New Court Order Puts Illinois Craft Grow Cannabis Licenses On Hold Again
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New Court Order Puts Illinois Craft Grow Cannabis Licenses On Hold Again

Winnebago County Associate Judge Stephen Balogh issued an order June 6 that bars all craft grower licensees from operating until new litigation is resolved.

June 15, 2022

Illinois officials awarded 48 new craft grow cannabis licenses earlier this month, after a lengthy delay sparked by litigation from unsuccessful applicants, but the licenses are now on hold once again under a new court order.

Winnebago Associate Judge Stephen Balogh issued a temporary restraining order June 6 that bars all craft grower licensees from operating until new litigation is resolved, according to the Chicago Tribune.

The order says that “all craft cannabis licenses are locked in place and can’t start operating by Defendants issuing preconstruction permits, security plan approvals, site plan approvals, final construction approvals, label/packaging approvals, granting extensions to the operational requirements, or any other affirmative action that would permit craft growers to operate,” the news outlet reported.

Balogh’s order covers all craft grower licenses, according to the Chicago Tribune, including not only the 48 issued this year, but also 40 that were awarded last summer.

Balogh issued the order last week after a hearing that was not attended by representatives of the state or the craft grower licensees, according to the news outlet.

The order stems from a lawsuit filed June 3 by Sustainable Innovations Inc. and 11 other craft grow license applicants. The suit names the Illinois Department of Agriculture (IDOA) and its director, Jerry Costello II, as defendants, the Chicago Tribune reported.

The lawsuit challenges the IDOA’s changes to the craft grow licensing process, which the plaintiffs allege violated the state law that authorized the licenses in the first place, according to the news outlet.

For example, the plaintiffs claim that while the law allowed applicants to qualify for “social equity” status by hiring employees from areas designated as most impacted by cannabis prohibition, state officials then changed the rules to allow social equity applicants to lay off those employees while they waited for the state to issue the licenses, the Chicago Tribune reported.

The lawsuit also challenges the bonus points that the state awarded to veterans in the application scoring process, according to the news outlet.

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The plaintiffs allege that they will suffer “irreparable harm” if they do not secure licenses and claim their lawsuit has “a likelihood of success,” according to the Chicago Tribune.

Balogh’s order claimes that the defendants were given notice of the hearing and failed to appear, and the Illinois Attorney General’s office confirmed that it was an “ex parte” ruling with only the plaintiffs present, although officials did not give a reason for not attending, according to the news outlet.

The Attorney General’s office has filed requests for Balogh to reverse the temporary restraining order and dismiss the lawsuit, arguing that the state’s lawyers were not properly notified, the court does not have jurisdiction in the case and the plaintiffs are “highly unlikely” to win, the news outlet reported.

The state’s lawyers also claim that the plaintiffs do not face irreparable harm because the state can allow them to obtain licenses through judicial review, according to the Chicago Tribune.

The IDOA issued the first round of craft grow licenses in August 2021, and state law required the department to award the second round of licenses by Dec. 21, 2021.

In response to litigation filed by unsuccessful applicants, Sangamon County Judge Gail Noll and Cook County Judge Neil Cohen ordered that the additional licenses could not be awarded until the litigation was settled, ultimately stalling the licensing process while the lawsuits moved through the legal system.

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A judge lifted that injunction in March, allowing the IDOA to proceed with issuing the second round of licenses, which were awarded June 1.