The Illinois Department of Financial and Professional Regulation (IDFPR) announced the results of the state’s social equity license lottery, with 55 winners being awarded a conditional recreational cannabis dispensary out of 589 applicants.
The Social Equity Justice Involved License was one of three lotteries held by the state. The second lottery was for qualifying applicants who scored at least 85 percent on their applications. The third lottery will be held August 19 and will be for the highest scoring, tied applicants for the original 75 cannabis dispensary licenses.
To qualify for the social equity license lottery, applicants must have majority ownership by a person who has lived five of the last 10 years in an area affected by the War on Drugs, someone who has a prior cannabis-related arrest or conviction or a family member of someone affected by the War on Drugs. Applicants were also required to score at least 85 percent on their license application. Qualified social equity applicants are eligible to receive additional points on their applications as well as access to financial resources and other training programs.
“Today’s Social Equity Justice Involved Lottery marks a paramount accomplishment for Illinois’ cannabis industry, making it more inclusive for applicants from diverse backgrounds,” Mario Treto, Jr., Acting Secretary of the IDFPR, said. “The announcement of today’s lottery selections is a milestone on Illinois’s path as a national leader in the advancement of cannabis equity and I look forward to taking the next steps together for the future of the cannabis industry in Illinois.”
Although applicants have waited over one year for their licenses, the delay has caused some would-be dispensary owners to have lost investors or talent that would help with a successful business launch. Some license winners have explored the option of transferring their license to other business owners.
Former Illinois state senator Ricky Hendon, who won a dispensary license, acknowledged he and other companies are listening to offers to sell their licenses to better-financed operations who are more prepared to open a business sooner.
“Of course some of the smaller companies are listening to all kinds of offers,” Hendon said. “I’m listening to all kinds of offers.”
Hendon said he believes a license could fetch anywhere between $3 million and $15 million, depending on which region the buyer would be able to set up their business. An industry source, however, estimated a cannabis dispensary license is worth less, and could go for $1 million to $3 million. The source said each of the 40 new craft cultivation licenses are worth somewhere between $4-$5 million.
State regulations prohibit the transfer of craft cultivator licenses until after December 21, but other licenses are free of similar restrictions. Critics argue the transfer of social equity licenses goes against the spirit of the program, which was put in place to encourage minority ownership in the industry.
“I’m not upset for people who want to get a payday,” Edie Moore, the executive director of the Chicago chapter of the National Organization for the Reform of Marijuana Laws, said. “But I thought that they had got into this business to be in this business, not to just make a quick buck.”
Some prospective cannabis businesses have filed lawsuits against the state regarding the issuing of licenses. One lawsuit, filed by Sozo Illinois, claims it has been excluded from the social equity program because of new rules that give priority to social equity applicants who qualified under the “ownership method” while excluding those who qualified under the “employee method.” Another lawsuit against the state by three applicants claims they were wrongfully excluded from the lottery even though they plan to employ most of their workforce from disproportionately affected areas.
