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New Lawsuit Says Illinois Cannabis Regulators Discriminated Against Out-of-State Dispensary Applicants

Update from David Ruskin “This Friday (4/22/22) should be a telling day in the saga of Illinois cannabis licensing delays, as there are hearings scheduled in both the State court dispensary lawsuit (Judge Gamrath) and the Federal court residency discrimination lawsuit (Judge Pallmeyer). In a cruel twist, the State hearing in the morning could result in an order lifting the stay on the issuance of the conditional dispensary licenses, to then be followed in the afternoon by the Federal court ordering a new stay on issuing the conditional licenses pursuant to the request for injunction in that case. Stay tuned for the important updates”.

Full Article from Cannabis Business Times:

In the latest of a string of lawsuits challenging Illinois’ process to issue 185 new adult-use cannabis dispensary licenses, two plaintiffs allege that the state unconstitutionally discriminated against out-of-state residents. The plaintiffs, Juan Finch Jr. and Mark Toigo, are seeking a court order to block the Illinois Department of Financial and Professional Regulation (IDFPR) from issuing the licenses, which the department allocated during a series of three lotteries last summer but has not yet officially awarded, reported. .

“[The agency’s] discrimination is not narrowly tailored to serve a legitimate local purpose,” the lawsuit claims, according to the news outlet. “This discrimination, in fact, has no legitimate local purpose at all, and the stated rationale in the [Cannabis Regulation and Tax] Act for awarding particular benefits to social equity applicants—i.e., to remedy harms resulting from disproportionate enforcement of cannabis-related laws—applies equally to Americans in all states, and thus can be achieved without discriminating against nonresidents.”

The complaint, filed March 23, also seeks to block the IDFPR from providing preferential treatment to Illinois residents in the licensing process, reported. Finch is a Chicago resident and active-duty Navy sailor who was living in California when he applied for a dispensary license in Illinois in 2019, according to the news outlet, while Toigo is a cannabis investor from Pennsylvania who said he ultimately decided not to apply for a license because he thought it would be “futile.”

Toigo sued state officials in Missouri last year over the residency rules in that state’s medical cannabis program, reported, and won a favorable ruling in November when a judge overturned the requirement that cannabis licensees must be majority owned by those who have lived in Missouri for at least one year.

In Illinois, the Cannabis Regulation and Tax Act that legalized adult-use cannabis in the state mandates that to get a perfect score, applicants’ businesses must be majority owned by Illinois residents and veterans, according to

Initially, only applications with perfect scores were included in the lotteries held to award the licenses, but after several unsuccessful applicants filed lawsuits, lawmakers passed clean-up legislation last year to allow for more licensing lotteries that include more applicants.

The IDFPR announced last month that it will file new rules to simplify the adult-use cannabis retail licensing process, but Finch and Toigo claim in their complaint that they are still excluded from future licensing lotteries, reported.

The pair filed an emergency motion for a temporary restraining order and preliminary injunction with their lawsuit, according to the news outlet, and lawyers for the Illinois Attorney General’s Office have agreed that the IDFPR will not issue any adult-use dispensary licenses until the case is settled.

The licenses were already in limbo, however, due to another pending lawsuit in which a Cook County judge has also blocked the state from issuing the licenses until the resolution of that case.

In the case of Finch and Toigo, U.S. District Judge Rebecca Pallmeyer has scheduled a hearing for April 22, according to

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