A battle over legal cannabis oversight in Illinois pits startup social equity business owners against big multistate operators, and could determine the future regulation of the industry in the state.
At issue is the desire for a single regulatory body to oversee the complex fledgling industry. Currently, at least seven agencies regulate various aspects, giving rise to sometimes contradictory guidelines. The state’s licensing system has come under heavy criticism and litigation for delays, inconsistent scoring of applications, and non-responsiveness to applicants with questions about the process.
So most business operators agree there should be one body to issue licenses, set guidelines and mete out discipline, as in most other states that have legalized marijuana. The dispute is over what that single overseer would look like.
One one side, the Cannabis Business Association of Illinois is lobbying for a cannabis commission, with five to nine bipartisan members appointed by the governor, similar to the Illinois Gaming Board or the Illinois Liquor Control Commission.
It would hold monthly public meetings, publish agendas and minutes, and be subject to the Freedom of Information Act.
On the other side of the argument, members of groups such as the Cannabis Equity IL Coalition, Chicago NORML and the Illinois Independent Craft Growers Association prefer one agency to oversee all aspects of the business, including growers, dispensaries, transporters and infusers.
“Transparency and public access” are the reasons for a commission, according to Pam Althoff, spokeswoman for the Cannabis Business Association of Illinois. “It would allow the public to know exactly what’s going on in the industry, and for stakeholders to have access in a public forum for a nascent industry that still needs great guidance, and a little more nimbleness.”
One of the most common complaints from operators, Althoff said, is that they get contradictory directions from different agencies. One might want security cameras, employee badging or operations arranged one way, while others might want a different way. Some applicants, she said, got contradictory paperwork assigning them to different areas of the state.
The most glaring difference between agencies is that the Illinois Department of Agriculture allows craft growers to sell equity in their licenses at any time, while the Illinois Department of Financial and Professional Regulation prohibits dispensary license holders from selling until they have opened for business. That is designed to keep new minority license holders from being replaced by wealthy white-owned conglomerates, but keeps cash-strapped startups from getting new investors to become operational.
The current Cannabis Regulation Oversight Office is meant to coordinate actions among agencies, but has little enforcement authority.
Many smaller operators are afraid that a cannabis commission would be too influenced by large companies.
Edie Moore, co-founder of Chicago NORML and a multiple cannabis business license holder, said a commission that only meets once a month is not nimble or responsive enough. Operators, she said, need full-time state employees to address myriad operational issues that come up every day. And a specialty agency is needed to concentrate on cannabis, rather than existing agencies that also oversee all manner of licenses, from nursing to barbers.
“None of those other commissions have social equity in mind, and none are dealing with an industry that is as fast-moving as cannabis,” she said.
Scott Redman, a founder of the Illinois Independent Craft Growers Association and investor in a craft growing startup, wrote to the Tribune that an agency would better support social equity license holders, generally defined by state law as people with prior low-level cannabis convictions or coming from disadvantaged areas. They believe an agency would be far more immune to influence by large cannabis companies.
House Bill 1436, sponsored by Rep. Marcus Evans Jr., would create a commission. Advocates of an agency plan to hold a news conference Tuesday, and are hoping an omnibus bill would address a range of issues, including increasing the size of craft growers, allowing people with criminal convictions to work in the industry, and prohibiting police from using cannabis as probable cause to initiate a stop.
The smaller operators have an important ally on their side. In response to the Tribune asking, Gov. J.B. Pritzker’s office issued a statement that the governor is focused on promoting equity in the industry through creation of an agency.
“Creation of a designated agency for cannabis regulation will contribute to this goal by bolstering and empowering the Cannabis Equity Commission and giving small, social equity businesses more safeguards in the regulatory process,” the statement read. “It’s also a more standardized, cost-effective approach that sets out clear accountability structures, public engagement standards and market response tactics. The governor supports the single regulatory agency proposal, as does the Cannabis Regulation Oversight Office.”
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