Avocados, Race, and Money: The Disorderly Illinois Weed Experiment

“Yes, there were challenges because we just put the jackhammer in the ground for the first time. And it’s loud and loud and hard, ”Toi Hutchinson, Democratic Governor. JB PritzkerSenior Cannabis Advisor, said in an interview. “You have to go through this until you get to what building a new economy and a new industry will look like. I never thought it would be a walk in the park.

Illinois takes a methodical approach to licensing to avoid the fate of most other state markets that have few minority-owned businesses. But there’s another twist: Some Illinois marijuana dispensary winners are already looking to sell their licenses – or a stake in them – to bigger companies.

Blacks are almost four times more likely than whites to be arrested for marijuana-related crimes nationwide, even though they have similar rates of use. States and cities across the country have tried to ensure that communities disproportionately affected by criminal penalties on marijuana are able to reap the financial benefits of legalization. But so far these efforts have largely failed, and the rapidly growing industry – sales topped $ 20 billion last year – continues to be dominated by white-owned businesses. Watching how Illinois resolves these licensing issues over the next few months will likely guide cannabis lawmakers and advocates to design similar programs elsewhere.

Legal battles are expected, said Hutchinson, who was one of the legislative architects of cannabis law when she sat in the State Senate. And Illinois, she added, is as focused on fixing the damage caused by the War on Drugs as it is on building a multibillion-dollar industry in the state. So far, Illinois has removed hundreds of thousands of arrest records related to marijuana and pardoned over 20,000 non-violent criminally convicted drug users under the social equity element of the law.

“We started from the premise that you cannot normalize and legalize an activity where banning the same activity has destroyed entire communities,” Hutchinson said.

How Illinois got here

Cannabis entrepreneurs are disheartened that almost two years after recreational marijuana was legalized in January 2020, they have yet to obtain licenses. Meanwhile, established medical cannabis companies – mostly white-owned – were allowed to expand their presence as new entrants lingered in a new process.

The delays are due in part to Covid-19 but also to stumbles in the scoring process of the first lotteries, which in turn has triggered lawsuits. The state has put everything on hold until lawmakers can change the law earlier this year and allow the process to move forward in ways they hope will lead to greater minority representation.

Illinois’ latest legal loophole emerged weeks ago after contestants in past lotteries for dispensary licenses said they were wrongly excluded from the process due to an administrative error. As a result, the state suspended the distribution of all licenses.

” It is very frustrating. We can’t move forward until the state fixes everything, ”said Rickey Hendon, former state senator and co-owner of a winning dispensary license.

So far, 185 conditional dispensary licenses have been provisionally awarded. In total, Illinois plans to distribute 500 licenses through a lottery process designed to benefit applicants from minority communities, women and veterans.

In addition to dispensary licenses, the Pritzker administration has issued 79 craft cultivation, brewing and transport licenses through the state Ministry of Agriculture. Of those winners, 83% qualified as social equity contenders and 67% identified themselves as non-white, according to Hutchinson’s office.

Charlie Bachtell, CEO of Chicago-based Cresco Labs and president of the National Cannabis Roundtable which advocates for legalization, keeps track of delays and stumbles over the “growing pains” of a new industry.

“When you do it for the first time, you will make mistakes and mistakes,” he said. “We’ve seen it in states that started with medical cannabis. These are lessons learned for future states trying to address social equity.

Cresco has a lot at stake with 10 dispensaries opened in Illinois. And while Bachtell acknowledges that Illinois licensing delay in licensing is “dampening growth,” he said he has a long-term view of what this means for the economy. state cannabis.

“There is a bigger benefit to the industry if Illinois does it successfully then my need to open more doors tomorrow,” he said. “I hope it will be as quick as they can get it, but I am realistic and I know it will take time.”

And after?

At least some lottery winners understand why the process is slow, although that doesn’t make the wait for a dispensary license any easier – or cheaper.

“I’m more comfortable with where the process is going,” said Akele Parnell, who is one of the provisional recipients of the dispensary and craft culture licenses. “But the longer we wait to fight on legal issues, the more we expect diversity in the industry.”

Parnell is an African-American lawyer who previously worked for cannabis company Green Thumb Industries before going on his own. His challenge now is to find funding, find a location, and find employees as the legal battles wind down so that the licenses can officially roll out. One case could be resolved next week, but there are still half a dozen more in court.

The Illinois Department of Financial and Professional Regulation is ready to issue conditional licenses now but is waiting for the courts to give the green light, according to Hutchinson’s office.

Not everyone could wait. Some interim licensees are already looking to sell controlling stakes in their cannabis companies to larger organizations, wondering if the industry will ever be as diverse as Illinois wants it to be.

Hendon is one of those looking for investors. “It was a two-year delay. People have rent and mortgages to pay and you still have to raise capital to get [a dispensary] of the ground. These are not people who are determined to make money.

It’s capitalism, said Hutchinson, Pritzker’s advisor, highlighting the way deals are done in the business world.

“A lot of blacks and browns weren’t on golf courses trying to figure out how to get into the cannabis industry,” she said. “Now you have a bunch of entrepreneurs who are in these spaces and they have every right to navigate as they see fit.”

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