The U.S. legal marijuana market has been operating for more than a decade, and new challenges are beginning to surface that lawmakers did not anticipate when drafting regulations for the multibillion-dollar industry.
One issue currently grabbing attention in Illinois is what should happen if the holder of a cannabis social equity license passes away. For advocates of equity programs, the bigger question is whether the rules should ensure that ownership remains in the hands of people and communities that were harmed by decades of marijuana prohibition.
The matter recently gained attention after John Rushing, the licensee behind three Cookies-branded dispensaries in Illinois, passed away in December. Rushing was a Vietnam veteran and longtime resident of Palatine, Chicago. His company, Project Equity Illinois, had been awarded three retail permits in 2022. The licenses allowed the opening of Cookies shops in Pontoon Beach, Bloomington, and Peoria. Each store later received a $240,000 forgivable grant from the state.
The uncertainty now is whether those permits can transfer to his heirs or whether they must remain in the hands of someone who independently qualifies under Illinois’ social equity rules. Current law does not clearly spell this out, and regulators have avoided direct comment, pointing only to the existing statutes.
Public records confirm Rushing held the licenses, but state law provides only vague direction on how succession works if the original permit holder dies. Some observers argue that nothing prevents the permits from being sold, even to buyers who do not meet social equity qualifications.
This isn’t the first time death has complicated cannabis licensing in Illinois. When recreational sales began in 2020, some applicants passed away before their licenses were granted, which automatically voided those applications. Rushing’s case, however, is the first widely known instance of a license holder dying after the dispensaries were already operational.
Illinois’ social equity program is meant to repair some of the harm caused by decades of cannabis criminalization, especially for communities heavily targeted by drug laws. However, its requirements are looser compared to some other states. An applicant may qualify if they have lived in an area designated as disproportionately impacted, if they or a close family member have a marijuana-related conviction, or even through employees if a business has enough qualifying workers.
Experts question how long such programs will remain in place. Robert Silverman, a professor at the University of Buffalo, noted that equity permits were always intended as a temporary form of restitution. As fewer people meet the criteria over time, states may eventually decide that the special licenses are no longer needed and revert to standard business permits instead.
Cannabis firms around the country, such as TerrAscend Corp. (TSX: TSND) (OTCQX: TSNDF), will be watching how Illinois resolves the issue of an existing social equity license after its holder passes on. This decision could set a precedent that other states take a leaf from when handling a similar situation.
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