Michigan-Owned Company Sues Illinois Over Revised Cannabis Licensing Regulations
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Michigan-Owned Company Sues Illinois Over Revised Cannabis Licensing Regulations

Sozo Illinois, Inc. argues that the latest change to the licensing process discriminates against out-of-state operators and violates the commerce clause of the U.S. Constitution.

July 20, 2021

Sozo Illinois, Inc., whose parent company operates vertically integrated cannabis operations in Michigan, has sued Illinois over the state’s revised cannabis licensing regulations, which Gov. J.B. Pritzker unveiled July 15.

Under the revised licensing plan, Illinois will hold a series of lotteries in late July and early August to award 185 new cannabis dispensary licenses to social equity applicants.

The new licensing rules give priority to social equity applicants who are majority-owned by people from communities deemed disproportionately impacted by the war on drugs, which deviates from the state’s initial regulations that allowed applicants to commit to hiring a certain number of employees from these communities.

In its lawsuit, Sozo said that it structured its business and prepared its application under the initial rules that allowed the company to qualify for a license by employing a certain number of individuals from disadvantaged communities, and argued the change in regulations has now made it impossible for Sozo to qualify for a license.

Sozo alleges in its complaint that Illinois’ new rules discriminate against out-of-state operators and violate the commerce, due process and equal protection clauses of the U.S. Constitution, according to a Law 360 report. The company is seeking a temporary restraining order, as well as preliminary and permanent injunctions that prevent the state from moving forward with its latest licensing plan.