Cook County judge puts hold on pot-growing license for business amid questions

A Cook County judge put the brakes on one part of the state’s medical marijuana program, for now.

Circuit Judge Kathleen Kennedy granted a temporary restraining order Wednesday preventing the state from officially licensing a medical marijuana growing farm in the Kankakee area after a company that lost out on the permit sued the state.

Kennedy’s decision, in what could be a landmark case in Illinois, may have statewide implications, lawyers involved in the medical marijuana industry said.

“Can we now anticipate a rash of additional lawsuits . . . filed by every dispensary applicant and every cultivation applicant who was unsuccessful?” said attorney Brian Rosenblatt.

“The reality is this case opens up a tremendous can of worms for the entire industry in Illinois,” he said.

Alice Keane, an assistant attorney general representing the state in the case, said the Illinois Department of Agriculture will appeal the temporary order.

But for now, it must prepare to hand over to PM Rx, the company suing the department, highly sought-after documents.

In this case, as part of discovery privileges granted in a legal proceeding, the Department of Agriculture must provide PM Rx’s lawyer, John Rooks, with the applications submitted by five companies that sought to grow medical marijuana in the area that includes Kankakee, the judge ordered.

Other companies that applied for the permits — which are granted by geographic districts, including the Illinois State Police district boundaries — have attempted to see how the winners of the limited licenses were chosen. They have sought similar documents using the Freedom of Information Act, but have been denied because the state claims the documents are confidential by law, attorneys said.

“In the 20 other districts, people are going to want to get their information and it’s going to encourage more lawsuits,” attorney Adam Fayne said.

In the case at hand, PM Rx claims the state “failed to score the applications in a ‘fair and unbiased manner,’ ” according to the lawsuit filed last week.

And it wants to know whether the winning company, Cresco Labs LLC, was in fact the highest-scoring applicant in Illinois State Police District 21 based on the state’s requirements. Cresco also has been awarded two other marijuana farming licenses in other state districts that are not challenged in this lawsuit.

Rooks, the attorney for PM Rx, claims the state didn’t follow its own application requirements when determining Cresco as the winner.

For instance, Rooks said the state did not complete background checks before deciding who would be granted the licenses.

“The background check is part of the application process,” Rooks told the judge.

He later added, “The stones were not overturned.”

Keane, the state attorney, told the judge some background checks have been completed and now the state is working with the FBI to finish the inquiry.

Onlookers worry that this lawsuit, and any that might follow, will hold up an already delayed program that, for now, is only a pilot program set to last until the end of 2017. There are sick people to think about, some said.

On Wednesday, the state said 1,600 patients have been approved to use the product.

“At the end of the day we want to see a successful pilot program that can be extended into a permanent program so as to maximize the benefits to those patients who can be helped by the compassionate cannabis act,” Rosenblatt said. “We would prefer not to see a rash of frivolous lawsuits over sour grapes, but at the same time, if there are entities that have prevailed in the application process that are not the best suited to either cultivate and produce or to dispense the medical marijuana, then perhaps the process should be looked at more carefully.”

In a statement, Cresco said, “The delays in the process ultimately hurt the Illinois patients who are waiting for this medical treatment. It is disappointing that they have to suffer while the legal maneuvering runs its course. Cresco Labs put forward the three best applications in the state, and we stand by our applications.”

The judge’s decision, for now, temporarily prevents the state from moving forward, but Rooks and his client ultimately want the judge to oversee the re-scoring process to know who is the highest-scoring applicant in the Kankakee area.

PM Rx said in a statement, “People throughout the state have invested a lot of time, energy and resources into this with the hopes that we would all be operating on a level playing field. In a state known for its past of questionable ethics, we hope our leaders take this opportunity to reaffirm the state’s integrity and transparency.”