Illinois Judge Lifts Injunction on Issuing Cannabis Dispensary Licenses

An Illinois judge last week lifted an injunction that barred the state from issuing licenses for recreational pot retailers after a delay that claimed the better part of a year. The ruling from Cook County Circuit Judge Michael Mullen potentially clears the way for state regulators to issue 185 licenses for adult-use cannabis dispensaries, although further legal action could put the process on hold again.

Mullen ordered the stay on issuing new licenses for recreational dispensaries last year after lawsuits against the process were filed by applicants who alleged that they were unfairly excluded from lotteries to award the permits. State cannabis regulators have since authorized a new lottery process to give the plaintiffs another chance to win a license.

Mullen lifted the stay on Friday, clearing the way for the Illinois Department of Financial and Professional Regulation (IDFPR) to award the 185 conditional adult-use cannabis dispensary licenses held up by the order to applicants selected in three lotteries that were held in 2021. In a statement released by the agency after the ruling, the IDFPR said that it would release detailed information on the next steps applicants must take after receiving guidance in a related case in federal court.

“Today is a key development toward our ultimate goal of creating the most diverse, inclusive, and robust adult use cannabis industry of any state in the country,” IDFPR secretary Mario Treto Jr. said in a statement from the agency. “We stand ready to swiftly move forward in ensuring Illinois’ standing as a national leader in the advancement of cannabis equity.”

Creating an Equitable Cannabis Industry in Illinois

Black and Latino entrepreneurs had argued that the state’s process for issuing adult-use cannabis licenses has failed to produce a regulated weed industry that reflects Illinois’ diversity. Under state law, the first 75 dispensary licenses were supposed to be awarded two years ago. But problems with scoring the applications resulted in only 21 applicants out of 700 qualifying to participate in a lottery to award the licenses.

Mullen lifted the stay after one of the plaintiffs in the litigation, WAH Group LLC, asked the court to end the ban on issuing new licenses. The company has won the rights to three licenses, making lifting the ban advantageous to the plaintiff.

Ryan Holz, an attorney who represents other businesses that have also won licenses and some applicants who were excluded from lotteries, praised the judge’s decision to lift the stay.

“People are super excited to move forward,” Holz told the Chicago Tribune.

But he warned that additional businesses left out of previous lotteries may ask for a new injunction. And in its request to the court, WAH Group noted that Cook County Judge Celia Gamrath has said that a separate cannabis business licensing case could take months or years of litigation to resolve.

In March, Illinois Governor J.B. Pritzker announced that the IDFPR would be enacting new rules to simplify the dispensary application process and remove barriers for social equity applicants. Noting that the agency is required to issue another 50 recreational weed dispensary licenses by the end of the year, the governor’s office said that the “Pritzker Administration is committed to ensuring the new legal cannabis industry reflects the diversity of the state.”

“From day one, Illinois has been dedicated to leading the nation in an equity-centric approach to legalizing cannabis, and these proposed changes to the application process will make it much easier for social equity applicants to pursue licenses,” Pritzker said at the time. “I appreciate all the feedback we have received from stakeholders since the start of the cannabis program, whose work informed this proposal and is continuing to make Illinois’ growing cannabis industry the most equitable in the nation.”

The IDFPR noted in its statement last week that the department is working to finalize plans for three corrective lotteries to award cannabis business licenses, one for each of the lotteries held in 2021, that are scheduled for next month. Details on those lotteries will be released on the agency’s website once plans are finalized.