The National Cannabis Industry Association’s Diversity, Equity & Inclusion Committee (DEIC) in late November sent a letter to government officials and regulators in Illinois with analyses and recommendations for improving the state’s social equity licensing program.
When Illinois became the first state to regulate cannabis through its legislature and include a statewide social equity program for the cannabis industry, advocates were hopeful that the state would become a model for improved representation. After the initial results of the first social equity dispensary application period were announced, however, the program received backlash over lack of transparency, failures in the selection process that favor heavily funded multi-state operators, the extremely limited number of companies that were selected for the final lottery and the ultimate lack of representation achieved.
“To address disparities in the initial results of the process, we believe we must first acknowledge the process was flawed and that the results do not reflect the intent of lawmakers,” the letter read. “While well-meaning and intentioned, the results have been widely criticized in their limited ability to be inclusive and to truly generate opportunities for restorative justice and economic empowerment for people most harmed by prohibition.”
The letter contained a number of critiques about the program and suggested several ways to improve the system and ensure legislative intent, including but not limited to: complete transparency of the scoring system, methodology and actions used by the government’s outside contractor, KPMG, in the application process; closer scrutiny of operating agreements to avoid predatory partnerships; and changing the grading rubric to avoid allowing only applicants with perfect scores to be eligible.
Governor J.B. Pritzker has directed the Illinois Department of Financial and Professional Regulation to reexamine the application process, hear appeals and rescore applicants before allowing licensing to proceed. In early November, an Illinois court rejected a request for a restraining order filed by the initial finalists to prevent rescoring the other applications.
Following the court decision, Pritzker announced a plan to send a second round of deficiency notices to applicants to allow them to have applications rescored. The awarding of the 75 available licenses has been postponed indefinitely to complete the process.