* Fox 32…
Minority marijuana license holders are calling on the state to loosen ownership regulations in order to make it easier to create and build retail stores.
Many of them cite issues with the state’s cannabis social equity program.
The program was designed to offer disadvantaged people and communities of color disproportionately impacted by the War on Drugs an opportunity to benefit from the cannabis industry.
But instead, license holders say the process has been plagued by red tape.
“Three years in, and we still don’t have any Black-owned cannabis operators,” Douglas Kelly, head of the Cannabis Equity Illinois Coalition, said at a news conference today outside the State of Illinois Building in the Loop, a move aimed at increasing political pressure on Gov. J.B. Pritzker.
License holders say they’re being hampered by the state’s Department of Financial & Professional Regulation’s rules, which prevent them from making any changes to ownership reported on their initial applications until they receive a final state inspection to open a dispensary. But it can cost $500,000 to $1 million or more to get a dispensary ready to open, requiring many license holders to seek investors.
“The rule-making process is screwing it up. Instead of making it easier for Blacks and Latinos, they’re making it harder,” said Rickey Hendon, a former state senator who won a retail license and plans to open a location in the South Loop.
He said he has an agreement with investors, but the state rules make it hard to complete a deal that would allow him to raise additional money to build out a facility, which he estimates will take $1.5 million to $2 million.
* The Tribune…
But under guidance by the Illinois Department of Financial and Professional Regulation, license holders are prohibited from selling their preliminary “conditional” licenses until they are approved to begin retail sales.
“Which is ludicrous, because in the conditional phase is when you need to raise the most capital,” said Edie Moore, co-founder of Chicago NORML and a conditional license holder. “There’s no reason not to do it. It’s not disallowed in the law, and it hurts people.” […]
The conditional license holders can’t open for business until they pass background checks, get local site approval, pass an inspection, and pay the license fee.
The apparent intent of the policy against selling conditional licenses was to keep minorities and social equity license holders from selling out before even beginning operations. But owners say that keeps them from using their greatest asset, shares of ownership in the license, and they should have the same rights as business owners in other industries.
* Chicago NORML’s Executive Director Kiana Hughes and Deputy Governor Christian Mitchell spoke on Chicago Tonight…
Kiana Hughes: One of the things that we’re hearing is that on every level, licensees are hitting obstacles that are being put in place, or that are just kind of left in place, whether it’s by actual legislation, whether it’s by the rules, whether it’s by interpretations of the law. So for example, you might have there are some dispensary owners, that are all dispensary owners.
All you get when you get the license is a conditional license. Your license isn’t real until you’re actually able to open your doors. Well, as you can imagine a lot of social equity licensees are trying to raise capital to get to the point where they can actually open their doors.
One of the rules is being interpreted as saying that you cannot sell or exchange any portion of ownership or equity in your company in order to get investors for your business. So it’s making it very hard for them to raise capital.
Christian Mitchell: We’re hearing two different sides of this. On the one hand, you’ve got owners who are saying ‘hey, we want to change principal officers so we can raise capital right now because we need it.’ On the other hand, you have a pretty much an equal number of folks saying ‘hey, wait a second.’
We’ve got principal officers who have been holding this for a couple of years. They’re people of color, we want that growth in this industry. But we don’t want to some of these predatory folks who are coming in and saying, hey, I’ll give you some cash, but you’ve got to give me a majority stake in your business. Do we have to restore that license now? Is that true social equity is now a majority person has bought in has the sake and now is saying ‘I’m a social equity license because this person originally had the licenses conditional holder.’
These are all nuanced debates that we need to have. My office door is open as as the governor’s our phone lines are open there. Multiple members of the coalition have contact info for us. We got to sit down and have a nuanced conversation about this in the future social equity in the dispensary.