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Gov. Pritzker Signs Law To Get Ball Rolling After Continued Delays In Licenses For Minority Marijuana Entrepreneurs

CHICAGO (CBS) -- Recreational marijuana sales continue to break records in Illinois, but the same companies have continued to cash in.

Sales record after sales record has been shattered - even through the pandemic - as the State of Illinois has raked in more than $100 million in taxes and fees. And medical marijuana companies got the first go at recreational weed and have continued to profit.

But after more than a year of delays, a big change came Thursday such that means a more diverse group of people can start selling pot.

As CBS 2's Tara Molina reported Thursday, and has been tracking from the beginning, not one minority-owned pot business has opened up shop yet because of continued delays that have been going on for more than a year.

Gov. JB Pritzker's signature and announcement on HB 1443 Thursday finally gets the ball rolling in giving those trying to break into the industry a chance to do it – with three license lotteries announced for the social equity applicants who have been waiting and waiting.

They state will distribute 185 licenses to operate adult-use cannabis dispensaries through those lotteries, starting July 29.

"Over the past century, the failed war on drugs has destroyed families, filled prisons with nonviolent offenders, and disproportionately disrupted Black and brown communities,' Gov. Pritzker said in a news release. "Legalizing adult-use cannabis brought about an important change and this latest piece of legislation helps move us even closer to our goal of establishing a cannabis industry in Illinois that doesn't shy away from the pain caused by the war on drugs, but instead centers equity and community reinvestment as the key to moving forward."

The state also announced more than 200 people have qualified for the first new Craft Grow, Infuser, and Transporter licenses.

"We're not going to be done until we have, in Illinois, the most diverse industry in the country," said Toi Hutchinson is the Governor's Senior advisor on Cannabis. "This work is hard. It's layered. It's complicated. It's criminal justice reform; drug policy reform - as well as a case study on how you reinvest in communities to undo decades of horrible policies."

Among the applicants who have gone on waiting for a license all this time is Kiana Hughes.

"I'm looking forward to seeing more variety and diversity all around," she said.

Hughes has waited more than a year, and she's still waiting to see if she'll be awarded a license to open a cannabis dispensary in Illinois.

"It would feel really great to walk into a dispensary and see more Black and brown faces," she said.

With regard to the new legislation signed Thursday, Hughes said, "Today is a great day."

Hughes owns Elevated Education and represents Chicago NORML, a group of cannabis advocates also focused on a more equitable industry. As an applicant and advocate, she said these announcements are a step forward.

"I'm looking forward to seeing a lot more dispensaries opening up in culturally diverse neighborhoods and reflecting the diversity of those neighborhoods," Hughes said.

Molina asked Hutchinson about the number of applicants we know have been pushed out of the process that was meant to diversify the industry because of extended delays at the state level - something we've tracked for more than a year here at CBS 2 – because the application process was and is expensive.

Molina: "What do you say to the people who kind of succumbed to the delays?"

Hutchinson: "It's hard. It's a hard thing. It's a hard thing. We're going to keep going though. That's part of why this legislation allows for us to continue with the same application pool."

Hutchinson added: "We're very cognizant of how difficult this has been. We are very concerned about all of those folks who got caught up in the process."

A Breakdown Of New Marijuana Legislation Signed Thursday:
The Illinois State Lottery will conduct three lotteries for adult-use dispensary applicants this year. The lotteries will be held on the following dates, each geared toward different applicants:

July 29: The first lottery will be for qualifying applicants who a received score of at least 85 percent of the 250 application points. There are 55 licenses in this category.

Aug. 5: The second lottery will be for social equity justice-involved applicants who received a score of at least 85 percent of the 250 application points and are located in a disproportionately-affected area, or have an eligible past cannabis-related conviction or a family member with one. There are also 55 licenses in this category.

Aug. 19: This final lottery will be held for top-scoring, tied applicants for the original 75 licenses available under the Cannabis Regulation and Tax Act.

The lotteries will be a blind process that will be automated through a computer program and run through multiple quality assurance checks before the final results are delivered to the Illinois Department of Financial and Professional Regulation.

Meanwhile, the state is opening up a total of 213 Craft Grow, Infuser, and Transportation licenses. The Illinois Department of Agriculture issued notifications Thursday to applicants eligible to receive such a license – 40 craft grow, 32, infuser, and 141 transporter. Craft grow and infuser applicants have 10 business days to respond to the notifications they received, and transported applicants have until February 2022.

A craft grower license allows a holder to cultivate, prepare, and package cannabis. An infuser license allows a holder to place cannabis concentrate into a product such as edibles. A transporter license allows a holder to transport cannabis and infused products on behalf of other Illinois marijuana businesses.

Under state law, applicants for these licenses were not required to report demographic data such as race, gender, or age, but 80 percent of applicants did so anyway. A total of 67 percent of those applicants who reported their demographic data reported being non-white. With regard to minority ownership, 98 applicants reported being Black-owned, 19 Latinx-owned, and 34 Black woman-owned.

Also announced Thursday was a Cannabis Community College Vocational Pilot Program, which grants eligible institutions of higher education the ability to develop a curriculum to train those interested in getting into the marijuana business. Initially, licenses for such programs were limited to eight community colleges statewide, but HB 1443 removed that limit.

Seven community colleges have now been licensed for the program, with more licenses coming soon. The first licensees are Kishwaukee College in Malta, Illinois; Oakton Community College in Des Plaines; Olive-Harvey College at 10001 S. Woodlawn Ave.; Shawnee Community College in Ullin, Illinois; Southwestern Illinois College based in Belleville, Illinois; Triton College in River Grove; and Wilbur Wright College at 4300 N. Narragansett Ave.

Further, the Illinois Department of Commerce and Economic Opportunity has established a Social Equity Loan program to provide financial assistance for social equity cannabis licensees, and to help increase capital for social equity entrepreneurs over time. The program will provide flexible low-interest loans to help with expenses for social equity marijuana entrepreneurs.

Loan terms will be determined in a case-by-case basis, generally involving a repayment term of over five years. To be eligible, a business must receive licensure and meet the qualifications of a social equity cannabis applicant – with funding prioritized for the applicants that have suffered most from the failed war on drugs.

The state is partnering with Good Tree Capital and Credit Union 1 for the loans. Loans totaling $100,000 may be made available for cannabis transporters, $500,000 for infusers or adult-use dispensing organizations, and $1 million for cultivators. The state expects up to $34 million in loans could be made available in the first year, and will work with partners to enhance the loan program so as to ensure it is sustainable.

HB 1443 also expands access for medical cannabis users by removing restrictions on where medical cardholders can buy cannabis.

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