Clouted mix of insiders, others tied to state politics behind social equity pot bid
Green Renaissance Illinois was recently named a finalist in the state lottery for the next round of licenses for lucrative cannabis businesses.
A famed restaurateur.
An ex-Chicago police commander.
A longtime Republican Party operative.
A former Chicago Transit Authority official.
A cannabis industry insider related to a former state lawmaker.
A former director of the state agency that oversees weed dispensaries.
What do they all have in common?
They’re working together for Green Renaissance Illinois, a budding firm that was recently named a finalist in the state lottery for the next round of pot shop licenses.
The company submitted 25 perfect applications under the name GRI Holdings LLC, meaning it could win the right to open up to 10 stores. Under one estimate, those licenses could be worth more than $133 million.
GRI’s registered managers make up a clouted mix of insiders and others with ties to state politics, including restaurant mogul Phil Stefani; former high-ranking Chicago cop Thomas Wheeler Jr. and John Trotta, the CTA’s former vice president of purchasing and warehousing. 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 one of the state’s highly lucrative marijuana cultivation sites 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 new pot shop licenses.
What’s more, GRI’s listed address in Hinsdale is the same office suite used by multiple high-powered lobbyists registered with the state. GRI spokeswoman Anne Kavanagh said the location is merely a mailing address and insisted that none of the tenants are financially tied to the company.
Under heavy fire from scorned applicants and Democratic lawmakers calling for a halt to the lottery over concerns the application process favored highly capitalized and connected firms like GRI, Gov. J.B. Pritzker’s office has continued to boast that all of the 21 lottery participants — out of more than 900 firms that submitted applications — are so-called social equity applicants. Those are the folks given a leg-up in the process in an effort to bolster diversity in the white world of weed.
‘In full compliance with state regulations’
After the Sun-Times reached out to multiple people tied to GRI, Kavanagh responded by saying the company’s chief executive is real estate developer Gabriel Martinez, who is Latino. Kavanagh said the team also includes women, veterans and African Americans, including Wheeler.
“Our application was submitted in full compliance with state regulations and we look forward to having a positive impact on Illinois’ recreational cannabis industry,” Martinez said in a statement.
A bio on Martinez’s company website says he’s worked in residential and commercial real estate for more than 20 years, “creating strategic partnerships” with community, business and government leaders. He’s also a member of the Latino Leadership Council.
Kavanagh said the firm qualified for social equity status in the state licensing process by hiring a workforce of at least six people that meet various requirements, like living in an area that’s been harmed by the drug war or having an expungeable cannabis arrest or conviction.
State Rep. La Shawn Ford (D-Chicago), who has criticized the outcome of the social equity licensing process since the finalists were announced, decried “the well connected having their way in this cesspool of state government.
“Anybody that thought that they had a chance to get into cannabis with a fair shot, it seems as though they were wrong,” Ford said Tuesday. “And they invested and borrowed to make this dream become a reality when their odds were against them because the odds were for the well connected. And that’s a problem.”
The state is now locked in legal battles with various losing applicants that seek to stop the lottery. A spokeswoman for Pritzker’s office said the final date for the lottery hasn’t been set.
“As we continue to review questions that have been raised, our goal is to provide time to ensure that the process is fair and equitable,” spokeswoman Charity Greene said in a statement.
Firm seeking grow licenses, too
Meanwhile, GRI isn’t passing on the state’s other grass-related opportunities. Kavanagh said the team has also applied for the upcoming craft cultivation, infusion and transportation licenses, although her statement did not provide further details.
GRI is also tied directly to South Elgin CGF Inc. and Northbrook CGF Inc., firms that applied to open craft grow facilities in those suburbs before state officials have issued those licenses, which have been delayed by the pandemic.
Despite taking those steps, Kavanagh said the two corporations were dissolved Tuesday after the Sun-Times raised questions about the connections.
But members of GRI’s management group match descriptions of the unnamed board of managers outlined in a zoning document submitted by applicant South Elgin CGF earlier this year.
Stefani, who runs Tavern on Rush and other hot spots, appears to be listed as the applicant’s chief financial officer, who is described as having “built a highly successful family enterprise from the ground up” and operating 15 successful businesses in the Chicago area. Former President Bill Clinton has described Stefani as a “good friend.”
Ties to state politics
Ross Morreale played a key role in the efforts to gain approval for those suburban facilities, presenting himself to local officials as an expert in the field.
He co-founded Ataraxia, a downstate weed grower, though he’s no longer affiliated with the firm. He also helped start the Medical Cannabis Alliance of Illinois, an industry group whose membership has included many of the state’s existing owners.
But he’s also the brother of Kim Morreale, who’s married to the former state Rep. McAuliffe and previously served as the spokeswoman for the trade group. Before stepping down last year, McAuliffe voted present on the bill that legalized recreational weed, choosing not to take a side.
When McAuliffe resigned, his wife was embroiled in a scandal over a $6.6 million contract awarded to her communications firm by the Illinois Tollway Authority. Kim Morreale had previously served as a director of the Illinois Department of Transportation.
The uncle of Kim and Ross Morreale, Robert C. Gloppe, is among the registered managers of GRI.
Reached by phone Monday, Ross Morreale said he is simply a consultant and has no interest in the cannabis industry.
“I have no ownership,” he said. “I have submitted no applications. I’m not on any applications in Illinois for anything.”
However, Ross Morreale is listed as the primary contact person and full owner of Northbrook CGF in the firm’s zoning application, which was submitted in January. And in February, Ross Morreale was described in a news report as South Elgin CGF’s business manager when he appeared at a public meeting alongside Martinez, Wheeler and Stewart, another consultant with state government ties.
Stewart was the director of the division of professional regulation at the IDFPR when medical cannabis was legalized in 2014. That section of the agency deals directly with licensing.
Before that, Stewart was the general counsel for former Lt. Gov. Pat Quinn. When Quinn, a Democrat, moved into the governor’s mansion after his successor Rod Blagojevich was removed from office, Stewart was tapped as his senior counsel. Stewart later went on to serve as chairman of the state’s Procurement Policy Board and chief of the Cook County Bureau of Economic Development.
But a former Republican operative is also in loop. In addition to working for GRI, Barry’s LinkedIn profile states that she’s also a cannabis application consultant with Morreale’s firm. She previously worked as a communications analyst for GOP members of the Illinois House of Representatives before moving onto the Illinois House Republican Organization.
Lawsuit: Competition was not anonymous
A federal lawsuit filed by a list of losing applicants against the IDFPR and a top agency official seeks to halt the lottery for dispensary licenses, alleging that many of the participants are “owned by politically-connected insiders.” In a motion seeking an injunction filed Sept. 8 in the Northern District of Illinois, the plaintiffs’ attorney, Jon Loevy, states that the application scoring process “did not control for political influence or bias by scoring anonymously.”
“The vast majority of states with competitions to award cannabis licenses (including the original rounds in Illinois) do so via a process that requires applicants to redact all references to the names and affiliations of their principals for grading purposes,” the filing states. “Inexplicably, this competition was not graded anonymously.”
State officials didn’t immediately respond to the lawsuit’s claims. But last week, a spokesman for the outside firm that graded the applications said the process was “objective, following the state’s criteria, with a blind scoring methodology.”