2 more Illinois companies sue state over cannabis licensing process

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Two companies applying for cannabis business licenses in Illinois filed a lawsuit against regulators, claiming the lottery system for awarding permits is unconstitutional, biased and does not meet the state’s goal to promote social equity in the industry.

According to Law360, the plaintiffs, Champion Investments IL and Fox River Gardens, filed the suit in Illinois state court against the Department of Financial and Professional Regulation as well as Bret Bender, the agency’s deputy director.

The lawsuit alleges that the state did not offer priority access for social equity applicants during marijuana retail store licensing and that the process that was implemented subverted the purpose of the program designed to award the permits.

The plaintiffs allege that their due process and equal protection rights set under the Illinois and U.S. constitutions were violated, Law360 reported.

They are seeking a ruling that the dispensary licensing regulations, rules and process are unconstitutional and invalid.

Lawsuits brought by those who don’t succeed in winning licenses are common in the cannabis industry, and many marijuana permits in markets across the country have been won through such lawsuits.

But Illinois has been mired in litigation over its marijuana licensing process and its social equity program, which was intended to improve upon similar efforts in other states.

The lawsuit by Champion Investments and Fox River Gardens is the latest in a long list of legal actions taken by would-be marijuana companies in Illinois.

In September, three companies sued Illinois’ cannabis regulators, alleging their applications for cultivation and transportation permits were wrongly rejected or that they weren’t given an opportunity to rectify errors in their applications.