Last week, a bill to create new cannabis dispensary licenses in the state of Illinois was approved by the House. The bill, HB 1443, was sponsored by Rep. La Shawn Ford and will be used to address the shortcomings of the Cannabis Regulation and Tax Act of 2019, specifically the license lottery that has been delayed by legal disputes, controversy and the coronavirus pandemic, for more than a year.
The measure would establish a pair of new cannabis dispensary lotteries, providing more than 50 licenses while addressing concerns about the initial 75 licenses cited in the 2019 legislation.
The initiative was approved by the House with bipartisan opposition as well as support. For instance, Carol Ammons, the Democratic Representative of Urbana, asked if the legislation would achieve the social equity spirit of the first cannabis legalization legislation. Ford explained that his measure was the best way to increase the chances of local brown and Black communities in the state gaining access to the burgeoning cannabis industry.
The licenses established by the 2019 legislation were to be granted in May of last year. However, the coronavirus outbreak hindered this. Backlash over how some applicants received their licenses prompted further delay with lawsuits against the state delaying the move for a third time. The finalists of the preliminary lottery had sued the state after Governor JB Pritzker declared that the applications didn’t meet the requirements and would have to be rescored and edited.
Initially, licenses were to be awarded in order of applicant scores, with applicants that received similar scores entering tiebreaker lotteries. However, only 20 or so applicants out of the 900 that applied received perfect scores, making them eligible for the lottery.
Under the new legislation, the 55 licenses would be provided via a Qualifying Applicant Lottery, which would be accessible to applicants that received a score of 85% or higher in the earlier submissions. This would allow companies that either weren’t included in the first lottery or didn’t receive perfect scores an additional chance at receiving dispensary licenses.
The other 55 licenses will be provided via a social equity justice lottery. The eligibility criteria states that to be eligible, one must qualify as a social equity applicant and have a score of 85% or more on their submission. This means that 51% of the company’s ownership must be a member of a family that has been affected by the drug war, have been arrested and/or convicted of a cannabis crime eligible for expungement or be somebody who lived in an area affected by the drug war for a decade.
As applicants vie to win the social equity licenses, additional opportunities are also available in the federally legal niche of cannabis products that don’t contain THC. An example in this regard is the success registered by The Alkaline Water Company Inc. (NASDAQ: WTER) (CSE: WTER) which manufactures, among other products CBD gummies, drinks and tinctures.
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