3 pot shop finalists sue to prevent state from adding more applicants to lottery for 75 new licenses

The finalists petitioned the Illinois Supreme Court to move forward with the drawings after Gov. Pritzker announced last month that the state would allow losing firms to revise their applications and challenge their scores.

SHARE 3 pot shop finalists sue to prevent state from adding more applicants to lottery for 75 new licenses
A customer makes a purchase at Rise Joliet, a cannabis dispensary in southwest suburban Joliet.

Illinois pot shops have been selling recreational marijuana since Jan. 1.

Ashlee Rezin Garcia/Sun-Times

Three finalists for the next round of cannabis dispensary licenses — including a group with deep ties to Illinois politics and a major pot firm — have filed suit in a bid to prevent the state from adding more applicants to an upcoming lottery to determine the winners.

GRI Holdings, SB IL and Vertical Management jointly petitioned the Illinois Supreme Court to move forward with the lottery drawings after Gov. J.B. Pritzker announced last month that the state would allow the more than 900 losing firms to revise their applications and challenge their scores.

John M. Fitzgerald, an attorney for GRI Holdings, argued that the new process doesn’t jive with the letter of the state legalization law. The three firms filing suit are among the 21 groups that have already qualified for the lottery, all of which received perfect scores on their applications.

“The General Assembly crafted a very well thought out and carefully planned process for awarding these licenses and the executive branch is required to follow the process set out in the act,” Fitzgerald told the Sun-Times. “The executive branch has no authority to improvise some brand new process that the General Assembly did not authorize.”

In a statement, Pritzker spokeswoman Charity Greene didn’t directly address the petition and instead reaffirmed the administration’s commitment to bolstering diversity in the state’s overwhelmingly white pot industry.

As we have been from the very beginning, the administration remains committed to launching the Illinois adult-use cannabis industry in a fair, equitable manner that provides a path for Illinoisans from all backgrounds to benefit from legalization, including diversifying the industry and criminal justice reform, and investing proceeds to rebuild communities most harmed by the failed war on drugs,” Greene said.

On Sept. 21, Pritzker outlined the new process allowing losing applicants to formally challenge scoring and update their applications to include information that was left out, as is required under the law. The move to offer a second chance came after jilted pot shop hopefuls filed lawsuits over the application process and raised concerns about the groups that were initially included in the lottery, some of which include clouted insiders and individuals with deep pockets.

Two of the applicants Fitzgerald is representing are seemingly well-funded companies with existing ties to legal cannabis.

GRI Holdings has registered managers that include restaurant mogul Phil Stefani and former high-ranking Chicago cop Thomas Wheeler Jr., among others. Ashley Barry, the former director of operations for the Illinois House Republican Organization, is also serving as GRI’s community outreach coordinator.

Throughout the application process, GRI has been guided by two consultants with close ties to Springfield: Ross Morreale, the co-founder of an Illinois cultivation site and brother-in-law of former state Rep. Michael McAuliffe (R-Chicago), and Jay Stewart, a former director of the Illinois Department of Financial and Professional Regulation, the agency that will issue the licenses.

Another petitioner, SB IL, is linked to Star Buds, an international cannabis firm with operations across multiple states.

In June, Star Buds announced plans to sell 13 dispensaries and a cultivation center in Colorado in a deal valued at $118 million. The company also has locations in Maryland, Oklahoma and Jamaica, according to its website.

Both applicants have the maximum 10 chances to win dispensary licenses in the lottery.

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