City Council stalls mayoral plan to relax marijuana zoning restrictions, shrink downtown exclusion zone

Mayor Lori Lightfoot’s plan to shrink the downtown “exclusion zone” to a sliver and relax zoning requirements for cannabis businesses all over Chicago hit a roadblock Tuesday, stalling efforts to help minorities who have been shut out of the so-called “green rush.”

The City Council had been poised to streamline the zoning process to attract an avalanche of “social equity” applicants — a designation created by the state to try to diversify the lily-white weed industry.

But aldermen Anthony Beale (9th) and Ray Lopez (15th), Lightfoot’s two most outspoken Council critics, used a parliamentary maneuver to postpone the vote until the next City Council meeting.

Lightfoot promptly declared that she would call for that vote at Monday’s Council meeting, when she plans to present her 2022 budget and deliver her annual budget address.

Lightfoot introduced the sweeping zoning changes in July, only to make a series of changes to appease aldermen determined to give minorities a piece of the lucrative pie.

The changes were not enough to satisfy Beale.

Arguing that “over 40%” of social equity applicants are “fronts” and actually white-owned, Beale urged his colleagues to keep Chicago’s onerous zoning restrictions in place until the state-created designation truly benefits Blacks and Hispanics.

“We should opt out until they fix this. You have social equity people that are selling their licenses. They’re fronts. Until that process is vetted, we’re still going down the wrong path when we’re trying to obtain the goal of having people of color be part of the cannabis industry,” Beale told the Sun-Times before the meeting.

“Why should we continue to give people that are not of color cannabis licenses while we’re trying to fix the process? Fix the process and then roll it out. If you keep allowing the people to have [a] two-, three-, four- or five-year head start, you’ll never get a piece of the pie.”

Top mayoral aide Will Shih has blamed onerous zoning restrictions for limiting the number of Chicago dispensaries to 18 out of 110 statewide and the number of marijuana stores in the city to seven, even though five times that many could have opened here.

“Dispensaries and cannabis businesses chose to go to the suburbs, instead of staying in the city,” depriving Chicago taxpayers of $13.5 million in potential marijuana revenues, Shih told aldermen last week.

In addition to opening up far more properties for cannabis operators to call home, the mayor’s plan would eliminate the city’s seven cannabis zones and their underlying license caps and do away with a related zoning lottery.

It would most notably open up a large portion of the downtown area to weed sales, hacking away at an “exclusion zone” Lightfoot previously fought for and defended.

“We’re not turning Michigan Avenue into pot paradise,” Lightfoot famously declared in January on the day downtown Ald. Brendan Reilly (42nd) introduced an ordinance that would have nixed the zone altogether.

The downtown exclusion zone currently stretches from Division Street to the north, Van Buren to the south and Lake Michigan to the east. The western boundary is State Street in River North and the south branch of the Chicago River in the Loop.

The new proposal would cut off sales from Division to Van Buren between State and Michigan, with the no-pot zone extending to 16th Street on Michigan. Sales would also be prohibited from Ohio to Illinois streets between Michigan and Navy Pier.

Reilly said his “preference” would have been to “eliminate the exclusion zone altogether.” But he called the new, narrower exclusion zone a “fair compromise,” noting Lightfoot “may have preferred to expand it.”

“The city grossly discounted the revenue upside from local cannabis taxes when we first had this debate. Now that we’ve seen the potential, it’s time to embrace this industry and ensure taxpayers reap the benefits,” Reilly wrote in an email to the Sun-Times.

“Every dollar we glean from cannabis revenue is one less dollar collected on your property tax bill. We shouldn’t leave revenue on the table — we need to embrace the cannabis tourism economy emerging on the West Coast and own that space. What better way to do that than open greater swaths of downtown to potential cannabis licenses held by social equity applicants? I see that as a real win-win.”

The state’s efforts to issue new cannabis licenses, namely those for pot shops, continue to be mired in controversy and uncertainty.

Nevertheless, the city is moving swiftly to make changes to accommodate the designated winners of 185 upcoming dispensary licenses. Those licenses can’t yet be issued due to a judge’s order in a pending Cook County lawsuit.

It’s not the first time a mayoral plan to regulate the marijuana industry has caused political tension.

In December 2019, the Council’s Committee on Contract Oversight and Equity voted 10 to 9 to delay recreational marijuana sales for six months to give African American and Hispanic entrepreneurs shut out of Round One a piece of the pie.

The following day, Lightfoot killed the six-month delay by a vote of 29 to 19 in a tense test of her Council muscle that uncomfortably pitted her against members of the Black Caucus.