A free-market think tank said Illinois lawmakers should make the state’s adult-use cannabis industry more equitable by lifting the limits on how many licenses are available.
About 700 businesses applied to get one of the 75 licenses available in the state’s upcoming license lottery, which was delayed by more than four months. Of the 21 entities that made it through to the lottery that could lead to a coveted cannabis business license, more than half are owned by people of color, state officials said.
Gov. J.B. Pritzker said this week that the outcome was not perfect. He said it would take time to ensure the licensing process is as inclusive as possible. The governor and state lawmakers repeatedly promised in 2019 that Illinois’ cannabis law would be equitable.
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“We also know that there will be changes and fixes along the way,” Pritzker said. “There are about 400 other licenses that will be awarded.”
Reason Foundation’s Director of Drug Policy Geoffrey Lawrence said one fix to make things more equitable would be to remove the limit on the number of available licenses.
“We’ve seen in other states that cap the number of available licenses there’s been charges of corruption from people trying to buy off the regulators and game the system to get higher scores,” Lawrence said.
Lawrence said a free market would regulate how many cannabis businesses customers would support and would keep prices down and provide more choice for consumers.
The Chicago Tribune reported two applicants not included in the lottery filed a lawsuit against the state. The Chicago Sun-Times reported an employee from a company hired by the state to score applicants had connections to one of the applicants in line for the lottery.
The latest sales figures from July show nearly $61 million of adult-use cannabis was sold in Illinois. The governor’s cannabis regulation oversight officer, Toi Hutchinson, said consumers in Illinois have an appetite for cannabis.
“The sales of this have been through the roof in the middle of a global pandemic, which is targeted toward those very communities that are disproportionately impacted,” Hutchinson said.
While 35 percent of the cannabis tax revenue goes to the state’s general revenue fund, a quarter of every cannabis tax dollar will go to nonprofit community groups in specific regions of the state that were disproportionately affected by the war on drugs.
Anita Bedell, the executive director of Illinois Church Action on Alcohol and Addiction Problems that opposed cannabis legalization, said the 20 percent of revenue going to pay for substance abuse and mental health services might not be enough to counter the negative effects of the drug being legal.
“The money that they put there is not going to be enough to solve the problems, especially the mental health issues and adolescent use,” she said.
Ten percent of the state’s cannabis tax revenue will go to the state’s backlog of unpaid bills, 8 percent to local law enforcement and 2 percent for public cannabis education and safety campaigns.
Cannabis Tax revenue from August was more than $19.1 million, which is $5.3 million more than the month before and nearly double the cannabis tax revenue from in January. In total since January, the state has collected $86 million in cannabis taxes.
Beginning July 1, municipalities that approved a local sales tax can tack on up to 3 percent in recreational cannabis taxes to spend as local elected officials see fit.
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