Michigan company sues Illinois’ new cannabis law

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Sozo Illinois Inc., which applied for dispensary licenses, filed a lawsuit in federal court, citing a layout in the request which gives Illinois residents five bonus points unfairly discriminates against the company and violates federal and state laws ensuring due process and equal protection. The company also said it was unfairly excluded from one of the three lotteries that will be used to distribute the licenses, aimed at a legislative solution to one of the most controversial provisions of the licensing process.

This is just the latest twist in a process of adding new marijuana businesses that has taken longer than expected. The original law aimed to diversify white male ownership of the new legal weed industry by licensing “social equity” applicants from neighborhoods hard hit by poverty, crime, violence and imprisonment linked to the war on drugs.

One of the ways to achieve social equity status, which included a 20% bonus in scoring applications, was for a candidate to hire 10 people who lived in areas disproportionately affected by the war on human rights. drugs or who had been arrested or imprisoned for possession of marijuana that was no longer a crime. It has been derided as the “slave master’s clause”.

The process of issuing the first 75 licenses for new marijuana stores has been criticized because it resulted in a tie between 21 candidates who achieved perfect scores, some of whom appeared to have tenuous ties to the communities the law was designed for. to help. The legislature decided that candidates who failed to win the first 75 licenses would be eligible for two lotteries for every 110 additional licenses to be distributed this year. Candidates like Sozo, who achieved social equity status through employment, were excluded from the second of the two lotteries.

“It is fundamentally unfair and it prejudices candidates like Sozo,” said the lawsuit.

Sozo is however likely to qualify for one of the three lotteries.

The company is headquartered in Warren, Michigan, where it has marijuana growing and retailing operations. It is led by Aaron Rasty, a former Chicago entrepreneur who started Bluestar Energy Services, an independent electricity supplier with 23,000 customers who was acquired in 2012 by American Electric Power for an undisclosed price.

The company claims in its lawsuit that it spent more than $ 350,000 to employ Illinois workers to maintain its social equity status. This demonstrates how far applicants are willing to go to obtain dispensary licenses, which can be valued at $ 10 million or more. The lawsuit, one of many that have been filed, shows that companies are willing to spend money to protect these investments.


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