Legal Fight Ensues Over State's Medical Marijuana Licenses

A lawsuit filed in Cook County Court pits a losing applicant in the Illinois Medical Marijuana derby, against the State Department of Agriculture, and indirectly, the biggest winner in the sweepstakes for the coveted licenses.

“In my world, they changed the rules,” says Andy James, chairman of PMRX, the unsuccessful bidder on a cultivation license in District 21. “We had to file a lawsuit to get any information. Nobody’s talking.”

At issue, is the fact that PMRX lost out to Cresco Labs, a seeming marijuana juggernaut which received the three highest scores in the contest for what promise to be lucrative licenses to grow medical pot in Illinois. The suit contends the state changed the security scoring rules at midstream, converting to pass/fail what had been a numerical score which could have spelled the difference between applicants with close ratings.

“We’re not sure the implementation of the process, i.e. the scoring, was done pursuant to the rules,” James said. And he said one of the reasons for his lawsuit, was to see his own scores, which so far, have been kept confidential.

“Can you imagine a history class, and the only person who gets a grade is the person with the highest score?” he asked. “No sour grapes here. Sure we would have loved to have won the license. But when you spend the money we spent, would just love to know that it was done correctly or fairly.”

James also alleges that someone from Cresco met with then-governor Pat Quinn while the application process was unfolding.

“All we know is there was a dinner meeting,” he said. “Somebody with Cresco was seen having dinner with Quinn.”

A Quinn spokesman denied the suggestion that the former governor had met with anyone.

“Governor Pat Quinn did not have any meetings with any medical marijuana applicants to discuss their licensing applications,” the spokesman said. “Furthermore, Governor Quinn had no involvement in the scoring and evaluation of applicants in the Medical Cannabis Pilot Program.”

The Quinn statement took a veiled shot at his successor, suggesting there had been a rush to judgment on issuing medical marijuana licenses.

“In January 2015, after Governor Quinn left office,” the statement said, “the Rauner administration issued medical marijuana licenses to cultivation centers and dispensaries, without subjecting applicants to an FBI background check as required by law.”

Indeed, those checks are only now being performed.

A Rauner spokesman acknowledged the flaws in the program, but in a political tit-for-tat, suggested it was Quinn who should take the blame for any deficiencies which the lawsuit uncovers.

“We understand and acknowledged that the process the Quinn administration applied would likely expose the State to significant and costly litigation,” the Governor’s office said in a statement. “We believe the steps we took to fix the errors in the Quinn selection process reduce, but cannot entirely eliminate, the risk of litigation.”

“We will fully participate in any judicial review of the selection process, and comply with any orders issued by a court,” the statement said.

In their own statement, Cresco insisted it had done everything by the book.

“We are not going to comment on the efforts of a company that is attempting to achieve in court what it failed to do with the State,” the statement said. “Cresco Labs submitted comprehensive and thorough applications exceeding all of the State’s very stringent requirements, and we stand behind our applications.”

A Rauner spokesman insisted the security components of the applications were not scored pass/fail.

The lawsuit also alleges that Cresco’s consultant, Kayvan Khalatbari of Denver, Colorado, has boasted of his own illicit drug use in the past, including crack and meth.

“If you’re really doing a character and fitness, and you want people to do things the right way,” he said, “this guy’s probably not your guy!”

As far as his company is concerned, James says he only wants proof that he was beaten fair and square.

“Our application was 5,000 pages,” he said. “We spent a million bucks on our application.”

“I just want to know that we were treated fairly. If we lose, we lose, and move on.”

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