Global accounting firm’s haul for grading pot applications jumps to $14M despite criticism over botched licensing rollout

Despite being faulted for the state’s troubled cannabis licensing rollout, a “Big Four” accounting firm is now collecting over $14 million to grade applications for the long-delayed permits.

KPMG, a global network with offices in Illinois and nearly $30 billion in revenue last year, has seen its two state contracts nearly triple in value amid a series of licensing delays, some of which have been directly or indirectly tied to the firm.

The firm is now getting $9.17 million to grade and reevaluate dispensary applications, according to a contract amendment filed Feb. 4 by the Illinois Department of Financial and Professional Regulation, which oversees the state’s pot shops. That’s nearly 267% more than the $2.5 million the contract was initially worth.

KPMG’s contract to score the outstanding craft cultivation, infusion and transportation applications also doubled on January 25, climbing from $2.5 million to $5 million, according to documents obtained from the Illinois Department of Agriculture.

The revisions to those contracts came as state officials look to move forward with plans to give losing dispensary applicants a second chance to qualify for the sought-after licenses and ensure the same issues don’t plague the grading of the other applications.

The most recent holdup in issuing the permits was prompted by an ongoing controversy sparked by the state’s announcement last September that just 21 of the more than 900 dispensary applicant groups were tapped for a lottery to determine the winners. Following the announcement, applicants began raising issues with the scoring process and cast blame on KPMG.

Around the same time, the Sun-Times found that a KPMG employee is partnered in one of the firms that initially qualified for the lottery, though he later left his job at a risk management consultant.

In a statement Wednesday, KPMG spokesman Russell Grote said the firm “is honored to partner with the State of Illinois to objectively score applications based on criteria set by the state with a diverse and well-qualified team.”

“We are proud of our team’s performance,” Grote added.

As the outrage boiled over last year, applicants called the scoring process into question through a series of lawsuits, including one filed in Cook County that named KPMG as a co-defendant. Feeling the heat, Gov. J.B. Pritzker announced in September that dispensary applicants were getting a chance to fix their applications and challenge their scores.

That announcement turned out to be a coup for KPMG. Late last month, as KPMG’s total payout was being substantially increased, Pritzker spokeswoman Charity Greene said the firm would stay on to re-score the dispensary applications to “prevent further delays that could be caused by onboarding a new vendor.”

While officials have issued the latest round of notices detailing specific application issues than can be remedied by hopefuls for the cultivation, infusion and transportation licenses, the process for issuing dispensary licenses is still on hold.

Greene on Wednesday said the deficiency notices for those licenses would be sent “in the coming days,” echoing a previous statement from Jan. 26.