Legislators hope to add 2nd weed lottery

More weed-sales licenses would be issued to a wider pool of applicants under proposed changes to state marijuana regulations introduced in the Illinois legislature during the lame-duck session that ends Wednesday.

The aim is to fix several problems that emerged along the state’s journey into recreational marijuana that began about 18 months ago.

So far, only winners of the original medical marijuana licenses have been allowed to sell into the much bigger recreational market, which produced $669 million in sales in its first year, roughly twice the amount of medical pot sold.

The state planned to award 75 more dispensary licenses by May 1, with a goal of diversifying an overwhelmingly white and male cannabis industry by helping “social equity” applicants from neighborhoods hit hard by the war on drugs become owners.

But just 22 of more than 700 applicants achieved perfect scores and qualified for a lottery tiebreaker in an evaluation process now viewed as flawed. Both unsuccessful and successful candidates sued, and the lottery has yet to proceed.

Bills introduced by Sen. Cristina Castro, D-Elgin, and Rep. Jehan Gordon-Booth, D-Peoria, aim to thread the needle by authorizing a second lottery to award 75 additional licenses to unsuccessful applicants from the original round of 75.

The bills would widen the pool of potential winners. Castro’s version would allow applicants to qualify for a new lottery if they received 80 percent of the 250 points available. Gordon-Booth’s version would allow applicants with scores of 75 percent to qualify for the new lottery. Applicants will not be required to pay additional application costs.

The applicants who qualified for the current lottery received 100 percent of the available points. The original law gave a 20 percent bonus in the scoring process to applicants who met social-equity criteria, such as having lived in areas deemed to have been disproportionately impacted by the war on drugs or those who had been arrested or convicted of minor marijuana crimes. But it was a provision that extra credit for military service that proved to be deciding factor.

One of the biggest criticisms of the initial process was that just 22 groups qualified for 75 licenses, in part because the rules allowed applicants to apply for as many licenses as they wanted. (Licenses are distributed according to geographic areas corresponding to Bureau of Labor Statistics regions.)

The new rules won’t allow applicants to apply for more than one license per region, and no individual will be allowed to be a principal officer involved on more than two applications. Legislators are trying to balance the goal of giving qualified applicants the most opportunity to win a license without concentrating ownership.

MOVING LICENSES

Castro’s bill addresses other problems that have popped up, including a controversial provision to allow existing medical marijuana license holders to move dispensary sites to larger locations better suited to recreational sales.

The provision of the original marijuana law that grandfathered medical license holders into recreational sales, including allowing them to open an additional dispensary for each medical license they hold, was a sore spot viewed as extending the head start that companies owned by white men already have in the industry.

The Illinois Dept. of Financial & Professional Regulation, which oversees retail marijuana sales, took a literal interpretation of the law, ruling that existing medical dispensaries would only be allowed to conduct recreational sales at the locations that existed when statute was signed in June 2019.

Similar legislation introduced during last year’s pandemic-shortened regular session did not get called for a vote, amid opposition from the Legislative Black Caucus.

Other provisions in Castro’s bill would address a backlog of badging for new employees of retail dispensaries and cultivation centers, allowing employees to begin work while their applications are processed. The law also would require the state to publish the identities of those with at least 5 percent ownership of awarded licenses.

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