On Christmas Eve, a Cook County judge turned down a demand by a group of Illinois craft grow applicants for the state to immediately issue 40 craft grow licenses. The demand for licenses was one of three requests made of Judge Allan Price Walker, who assumed the case mid-stream as he only recently came to the Chancery Court bench in November. The other two demands, to rule Gov. J.B. Pritzker’s delay of awarding licenses illegal, and to release plaintiffs from payroll and property maintenance obligations required by their applications, will be heard by Judge Walker on January 19.
“We are amazed that the Judge allowed such a critical element of the case to be implicitly satisfied,” said Illinois Craft Cannabis Association president Paul Magelli. “We are considering an appeal given the weakness of the judge’s order.”
The request for a writ of mandamus, a judicial order to require the state to take action, was filed by the Illinois Craft Cannabis Association, a group of craft grow cannabis applicants. Their licenses to grow and sell cannabis wholesale in a 5,000 square foot facility were originally supposed to be issued by July 1, but on June 29, Gov. Pritzker issued Executive Order 45, which indefinitely delayed the license deadline.
In their complaint and in oral arguments made before Judge Walker in November, the ICCA said that the Illinois Emergency Management Agency Act, the basis of Gov. Pritzker’s executive orders, requires the Governor to explain within 30 days why the executive order is necessary. Attorneys for the ICCA said Executive Order 45 did not adequately explain the reason for delaying the licenses indefinitely and that the Governor needed to specifically explain the reasons for the delay.
During oral arguments in November, Judge Walker seemed to agree that Executive Order 45 was thin on explanation, and that it did not specify why the Illinois Department of Agriculture (IDOA), the agency responsible for issuing craft grow licenses, was impacted by the fight against Covid-19.
On December 17, Judge Walked informed the parties that a decision would come by December 23. Then, on December 19, Gov. Pritzker issued Executive Order 74, which reaffirmed Executive Order 45, but also included a four paragraph explanation detailing how the IDOA was impacted by the fight against Covid-19.
Finally, issuing his decision a day later than promised, Judge Walker wrote that the new executive order did the trick, saying in his order, “While it does not explicitly say: ‘IDOA’s issuing cannabis licenses by the July 21, 2020 deadline would have the effect of diverting needed resources from the pandemic effort thus making it more difficult for the Governor to cope with the COVID-19 crisis. . .’ that is the point implicitly being made.”
Judge Walker found this new statement adequate, he wrote, ruling that a Governor’s executive order only needs, “to state how compliance with the CRTA [Cannabis Regulation and Tax Act] hinders his efforts to deal with the pandemic.”
Delays disproportionately impact craft grow applicants
On the evening of Wednesday, December 23, when Judge Walker’s ruling was originally expected, about 60 craft grow applicants held an online rally, moved from the Thompson Center in Chicago’s Loop, as wind and rain whipped up. The applicants expressed their frustration and told stories of the cost of waiting for the application results.
“It really feels as if we’re just an afterthought,” said applicant Kara Porter Adewole on Wednesday. “It is really surprising that the governor has just completely ignored us.”
Many craft grow applicants are not people of means and the continued delay of licenses, and the costs required to stay current for applications has been a heavy weight. Indeed, the craft grow license was specifically created as a social equity program with minority entrepreneurs in mind. The ICCA complains their members are spending an average $10,000 a month to maintain payroll and property required by the craft grow application.
For applicants, some of whom have invested life and family savings in their applications, those costs seemed reasonable when it was supposed to cover the space between April application filing and July license awards. But now that licenses have been delayed over five months, state delays have become overwhelming.
“We’ve literally put in everything we have for this industry,” said Ambrose Jackson, a craft grow social equity applicant who spoke at Wednesday’s online rally.
The 40 craft grow licenses originally due July 1, as well as 40 infuser and an unlimited number of transport licenses, have taken a backseat in public consciousness to 75 cannabis dispensary licenses that were awarded September 3, but then mired in a series of court cases. Applications for both license sets, the dispensary licenses and the craft grow/infuser/transport licenses, were scored by accounting firm KPMG.
One of the lawsuits filed by dispensary applicants against the state, Wah v. IDFPR, names KPMG as a defendant. It is possible that application scoring changes required by a judge in the dispensary lawsuit could extend to craft grow/infuser/transport applications. Under these circumstances, issuing craft grow, infuser, or transport licenses could expose the state to a new series of lawsuits.