Illinois Announces Another Round for Dispensary Licenses, Are More Lawsuits Likely to Follow?

Dec 22, 2022

By: David Standa, Esq.

In a process that was delayed due to regulatory missteps, the Illinois Department of Financial and Professional Responsibility (IDFPR) has finally announced its process for issuing the 55 additional Social Equity Criteria licenses that were announced nearly 10 months ago. When initially announced, Governor Pritzker’s administration claimed that these licenses would be issued in 2022. That clearly didn’t happen, and now the Governor and the IDFPR anticipate these licenses being rolled out in 2023. If all goes according to plan – and let’s be honest, it never goes according to plan in Illinois – the licenses will be issued sometime in the first quarter of 2023.

Yet, a cursory review of the new rules and lottery process shows just how easily this process could be derailed and delayed. Indeed, the IDFPR’s own press release cautions about such occurrences. Despite touting the simplified application process and streamlined lottery, the press release states, “[a]fter a period for applicants to contest the list of lottery participants, IDFPR may publish an updated list based on any necessary corrections and contestations.” Recognizing the struggles it had in implementing the original dispensary application process, the IDFPR has pre-emptively warned applicants that there will be a “period” during which applicants that are not selected for the lottery will have the opportunity to challenge the decision and point out any errors that may have occurred. How long that period may last is anyone’s guess, but if past is prologue, it would not be shocking if these licenses remain unissued into the summer or beyond.

For now, while everyone is in a non-litigious, holiday mood, the plan is for the licenses to be issued via lottery, with a simplified application process that has a two-week application window starting early next year. The 55 licenses will be distributed across the state’s 17 Bureau of Labor Statistics (BLS) Regions, according to this map, with the majority of the licenses being issued for the Chicagoland area. The IDFPR will begin accepting applications for 55 conditional cannabis dispensary licenses on Monday, January 30, 2023, and anticipates a two-week application window lasting through Tuesday, February 14, 2023. All applications are to be submitted through the IDFPR’s online portal and must be accompanied by a $250 application fee. Once the lottery is conducted and applicants are selected, the rubber will really meet the road. Selected applicants will have 45 calendar days to prove certain social equity eligibility criteria, including establishing that they are 51%-or more owned-or-controlled by one or more individuals who each meet the combination of the required criteria set out in the new rules. That criteria is broken into two sections, and winning applicants will need to prove that they are 51% owned-and-controlled by individuals satisfying both criteria. Criteria ‘A’ requires proof of residency for 5 of the preceding 10 years in one of the census tracts identified by the IDFPR, and Criteria ‘B’ requires being arrested for, convicted of, or adjudicated delinquent for (or having a family member who has been arrested for, convicted of, or adjudicated delinquent for) certain cannabis-related offenses or being a victim of a firearm injury. The criteria specifics are detailed here. Note that individuals cannot “stuff the box.” The rules require that, during the license lottery process, principal officers cannot be included on more than one lottery entry and applicants cannot have more than one lottery entry across all 17 regions.

The IDFPR has released this mock application, as well as this guide, to documents that will be acceptable to prove social equity status. These are good starting points for applicants looking to get prepared for next year’s application process.

As always, we will continue to monitor the application process in Illinois, so if you are considering applying, please contact us for assistance. You can contact the author at [email protected].

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Illinois Announces Another Round for Dispensary Licenses, Are More Lawsuits Likely to Follow?

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