Weed License Lottery Dates Set As Governor Signs New Cannabis Law

CHICAGO — Gov. J.B. Pritzker cleared the way for expansion of retail cannabis in Illinois Thursday by signing a bill aimed at kick-starting the state's marijuana licensing scheme and diversifying ownership of the lucrative new industry.

The new law, House Bill 1443, creates two new lotteries for recreational marijuana dispensary licenses, in addition to an already authorized lottery that has been delayed for nearly a year. With the governor's signature, Illinois law now allows for more than 300 dispensaries, including the state's 110 existing pot shops.

The Illinois State Lottery will conduct three lotteries over the next five weeks, Pritzker's office announced. On July 29, a lottery will award 55 licenses to those who received at least 85 percent of the maximum score.

Another 55 licenses will be awarded to qualifying "social equity justice-involved applicants" in an Aug. 5 lottery. The final lottery, set for Aug. 19, will award 75 licenses to the applicants who received perfect scores in last year's process — something that could only be achieved by veteran-owned businesses under the old law.

Toi Hutchinson, the governor's top pot adviser and a co-sponsor of legalization in the state senate, said in a statement that other states that have legalized recreational marijuana have ended up with an industry dominated by a handful of people and businesses that "lack diversity."

So far, Illinois is no different. About a half-dozen cannabis corporations — known as multi-state operators, or MSO's — control the vast majority of cultivation and dispensary licenses.

"What we're attempting to accomplish is hard to do and takes time to accomplish, but we have an obligation to ensure that it gets as strong a start as possible," Hutchinson said. "These upcoming dispensary license lotteries are a result of the administration's continued commitment to working hand in hand with the General Assembly, community groups, and other stakeholders, to put equity first as we take these initial steps in building an inclusive industry."

Ever since the possession and retail sale of cannabis was legalized for those over 21 in Illinois, the only licensed pot shops were connected to the original 55 medical marijuana licenses approved as part of the medical pilot program under former Gov. Bruce Rauner.

Although the Cannabis Regulation and Tax Act, which legalized marijuana in Illinois, called for state regulators to issue hundreds more licenses — not just for dispensaries but for craft growers, infusers and transporters as well — the Pritzker administration has yet to issue any new licenses.

The governor issued executive orders amid the pandemic last year to delay the process and subsequent ongoing legal challenges to the application process have provided additional uncertainty.

One of those challenges, filed last year in Cook County by a group of five applicants, asks a judge to block the 75-license lottery, currently scheduled for Aug. 19, on the basis that it unconstitutionally gives preference to applicants who are military veterans. A hearing in that case is set for July 26.

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The governor's office also announced Thursday that the Department of Agriculture had, for the first time, issued notifications to people who applied last year for other kinds of cannabis-related licenses.

Businesses eligible for one of 40 craft grow licenses, 32 infuser licenses and 141 transporter licenses must now confirm they are still interested in paying the fee and getting the license. Craft grower and infuser applicants have 10 days to confirm they are interested. Transporters have until February, according to the governor's office.

Of the 80 percent of applicants who opted to self-report demographic data to the state, about one in three identified as white. According to the governor's office, 98 of the businesses reported that they were Black-owned.

"About 67 percent of those are going to people of color, so there will be people getting into business in the cannabis industry nearly right away, and I'm very pleased about that," Pritzker told reporters Thursday at an unrelated news conference.

"But we have those three lotteries that are coming up, and, as far as I'm concerned, we want to make sure that they go as smoothly as possible," Pritzker said. "So we've been working every day since this bill was passed, really, to try to set up the proper lottery, so we get the results that we're all expecting."

The Department of Commerce and Economic Opportunity announced a new lending program to provide capital to social equity licenses. The department's Social Equity Cannabis Loan Program could loan up to $34 million in the first year in partnership with Good Tree Capital and Credit Union 1, who will provide low-interest loans of up to $1 million for cultivators, $500,000 for dispensaries and infusers and $100,000 for transporters.

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State Rep. LaShawn Ford (D-Chicago) was the chief sponsor of HB 1443. In a statement, he described its passage as a collaborative effort to respond to concerns about the state's cannabis law and applauded Pritzker for signing it.

"I am grateful to social equity applicants for their willingness to work to help fix the law to help achieve the intent of Illinois' cannabis law," Ford said. "I hope that equity in the cannabis industry is a reality soon in Illinois. We are all anxiously awaiting a new, diverse industry that includes people that have been locked up for cannabis-related issues and who have been locked out of a billion-dollar emerging industry."

While the scheduled lotteries will be based up the scores of applications from last year, Ford's bill also establishes a framework for an additional lottery for social equity applicants to have access to the five medical dispensary licenses authorized under the medical pilot plan but never issued. Each would allow for two dispensaries, bringing to the state's maximum number of permitted dispensaries to 305.

In addition to the new dispensary applicant lotteries, HB 1443 allows medical cannabis cardholders to buy weed at any dispensary, rather than having to register at a specific location.

It also allows dispensaries the opportunity to relocate and permits dispensaries owned by social equity applicant from setting up shop within 1,500 feet of dispensaries connected to licenses issued prior to legalization.