Over the last several months, Illinois seemed as though it were becoming a paragon of legal cannabis and social equity within the industry. Unfortunately, a complete lack of transparency and communication has left many cannabusiness owners down and out.
Although this situation will inevitably turn into a lengthy legal battle, it isn’t all bad. The mistakes made in Illinois expose where social equity programs fall short. As a result, other states can learn from these mistakes and implement more successful programs in the future.
Here’s everything you need to know about the straight-up blunder that’s happened in Illinois and how you can recover if you’ve been affected.
Social Equity Programs Looked Bright in Illinois
Ideally, we wouldn’t have to discuss this issue — better yet, we’d be talking about how successful Illinois’ program was. Instead, we’re forced to focus on where it all went wrong. But if you’re still curious to know what a best-case scenario would’ve looked like, we’ve got you covered.
In a perfect world, all applicants would have submitted their applications to be independently scored by a private entity — in this case, KPMG International. KPMG would have blindly reviewed all submissions and sent “Notices of Deficiency” informing applicants of any operational changes they needed to make in order to be approved.
By showing social equity candidates exactly what to fix, this process would have leveled the playing field for them. In fact, one-fifth of the application consisted of questions designed to determine social equity status and give an inherent boost to such applicants.
Once the approval process had been completed, all successful applicants would have been entered into a random lottery. Subsequently, 75 dispensary licenses would have been promptly awarded.
Unfortunately, we don’t live in a perfect world, and that’s not at all what really happened in Illinois.
Applicants Pay the Price for a Grossly Mishandled Process
Illinois’ social equity program should have been transparent and successful. Rather, the entire process has turned into an opaque, suspicious fiasco for which applicants have paid the price.
KPMG was awarded a $4.2 million no-bid contract by Illinois to score social equity applications. In another exclusive deal, KPMG was awarded $2.5 million to score an additional 80 agricultural applications. The contract required applications to be scored anonymously as well as Notices of Deficiency to be sent to all unapproved applicants.
However, the majority of unapproved applicants didn’t receive their Notice of Deficiency. Moreover, the ones who did receive a notice received it directly from KPMG. This means that KPMG had access to the identities of all applicants and that the process couldn’t possibly have been carried out blindly.
In the end, only 21 out of more than 900 applicants were entered into this 75-license lottery. Many of these 21 applicants represent large, multi-state operations rather than social equity candidates for whom this process was intended.
To make matters worse, one of the 21 approved applicants is an employee of KPMG.
We may not yet understand how this fits into the whole narrative, but we do know that it’s a blatant conflict of interest. Furthermore, the lack of anonymity in the scoring process raises some serious questions about how this applicant was approved when hundreds of others were not.
All Is Not Lost for Social Equity in Cannabis
In the face of this debacle, all is not lost. Luckily, there’s still hope for social equity candidates both in Illinois and around the country. Politicians, local governments, and affected applicants all have the power to improve their own situations as well as those of their communities.
What Political Candidates Can Do
For political candidates running on the platform of legalizing cannabis, it’s crucial to know what you’re getting into. The legal cannabis industry isn’t as easy as it looks. Doing it right is incredibly difficult, but that’s how it must be done. If you’re running on this platform, look for experienced consultants to help you do so.
What Local Governments Can Do
Local governments can make or break cannabis programs. In order to ensure the success of legalization and social equity efforts, governments should work with organizations that are involved and experienced in the cannabis industry.
For instance, here at Higher Yields Cannabis Consulting, we’ve built an elite team of experienced cannabis professionals. Just take a look at Erik Range, our DEI Engineer and Minority Cannabis Consultant!
What Affected Cannabusinesses Can Do
For anyone affected by the social equity program in Illinois, we understand that this is a stressful time for you and your colleagues. We’re here to help. At Higher Yields Cannabis Consulting, we have a team of experts who will help your cannabusiness get back on its feet. Ask us about our Pivot Program designed specifically for cannabis businesses who have been affected by lost license applications and changing policies.
Contact us today to schedule a free consultation today and learn more about how we can help.