The Holdup Delaying People of Color from Profiting from Legal Pot

The coronavirus pandemic has put a dent in many businesses, but not so for the fledgling marijuana industry.

A sign of high sales: In the six months that cannabis has been legal for all adults in Illinois, the state this week announced that it has taken in more than $52 million in taxes.

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Anyone who has paid that tax on recreational weed has more than likely bought it from a dispensary owned by a white man, which means that entrepreneurs of color are thus missing out on the profits, despite a social equity commitment built into the law.

A new set of 75 dispensary licenses, judged in part on social equity factors, was to have been awarded by May 1, but has been indefinitely delayed due to the coronavirus.

Gov. J.B. Pritzker on Wednesday reaffirmed his commitment to social equity, and said he expects that “action” will be taken within six weeks, but did not elaborate on whether that means licenses will finally be awarded. Crain’s Chicago Business reports that due to parliamentary rules and the need for a legislative commission to enact an emergency measure in the likely event of a tiebreaker, licensing news may not come until mid-to-late September.

The process for awarding licenses to craft cannabis growers, transporters and infusers is likewise delayed.

Meanwhile, however, some 700 applicants that spent thousands of dollars to complete hundreds of pages of applications, continue to wait.

“Those folks are now basically standing idly by. They might have leases for property, they might be trying to figure out where their financing comes from in a market like this and they might also be trying to figure out if they can hold on to the same team members that they had when they were building out their teams almost a year ago,” said Ron Holmes, a partner at The Majority-Minority Group LLC, a cannabis application consultant company. “Certainly, people are grumbling. Doubt is starting to seep in about the integrity of this process. Again, it’s really tough for these individuals because they’re also applying for a license from the state which means that they might have apprehension about saying these things outwardly.”

Despite that anxiety and frustration, state Rep. Emanuel “Chris” Welch, D-Westchester, said the Pritzker administration should consider slowing down the process if it needs to in order to assure that license applicants that purport to be Black-owned actually are.

“That these are not people that are just shilling for other corporations and things of that nature, and we know that that has happened because we’ve seen it happen in other states. I think it would be an embarrassment on the administration and a slap in the face of our Black Caucus who fought hard for it, and, of course, to real owners who may get rejected if this isn’t vetted properly,” Welch said.

He suggests adding teeth to the law, such as requiring applicants or those poised to win licenses to sign sworn affidavits about ownership, a breach of which could be punishable by a fine or criminal penalty.

Welch said he believes Pritzker has tools to include such protections, but he is also preparing legislation that the General Assembly could take up during its planned veto session in November.

Given the healthy market for recreational pot, Welch said there’s no reason to believe a further pause will ward off landlords or investors.

“This is an industry that’s going to continue to grow, and we don’t want to be left out. We don’t want to rush and get it wrong and have us left out on the sidelines like we have been left out historically in systems because of systematic failure in the past,” he said. “This is an opportunity to create Black wealth. Real Black wealth. And I don’t want to rush and get it wrong. I want to take the time and get it right and create some new Black millionaires in our state.”

Welch said the movement spurred by the killing of George Floyd means the nation is at a “watershed moment.”

“The governor’s office could certainly delay awarding those applications at such an important moment in our nation’s history and our state’s history. We can’t fail at this moment,” he said.

Follow Amanda Vinicky on Twitter: @AmandaVinicky

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