The Illinois State Senate has given the push toward social equity in cannabis licensing another gentle nudge toward the goal of ensuring that a fair portion of licenses for grow operations, dispensaries, and other regulated cannabis businesses are earmarked for individuals who have endured the strongest negative impacts from marijuana prohibition.
Why Does a Not Yet Ratified Piece of Medical Cannabis Legislation Proposed in a Single American State Matter to the Nation at Large?
As in much of America, Black residents of Illinois and other people of color have been disproportionately penalized by decades of marijuana prohibition. Many Black and other minority cannabis users are serving multiple-year prison sentences, convicted of violating laws that no longer exist now that marijuana possession, cultivation and sale are all legal in their home states.
Any step in the direction of social equity in the burgeoning cannabis economy should be praised as an incremental move in the direction of implementing positive change. At the same time, these baby steps toward social equity in regulated cannabis licensing also illustrate the need for further action and show how far the regulated cannabis industry still needs to go on its roadmap to social equity in state sanctioned marijuana businesses.
Intended to solidify the state’s commitment to social equity in the cannabis licensing program, the Illinois bill was introduced by the State Senate’s Black caucus.
The measure seeks to change how the licensing lottery works. It aims to divide the process into two systems, tiered and qualified, to determine which applicants receive a dispensary license.
The bill would establish an additional lottery for 75 new adult-use cannabis dispensary licenses for high scoring applicants in the first round who were denied one of the first 75 licenses.
Why Does Illinois’s Social Equity in Cannabis Licensing Need Improvement?
Senator Cristina Castro, a Democrat representing Elgin, Illinois, told the Chicago Sun Times: “The main goal here is to get more licenses out the door and into the hands of socially equitable applicants. This plan adds more validity to Illinois’ already strong claim to being the industry leader in cannabis legalization that other states can seek to model their programs after.”
Regulated adult recreational marijuana became legal to consume and market in Illinois in 2019. Illinois was the 11th state to legalize adult use cannabis. Sales began on January 1, 2020. Senator Castro’s claim that Illinois is “the industry leader in cannabis legalization that other states can seek to model their programs after” is rooted in the 2019 Illinois Cannabis Regulation and Tax Act.
As parsed out by the Rogoway Law Group, on top of mandating labeling requirements and imposing restrictions on marijuana product packaging and advertising, the Illinois Cannabis Regulation and Tax Act carved out a state-wide social equity program for commercial cannabis applicants and offered redress to individuals who had been impacted by marijuana prohibition.
The Illinois Cannabis Regulation and Tax Act called for expunging minor cannabis violations, established a $20 million low-interest loan program to promote “social equity” in business ownership, and awarded “preference in the issuance of licenses to:
- individuals who have resided for at least 5 of the preceding 10 years in a disproportionately impacted area;
- individuals who have been arrested for, convicted of, or adjudged to be a ward of the juvenile court for any offense that is eligible to be expunged under the Act or member of an impacted family;
- individuals who are Black or Hispanic; or
- for employers with a minimum of 10 full-time employees who meet any of these criteria.
Illinois’s leadership in cannabis legalization seems to have fallen short in bringing to life the intentions of the Cannabis Regulation and Tax Act’s state-wide social equity program for commercial cannabis applicants.
After nearly a year of regulated cannabis sales in Illinois, the state had yet to issue a single license to a firm that was majority owned by a person of color. The Chicago Sun-Times headlined this exclusion as an “epic failure” of state regulators to keep promises on diversity in the legal cannabis industry.
What is at Stake in the Push For Social Equity in Cannabis Licensing?
In December 2020, the Sun-Times noted that, “Dispensaries in Illinois have sold $580 million of recreational marijuana over the first 11 months of the year, according to state regulators, and more than $331 million of medical marijuana.”
Alyssa Jank, manager of Chicago cannabis consultants the Brightfield Group, estimated in the same report that combined regulated marijuana sales would pass $1 billion for the year in Illinois. Cresco Labs, PharmaCann and Green Thumb Industries, known as GTI, along with other legal weed giants that appear to be engaged in a cycle of consolidation, scooped up the bulk of those legal weed revenues.
Illinois State Representative La Shawn Ford, a Democrat from Chicago who represents parts of the West Side in Springfield, told the Sun-Times: “There is nothing for us to be proud of as it relates to the rollout of cannabis.”
In December 2020, Ford termed efforts to achieve social equity in cannabis business licensing a “pipe dream.”
In January 2021, the State Senate’s measure to inject some modicum of fairness into the state’s social licensing system for legal cannabis business moves to the House for a concurrence vote.
Social equity in cannabis licensing may be a pipe dream. That’s no reason to quit firing up the pipe.