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Illinois to hold an extra license lottery for applicants unfairly kept out of chances for marijuana retail shops

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To address more errors in the process of awarding cannabis licenses, Illinois will hold an extra lottery to give six applicants another shot at winning a license to operate recreational marijuana retail stores, officials announced Friday.

The applicants were wrongly denied chances in the first of three lotteries held this summer to award 185 new licenses, officials said. The additional licenses are to be authorized by state law that allows up to 500 new licenses in all. The applicants aren’t guaranteed licenses, but the digital lottery is supposed to re-create what their odds of winning should have been originally.

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A “clerical oversight in terms of data entry” led to the mistakes, said Toi Hutchinson, senior adviser on cannabis to Gov. J.B. Pritzker. It’s the latest in a series of errors that have delayed the awarding of licenses by more than a year.

The development comes as the state announced its list of 51 winners from Lottery 1, Lottery 2 and Lottery 3. But seven pending court challenges to the process could still affect the final outcome. In one case, Cook County Judge Moshe Jacobius has ordered the state not to award any of the licenses until he rules on one case before him, in which applicants challenged the applicant scoring process.

Out of 937 businesses that submitted 4,518 applications submitted last year, just 21 applicants earned perfect scores on their applications to qualify for an initial lottery. Losing applicants objected and filed suits, claiming the scoring by consultant KPMG gave different scores for identical application information, among other problems.

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In response, the state passed a law creating two additional lotteries in which applicants qualified by scoring 85% or better. Nevertheless, some applicants complained that the process unfairly favored white, politically connected, wealthy applicants by allowing unlimited applications for those who could pay the $5,000 fee for each application.

Hutchinson acknowledged the industry is almost completely white-owned, but said Illinois is doing better than any other state in getting new licenses to minority applicants. Of 79 new licenses awarded to cannabis craft growers, infusers and transporters in August, 43% went to black-owned firms, she said.

At each step on the way, as regulators discovered errors, they acted to correct them, Hutchinson said, describing the process as a marathon, not a sprint.

“It’s been painful to watch how long this has taken,” she said. “As we move forward, this could get better every single year.”

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