State delays issuance of new marijuana dispensary licenses

  • The latest casualty of the COVID-19 pandemic are new recreational marijuana dispensary licenses that were put on hold indefinitely by the state.

    The latest casualty of the COVID-19 pandemic are new recreational marijuana dispensary licenses that were put on hold indefinitely by the state. Associated Press

 
 
Updated 4/29/2020 6:51 PM

The latest casualty of the COVID-19 pandemic are new recreational marijuana dispensary licenses that were put on hold indefinitely by the state.

Gov. J.B. Pritzker will sign an executive order that suspends the requirement for the Illinois Department of Financial and Professional Regulation to issue by Friday up to 75 such licenses across the state, including 47 in the greater Chicago area.

                                                                                                                                                                                                                       
 

The suspension will last for the duration of the gubernatorial disaster proclamations, or until the department announces a new date "as soon as feasible," according to a news release Wednesday. "The ongoing COVID-19 pandemic has caused delays in the application review process. This executive order will help ensure that we continue to build out this industry in a deliberate and equity-centric manner," said Toi Hutchinson, Pritzker's senior advisor on cannabis control.

The news was a surprise to Alexander Perez of Chicago, who with his partners applied for a recreational license to open a dispensary in or around Aurora. The deadline for applications was Jan. 2.

A delay makes sense, Perez said, but some marijuana industry advocates had expected it would be about two weeks. He said he and other applicants have heard nothing from state officials in the last four months.

Perez and his partners applied for a license under a social equity component of marijuana legalization that allows reduced fees and 180 days to secure a dispensary location. But for others who invested in properties, "they are burning through capital," he said. None of his financial backers have withdrawn, but he said he's concerned about securing future capital if he gets a license.

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During the state's stay-at-home order, marijuana dispensaries are allowed to stay open, but only for in-store pickup. The marijuana industry is not eligible for federal coronavirus relief aid, as the substance remains illegal under federal law. Two Democratic U.S. House representatives from Colorado and Oregon introduced a bill last week that would grant aid eligibility to the industry.

Also last week, Illinois House Deputy Majority Leader Arthur Turner, Jr. filed a bill that expands protections for social equity applicants in response to anecdotal reports about "unscrupulous business arrangements" between majority investors and social equity partners, such as limiting profits and long-term ownership for the latter.

"While increasing diversity in an industry that is currently lacking will take time to accomplish, Gov. Pritzker and I remain committed to that goal," Hutchinson said. The administration will continue looking into ways to address that by working with Turner and other legislators, she said.

Once licenses are issued, the state will conduct a disparity study, required by law, that will give more information about additional efforts needed to achieve equity, Hutchinson said.

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