law. In addition, 10% of the finalists include children or dependents of individuals arrested for marijuana possession in the past.
Another issue found within this process is the majority of those left in the lottery are groups based in Chicago. Harper notes Peoria, Champaign, and East St. Louis should also get a fair opportunity.
“If we really care about making those social equity applicants in those communities part of this market, then there is something truly wrong with our scoring system that needs to be changed so that we elicit those types of results in our scoring,” Harper added.
The Pritzker administration says ensuring equity in this industry is a marathon, not a sprint. Harper explained the caucus isn’t fingerpointing or blaming the governor, as they just want to have more transparency in the selection process.
“Eighty years of failed drug policy is going to be really difficult to do in one bill. But how far we’ve come in nine months – we’ve expunged 10,000 criminal records,” Hutchinson explained. “The sales of this have been through the roof in the middle of a global pandemic which is targeted to those very same communities that are disproportionately impacted. Then, we finally get to this lottery round – this place in time – where we’ll see if we diversify the actual industry itself.”