Marijuana dispensary rollout illustrates fears that social equity measures are just blowing smoke

As legalization looms, Chicago’s Black Caucus voices concerns that the emerging recreational pot industry is rigged for white operators.

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File photo by Stacey Rupolo

Aldermen David Moore (left) and Jason Ervin have criticized the lack of African American representation among the first marijuana dispensary operators granted licenses ahead of legalization across the state.

Time and again, politicians from around Illinois have touted social equity measures written into law as a means of ensuring those unfairly impacted by the war on marijuana will actually be able to profit once it’s legalized for adult recreational use on Jan. 1.

But as the big day looms, Chicago’s Black Caucus still has its doubts, especially considering the turnout of last week’s dispensary license lottery, which allowed dispensaries who currently had an Illinois medicinal cannabis license to open another location in one of the seven designated zones for cannabis businesses.

“It was white and male because all of the medicinal dispensary owners are white and male,” said the chairman of the caucus Ald. Jason Ervin (28th) after Wednesday’s City Council meeting. “They were given a first pass or first crack at having two locations and they didn’t have to jump through the hoops anybody else did in order to order to make that happen.”

Last week, photos of what appeared to be a mostly male and mostly white crowd at the lottery quickly gobbling up downtown, North Side and West Loop locations reinforced the concerns caucus members have expressed for weeks: that the first profits from legalized marijuana will land exclusively in white pockets. If black applicants don’t have equal footing on day one, it may be too little too late for them to actually take part in the rollout of the emerging industry, Black Caucus members feared.

Only companies already in possession of a state license were eligible for last week’s lottery. The zones will allow a max of seven shops in each cannabis district until May 1st when the limit could be raised to fourteen. Licenses will later be granted to those who don’t have a foothold in the medicinal game in Illinois, including social equity applicants.

The caucus originally raised concerns at an October committee meeting finalizing regulations for the seven cannabis zoning districts, where they even proposed creating an ordinance that would’ve halted sales until July 2020.

At that time, Ald. David Moore (17th) called the process “a banana in the tailpipe” of equity.

“This is a once-in-a-lifetime opportunity for us to get this right,” he told Crain’s. “When day one there’s no African Americans opening up a dispensary, that’s not equity.”

Despite hours of debate, the zoning regulations were eventually approved last month. Friday’s lottery pushes that banana deeper as black entrepreneurs may only have a shot at entering the industry through social equity measures, the caucus fears.

In addition to those fears, the lottery showed a lack of enthusiasm to make recreational marijuana accessible to South Side residents. During the lottery, envelopes containing company’s names were selected randomly from a bingo-style drum.

The first locations chosen were in majority-white areas. Only two companies with an early choice in the lottery passed on choosing the downtown cannabis district. A South Side district wasn’t chosen until the 21st out of 31 picks, according to the Chicago Sun-Times.

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“We’re just concerned what their vision of social equity looks like versus what we believe the community’s vision of social equity should look like may differ,” said Ervin. “We have some concerns about what the ultimate results will look like based on what we see now [and] based on the qualifications that allow someone to qualify as a social equity applicant.”

The complete pool of budding entrepreneurs looking to get into the emerging recreational marijuana industry is not publicly known. Freedom of Information Act requests filed by The Chicago Reporter for marijuana license applications have been denied citing confidentiality exemptions built into the Cannabis Regulation and Tax Act.

The act includes fee waivers and a special fund for loans and grants meant to give a boost to those formerly incarcerated for cannabis-related offenses and residents of areas heavily targeted for cannabis arrests — coined social equity applicants — looking to get into the business. 

If approved, applicants are eligible for reduced license and application fees and low-interest loans. They also receive 50 points — out of 250 — on their license application score and technical assistance and support from the Illinois Department of Commerce and Economic Opportunity for creating a business plan and applying for a license.

Black constituents’ enthusiasm hasn’t quite matched the caucus’s, Ervin said.

“I think that the reality is people just don’t know, right? Because they haven’t seen it play out,” he said.“In the city of Chicago to see 40 locations go and there’d be no African American participation, that’s a problem.”

While vague on specifics, Ervin said he’s currently working with Ald. Carrie Austin, chairperson of the Committee on Contracting Oversight and Equity, and the Lightfoot administration “to see what we can do to help change that now. And we hope to see something different going forward on this issue.”

What constituents have been vocal about is “enforcement activities,” he said.

No smoking on premises

Earlier this month, public housing residents hoping to toke up at home when the new law takes effect were hit with more bad news when the Chicago Housing Authority sent out notices to voucher holders reminding them that using or possessing marijuana is considered “illegal activity” under federal law, making it illegal on federally-subsidized property. 

Similar notices will be sent out to public housing residents soon, according to the CHA.

“The CHA can TERMINATE all assistance … if you, a member of your household, or a guest or person under your control is found engaging in drug-related criminal activity, including the use and/or possession of marijuana for medical or recreational purposes,” reads the notice obtained by the Chicago Sun-Times.

The CHA plans to work with the City as it develops rules and regulations in accordance with existing state and federal laws in order to ensure a safe and responsible implementation of legalized cannabis, the CHA said in a statement.

Mayor Lori Lightfoot has said she’s sympathetic to the Black Caucus’s demands, but believes the place to solve those concerns is Springfield, not Chicago. 

About a week ago, the mayor introduced her own ordinance, which would decriminalize small amounts of cannabis, reduce the penalties and fines for unlawful possession and change the Chicago Police Department’s enforcement policies. The efforts would align the city’s regulations with the Illinois Controlled Substance Act, according to a press release.

“For far too long, unjust and outdated cannabis enforcement laws have adversely and disproportionately affected Chicago’s black and brown neighborhoods,” Lightfoot said in a press release. “The legalization of cannabis in Illinois presents a powerful opportunity to reform our policies and right these generation-old wrongs of the past as we work to ensure a safe, fair and responsible implementation in Chicago.”

Previous regulations fined residents between $250-$500 for first time minor offenses (unlawful possession of less than 30 grams) and $500 for any second offense within 30 days. The fine for first time offenses would be $50 and $100 for second offenses, according to the press release.

The proposed ordinance would also rewrite current laws, which requires the city impound a vehicles if cannabis is discovered inside. While officers would still be able to initiate investigations such as smoking in public or a car, the ordinance would overhaul the department’s enforcement protocols, the release said.

Ervin said the ordinance is “designed to ease” some of the concerns raised by the federal policy in federally-funded housing, but obviously can’t satisfy everyone.

“Can we say that that’s going to be an end all, be all, cure all? No, it will not. Because again, we are still having members of our community saying that they want certain enforcement activities,” he said.

If the ordinance is approved, it would be implemented on Jan. 1.