Black entrepreneurs fear pot bill unfairly benefits current sellers, leaves others with just ‘a few crumbs’

The sponsors of the bill to legalize marijuana across Illinois have touted the measure’s efforts to include entrepreneurs of color in the state’s legal pot industry, which is largely made up of white-owned medical marijuana companies.

But some black Chicagoans looking to get into the industry voiced concerns about those firms having months to establish footholds in the expanded marketplace and potentially dominate the industry before other licenses are doled out to grow and sell the drug.

“The way that they left us is like, ‘You didn’t get everything [you wanted] but we’re going to leave you a little bit of crumbs and let’s see what you do with them,’” Donte Townsend, president of the Chicago chapter of the National Organization for the Reform of Marijuana Laws, said of the recently approved bill that Gov. J.B. Pritzker plans to sign.

Dan Pettigrew, a Hyde Park native who co-owns the nation’s largest black-owned marijuana company in Denver, went as far as to say the law could put a chokehold on cultivation licenses since it limits new large-scale growing operations.

“That’s a pretty big giveaway to the industry, giving them a serious, significant head start, and potentially a monopoly,” he said.

Provided/Dan Pettigrew

Months-long head start

The legalization bill will allow operators of Illinois’ 55 medical dispensaries to start selling recreational pot on Jan. 1, giving them the option to both convert their existing locations into dual-use dispensaries and open a second storefront dedicated solely to recreational pot sales. The state’s 20 medical pot cultivators will also have the opportunity to opt into the recreational program and begin growing additional pot in the lead-up to the implementation of the legalization bill.

Up to 75 licenses for additional recreational pot shops will then be distributed by next May, and up to 110 more could be handed out by December 2021 depending on demand.

While the state won’t issue any new licenses for large-scale cultivation centers until July 2021, there will be an opportunity for prospective business owners to obtain licenses for smaller cultivation centers, which will require less up-front capital to open. By July 2020, the state will issue 40 craft cultivation licenses and another 60 such licenses by December 2021.

While the legislation will create a designation for entrepreneurs of color hoping to obtain licenses and provide such businesses with loans and relief from fees that have posed a barrier to entry into the business, Townsend worries that the early approval process will allow existing players to start moving into the communities it aims to embolden.

“These guys are going to snatch up all potential sites that could be critical, especially in minority neighborhoods,” said Townsend, who believes those companies will target areas like Pilsen, Hyde Park and South Shore. “ A lot of these neighborhoods that have the potential of being gentrified are going to be flooded with dispensaries and then when it comes time for other applicants, specifically the social equity applicants, to look for a location or get started, they won’t have anywhere to go.”

Townsend, who works at the Ford plant on the Far South Side and was previously employed at a south suburban cannabis dispensary, nevertheless plans to apply for licenses to sell and infuse cannabis products and establish a craft growing operation.

Pettigrew, who co-owns Denver-based Viola Brands with former NBA star Al Harrington, also aims to obtain licenses to grow and sell recreational and medical marijuana in Illinois. Viola also currently cultivates marijuana in Colorado, California and Oregon and grows and sells the drug in Michigan.

Like Townsend, Pettigrew raised concerns about the lack of minority ownership in the statewide industry, particularly among those involved in major cultivation enterprises when recreational sales kick off.

“Only having 20 cultivators, and not creating new cultivation licenses is problematic for obvious reasons,” Pettigrew said. “That’s where the supply chain starts and if you have control of that, it’s significant.”

Still, Pettigrew called the pot legalization measure “the most progressive bill in the country,” pointing to the sweeping expungement plan and the equity-based application process.

“Obviously, it’s never going to be fair,” Pettigrew said. “But, based on where we started and where we are now, I think there’s significant progress and significant momentum that’s headed in the right direction.”

Concessions made

State Sen. Kimberly Lightford, a Maywood Democrat who co-sponsored the legalization bill, acknowledged that certain concessions had to be made that benefitted existing license holders.

“It was very difficult to get a bill passed that didn’t acknowledge the medical industry and allow them to have provisional licenses,” said Lightford.

“I think there could be some comfort around a medical industry that’s already up-and-running to be the first to roll over into recreational because they’ve already met all of the guidelines [and] the safety measures,” she added.

Dina Rollman — senior vice president of government and regulatory affairs for River North-based Green Thumb Industries, which currently holds licenses for five dispensaries and two cultivation centers in Illinois — said the bill aims to “ensure adult-use marijuana sales can begin in a timely manner.”

“The intent was not to give current operators a head start,” Rollman said.