Illinois governor delays awarding new cannabis licenses amid questions about fairness

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At nearly $64 million, the 67 legal pot stores in Illinois sold $3 million more than the month before, and it could still be weeks and months before they face additional competition.

Gov. J.B. Pritzker highlighted his administration’s effort to allow applicants for the next round of licenses to correct deficiencies on Tuesday in Chicago

“There’s obviously a delay as we try to expand and allow people to address deficiencies or points they weren’t awarded in the original process to make sure that they have as many people in that final lottery as deserve to be there,” Pritzker said.

Pritzker hopes to get through the next round by this fall.

“We’re very supportive of the governor’s acknowledgment and recognition that we need to take a step back and reevaluate the scoring process and allow applicants another opportunity to correct their deficiencies,” said Illinois cannabis business association CannaBiz Executive Director Pam Althoff said separately.

The first round of dispensaries to sell Illinois-grown cannabis for consumption was through the medical program that was approved years ago. Those dispensaries across the state were among the first to be able to sell cannabis to adults for recreational use beginning New Year’s Day 2020.

Since the beginning of the year, there are now 67 dispensaries. In the coming years, there’ll be around 300 additional cannabis licenses issued for no more than 500.

The governor’s senior advisor for cannabis control Toi Hutchinson said after the next round of 75 licenses being awarded to applicants to meet certain criteria like being impacted negatively by the war on drugs or being from such an area, state law requires a disparity study about license equity.

“Based on the results of that study, additional measures will be proposed to further improve equity and inclusion in the market before the next 315 licenses are awarded,” Hutchinson said standing next to the governor.

Geoffrey Lawrence, the director of drug policy for the Reason Foundation, earlier this month said there’s a lot wrong with Illinois’ law.

“But equity is among them, primarily that’s because there’s such a cap on the number of licenses available,” Lawrence said.

He said to make things really equitable, caps should be lifted entirely.

“We don’t have a cap on the number of grocery stores or gas stations that are allowed, but the market kind of naturally reaches an equilibrium,” Lawrence said. “That’s true with pharmacies and drug stores and liquor stores.”

“This is a perfect example of why the state of Illinois should not follow that example,” Althoff said of the free-market approach. “The idea [of Illinois’ law] was to be able to make course corrections. Legislators passed the most equity-centric legislation. They wanted to make those course corrections where applicable. It was a conscientious decision not only by the administration, but by stakeholders.”

Since becoming legal for adult use in Illinois in January, the state has collected $86 million in cannabis taxes. That’s split several different ways with the bulk, 35 percent, going to the state’s general revenue fund. A quarter of every cannabis tax dollar goes to nonprofit community groups in specific regions of the state that were disproportionately affected by the war on drugs.

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