The next step in Missouri’s adult-use marijuana rollout is to license 144 microbusinesses hoping to join the growing pot industry.
Under the recreational marijuana amendment passed in November, these licenses are intended to give smaller businesses a chance to have a place at the table.
Preference will be given to veterans with service-related disabilities, people who have been negatively affected by marijuana prohibition and others with a net worth of less than $250,000. Licenses will be granted through a lottery.
Illinois tried to achieve the same results after legalizing marijuana in 2019, but a complicated system of granting dispensary licenses unraveled with messy results.
Final decisions were delayed more than a year in Illinois, and some licenses took nearly two years to resolve. The early lottery system turned into a maze of applicant pools, each with its own selection system.
And then, many of the finalists included “wealthy white owners, some with political connections,” according to the Chicago Tribune.
Illinois’ first round of applicants were able to apply by Jan. 2, 2020, with licenses expected to be awarded by May 1. But initial decisions were not made until Sept. 3, 2021.
Then the original lottery system turned out to be flawed because it “did not include the correct number of qualified entries based on the application fees applicants paid,” according to state documents.
A series of three “corrective” lotteries were then held, with a total of 55 more licenses initially up for grabs.
Later, an Illinois Circuit Court ordered another 51 licenses to be divided among applicants who claimed they were wrongfully excluded from the original lottery or “inadvertently omitted.”
It took until the summer of 2022 for these lotteries to happen.
The long delays frustrated applicants who claim they caused a serious loss of money while waiting for a decision.
Ambrose Jackson, CEO of Parkway Dispensaries Group in Danville, Illinois, said he waited over two years to receive his license. He believes the delays and setbacks were intentional.
“There are parties in Illinois who benefit from delay after delay after delay, and so there’s a lot of people who believe that a lot of these delays were intentional,” Jackson said.
“Part of their playbook is to keep competition from entering the market for as long as they can.”
At the outset, Illinois hired a consulting firm for around $6.7 million to score applicants and award an original 75 dispensary licenses, as well as more than 80 craft grower, infuser and transporter licenses, the Chicago Tribune reported.
Like Missouri, the goal of the licensing process was to provide opportunities to a disadvantaged population that had been hurt by previous cannabis restrictions.
The goal of the Illinois social equity program was to ensure that “the makeup of dispensary ownership reflects the diverse, inclusive nature of the population of Illinois while also undoing decades of wrongs by the failed war on drugs,” according to Chris Slaby, public information officer for the Illinois Department of Financial and Professional Regulation.
Applicants could receive social equity licenses if 51% of the business fit the following qualifications: They had lived in disproportionately impacted areas for five of the last 10 years, they had been convicted of certain cannabis crimes or they had a family member convicted of a cannabis crime.
Disproportionately impacted areas have high levels of unemployment and federal assistance to residents, low high school graduation rates and other qualifiers.
The applicants were scored, and those who received at least 252 points moved into one pool — called the “tied applicant lottery” — to compete for 75 licenses.
Those with at least 213 points were automatically entered into one of two pools, either the “qualifying applicant lottery” or “social equity justice involved lottery.”
These two lotteries had 55 licenses each to award, for a total of 110.
The department then planned to issue 17 more licenses in each of the three lotteries — or 51 more licenses total — under the court-ordered corrective lottery.
To date, Illinois has issued 195 conditional adult-use cannabis dispensary licenses to social equity applicants, with just 13 completing the steps toward full licensure and in operation.
These 13 are among the 123 adult-use cannabis dispensaries that are currently operating in the state, according to Slaby.
In Missouri, applicants will be able to seek licenses by June 6, and the Department of Health and Senior Services will begin accepting applications on or before Sept. 4.
A microbusiness dispensary or wholesale facility is “designed to provide a path to facility ownership for individuals who otherwise might not easily access that opportunity,” according to the DHSS website.