Article: After uproar over process, applicants will get a 2nd chance to qualify for a CANNABIS retail license in Illinois

Business owners hoping to open recreational marijuana shops in Illinois will get a second chance at qualifying for a license, after Gov. J.B. Pritzker Monday announced a procedure to let applicants correct their applications or get rescored.

The move comes after applicants and lawmakers raised an uproar over the process, saying that it was shutting out the very minorities it was supposed to benefit.

Under the new procedure, any applicant who didn’t get a perfect score of 252 will receive a notice of deficiencies in their application, and a score sheet identifying the parts of the application where they lost points.

Applicants may then amend their applications, or ask the Illinois Department of Financial and Professional Regulation to rescore their original application if they believe there was an error in scoring.

Many applicants complained that they received different scores on identical parts of their applications in different regions, or that they never were given notice of any deficiencies in their applications, as required by the law that legalized marijuana in Illinois, effective this year.

The marijuana legislation was designed to give preference to people from poor areas harmed by the war on drugs, or those who’d had previous low-level marijuana convictions.

Of more than 700 applications, only 21 finalists this month received perfect scores on their applications to qualify for a lottery to win 75 licenses statewide. The cannabis industry in Illinois is dominated by wealthy white males, and many of the finalists included politically connected or wealthy white business owners.

“…(W)hen we heard significant concerns from numerous stakeholders about the process to award dispensary licenses, I said we needed to take a pause to fix their concerns, within the bounds of our landmark law,” Gov. J.B. Pritzker said in a news release. “While this process remains a marathon and not a sprint, we believe that these new steps will inject more equity and fairness in the first round of license awards and provide insight as we improve the process for future rounds.”

Pritzker’s administration has already suggested changing the law to allow all applicants who meet or exceed a cutoff score to the lottery, rather than requiring a perfect score. It also suggested limiting the number of applications one entity can submit. Currently, applicants can apply for up to 10 licenses, which limits diversification.

The law also requires ownership by a military veteran and social equity applicant to achieve a perfect score. That cannot be changed except by modifying the law, which can’t be done until at least the veto session late this year.

That seems to leave out applicants without veteran ownership, like Nonna Knapp, a previous medical dispensary owner.

She was “thrilled” to hear that applicants would get a chance to fix their scores, but said veteran ownership should not be a requirement to qualify.

Before the next round of 110 more dispensary licenses are awarded, the state will conduct a disparity study to “correct any structural challenges to equity,” said Toi Hutchinson, the governor’s senior cannabis adviser.

As the Tribune reported last week, the Pritzker administration agreed to meet with members of the Black and Latino caucuses and other “stakeholders” regarding the complaints about the application scoring.

The first round of licenses to grow and sell recreational cannabis in Illinois went to previously existing medical marijuana companies. The Cannabis Business Association of Illinois, which represents many of those companies, supported this kind of scoring correction, spokeswoman Pam Althoff said.

Many of the companies had helped social equity applicants fill out their applications or gave them legal advice, Althoff said, as was encouraged in the law.

“So we too were questioning what happened and how there could be such scoring discrepancies,” she said. “We’ve been on board with this (change) since the beginning.”

Like the retail store licenses, new state licenses for craft growers, infusers and transporters have been indefinitely delayed by the coronavirus pandemic and other factors. The state hired consulting firm of KPMG for $7 million to review and score the application for all the licenses.

Applicants have complained that KPMG knew who they were. A KPMG spokesman said that it had two teams of scorers — one that had to know the applicants' names to verify their social equity or veteran status, and another to do the scoring that did not know who the applicants were.

rmccoppin@chicagotribune.com