Illinois Sued Over Social Equity Licensing

Cannabis company Sozo Illinois Inc. has filed a lawsuit claiming a new law signed last week, which expands opportunities for social equity applicants, lowers their chances in an upcoming retail cannabis license lottery.

Full story after the jump.

Michigan-based cannabis company Sozo Illinois Inc. has filed a lawsuit claiming a new law signed last week by Gov. J.B. Pritzker (D) lowers their chances to receive a retail cannabis license in an upcoming lottery, the Chicago Tribune reports. The company claims the new law, which requires an additional license lottery in order to expand opportunities for social equity applicants, has harmed their business by including a residency provision and removing a portion that gave bonus points for hiring employees from “disproportionately affected” areas.

In the lawsuit, Sozo claims state favoritism violates the federal interstate commerce clause, citing similar rulings in other states, according to the report. Additionally, the firm says they spent $300,000 on hiring, trained 11 social equity employees, and spent an additional $55,000 on application fees for 11 licenses in preparation for the law’s passage. Eight of the employees were hired through a South Side Chicago community assistance program and another three at a job fair at Community Life Center in Chicago, according to the report.

The lawsuit could delay the state’s upcoming license lottery scheduled for July 29. The lottery is the latest attempt by Illinois officials to fix social equity in the adult-use cannabis system after a delay of more than a year due to the pandemic and delays related to social equity fixes. The reforms were demanded after the state only awarded 21 licenses to mostly white, well-connected, applicants in late 2020. The latest lottery will award 110 licenses, the Tribune reports.

State officials have not commented on the lawsuit.

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