“The sad part was people who were targeted when there was prohibition on cannabis, those same individuals were excluded from the cannabis industry.”

By Will Hammann, Maryland Matters

When Candice Peters opened Coastal Cure Cannabis in Delmar on June 1, it was the culmination of more than two years of hard work on a decade-old dream.

And that’s a fast turnaround compared to many of her peers.

Of the 83 “social equity” licenses for dispensaries that have been distributed by the state since 2023, only 17 are currently in operation, twice the number that were open at the start of this year as more and more finally get their businesses off the ground.

In addition to the challenges faced by any wishful entrepreneur, license holders say they also struggle with unique zoning issues, limited investors and unwilling real estate partners as the still-pervasive stigma around their product hangs in the air.

“It’s been a journey,” said Peters. “And there have been a lot of long nights, and longer days trying to jump…all of these hurdles.”

Peters, a physician who had long been interested in medical use of cannabis, first sought a license after marijuana was legalized for medicinal use in Maryland more than 10 years ago. But she didn’t come away with one then.

“There were no minorities, or very few minorities that got these licenses,” she said. “They were supposed to be a very blind application process. That turned out not to be true, which is how we end up here.”

The Cannabis Reform Act, which made recreational sales legal in 2023, also created the Maryland Cannabis Administration and the Office of Social Equity. It created the social equity licenses, for new dispensaries, growers and processors who came from Maryland communities—or who attended schools in communities—disproportionately affected by the war on drugs.

“The sad part was people who were targeted when there was prohibition on cannabis, those same individuals were excluded from the cannabis industry,” Peters said. “Multimillions of dollars have been made, and no one who was affected by it, decades ago, was able to really profit from that.”

That was echoed by Malcolm Gillian, founder of the Maryland Coalition for Cannabis Equity, a trade association representing social equity licensees like Peters.

“Cannabis should never have been illegal—the enormous impact and harm on folk in arrests and everything else—I definitely want to see that be corrected,” said Gillian, who said he is a few months away from opening his own dispensary.

He said his coalition, made up mostly of self-financed entrepreneurs, works to “make sure social equity licensees have the right funding opportunities, and frankly, when they get to market, have a chance to compete,”

Gillian said Maryland’s law, and the Cannabis Administration, have “created a very healthy, very robust, legal marketplace versus other states that are still challenged with killing the illegal markets.”

Sales have increased each year since recreational cannabis was legalized in 2023, according to data from the Cannabis Administration, totaling $3.46 billion since then and hitting a monthly record in April of $105 million in combined medical and recreational sales.

“The MCA remains committed to providing a safe, equitable and accessible medical and adult-use cannabis industry for qualifying patients and adult consumers,” the administration said in a statement.

Most dispensaries in the state began as medicinal-use operations that converted their licenses to sell recreational cannabis as well. There are 99 non-social equity equity licensed dispensaries currently operating in the state, according to MCA data.

Peters noted that part of regulating the industry has been ensuring that new businesses weren’t founded or swept up by larger investors with multiple locations, sometimes across multiple states.

“The resources that these multistate operators have, I mean, they’re so far above what we have access to,” she said. “Not just financially but in who we know, who we can contact to get expedited services.

“This round of licenses was critical to, not even evening the playing field, but at least allowing us to have a seat at the table,” Peters added. “If half those licenses are bought up by multistate operators, the other half of us would never be able to compete with those numbers.”

Making sure that social equity licenses stay in local hands is just one of the challenges the new businesses have faced. Peters, Gillian and Frank Hayes, an owner of Crabtree Cannabis in Kensington, said the law requiring that 65 percent of equity is held by the qualified applicant can make it especially difficult for social equity licensees to raise capital.

Hayes, who sits on the board of the Maryland Dispensary Association, has spent time lobbying to strike a balance between attracting investors and keeping ownership in the hands of the people the special licenses were meant for.

“We’re very limited in terms of what we can do from a marketing and advertising perspective,” he said. “We’ve lobbied to try to loosen up some of those restrictions with pretty little success.”

There are other challenges. Hayes and co-owner Felicia Covel Rami, owner of a catering business and Baltimore native who won a social equity license in the state’s lottery in 2024, were renovating a former bank to become their dispensary when the state ordered work halted after complaints from two nearby churches. State regulations prohibit dispensaries within 500 feet of places of worship.

It turned out the churches themselves lacked permits, and they were forced to move. Months after filing a lawsuit, the order was lifted, and their renovation could continue.

Hayes said just finding a location was a challenge, as many landlords or their major tenants are unwilling to share space with a cannabis dispensary, even if it complied with zoning laws.

“I think there is still certainly a stigma associated with cannabis because it’s federally illegal,” said Hayes, whose dispensary opened April 14. “I think a lot of that stigma originates from the war on drugs, which in my opinion was pretty misguided on behalf of the federal government.”

Acting Attorney General Todd Blanche in April reclassified medical cannabis from a Schedule I to a Schedule III drug. That put cannabis on the same level as pain medicine and ketamine, in the eyes of the federal government, instead of side by side with drugs like heroin and LSD.

That’s progress, said Peters and Hayes, who hope to see more cannabis research now that the rescheduling opens the door. But the order also created an uneasy future for the recreational side of dispensaries, since the federal Drug Enforcement Administration (DEA) still considers recreational cannabis illegal.

“If anything, this April decision has just created a lot of confusion,” Hayes said. “Some licensees have chosen to register and apply with the DEA, others have chosen not to, but I don’t think either camp has confidence [nor] clarity on the path forward.”

He and Covel Rami decided to register after their suppliers said they planned to do so, since registered businesses can’t deal with unregistered partners. Peters was already registered because of her medical career. But she noted that the DEA is the same agency that led the war on drugs that inspired the social equity license program and, “Choosing to trust them now, even for good reason, does cause me to pause.”

“To now include something that’s federally illegal, and submitting information to the DEA is a little frightening,” she said.

Hayes and Gillian, both of whom previously worked in California’s cannabis industry, said high taxes there in the past on adult-use cannabis had allowed an illegal market to continue to flourish. That is not the case in Maryland, which charges a 12 percent sales tax on the use of recreational cannabis, they said,

“There is no longer like a local weed guy [in Maryland], everyone just goes to the dispensary,” Gillian said. “It’s safe, it’s clean.”

“We’re in a state that has supported us,” Peters said. “I think Maryland does want us to be successful, so I’m hoping that they will support us going forward and moving through this whole process.”

As Peters moves forward, she said she hopes the unique perspective of social equity licensees can fulfill the program’s purpose.

“We’re intentionally trying to hire returning citizens, we’re intentionally trying to hire people of the underserved communities, and we’re intentionally trying to get the products out to those people as well,” she said. “I think as we destigmatize this, we’re only going to get more people that are using cannabis in a safe way.”

This story was first published by Maryland Matters.

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“We just want a fair shot. We’re not asking for anything special, no special privileges, but what they promised from the very beginning.”

By Hannah Meisel, Capitol News Illinois

Nearly seven years after Illinois lawmakers approved recreational cannabis legalization, applicants who lost out on coveted business licenses are still battling the state in court, alleging the law’s rollout undermined its purported equity goals.

At the time of its passage in 2019, supporters of Illinois’s landmark law touted it as the most equity-centric legalized cannabis program in the nation. But one of the centerpieces of that legislation—setting aside the majority of cannabis business licenses for “social equity” applicants disproportionately affected by the War on Drugs—proved more complicated than the law’s authors had imagined, setting off years of litigation over the process.

The final lawsuit of dozens filed following the first cannabis licensing lottery in 2020 finally got its day in court last week, marking the conclusion of a yearslong legal saga testing the state’s legalization policy. But it’s also the last chance for the plaintiff, Well-Being Holistic Group, to have an opportunity for a dispensary license after all four of its applications lost in three lotteries.

“We just want a fair shot,” the Rev. Otis Davis, said after a hearing in the case. “We’re not asking for anything special, no special privileges, but what they promised from the very beginning… So we just saying, ‘Hey, that the system is broken, then they should redo it, and they should give everybody a chance.’”

Davis preaches at Repairers of the Breach Ministries in Chicago’s Back of the Yards neighborhood and unsuccessfully ran for Chicago City Council in 2019. He was part of the team that applied for dispensary licenses as Well-Being Holistic Group in 2020. Chris Harris, an attorney who’d represented Davis, teamed up with his client along with Harris’ friend and business partner David Roberts to submit the applications.

Harris was blunt in his assessment of Davis’s value to the team: “Otis being a veteran, Otis being a practicing minister on the South Side of Chicago coming from a disproportionately impacted area—we had what we thought was a perfect team, and a team that was designed to win this type of license.”

In fact, Well-Being Holistic Group’s applications received perfect scores, but still didn’t win a license. While most lawsuits filed against the state after the lottery process were from applicants who disputed their scores for a chance to be included in the lottery, Well-Being’s case argues a different legal theory, which attorney Chris Carmichael of Henderson Parks said is the “most difficult path” of all the lawsuits.

Plaintiff alleges lotteries were rigged

Well-Being argues that the Illinois Department of Financial and Professional Regulation, which operated the lotteries, improperly allowed roughly 450 ineligible entries into a lottery of 901 applicants for dispensary licenses in the Chicago region. That, Well-Being argues, nearly doubled the size of the pool and reduced others’ chances of winning.

Well-Being alleges the entries should have been flagged as ineligible because corporate dispensaries that already had a footprint in Illinois’s medical cannabis market had their fingerprints on applications for social equity dispensary licenses.

In one case, Carmichael said a company paid for roughly $500,000 in application fees—something IDFPR and the consultants hired to vet applicants and conduct the lotteries should have caught, as the “remitter” line on those cashier’s checks contained the name of the company.

IDFPR maintains it did its due diligence by checking out the individuals named as principal officers on the license applications, which the agency argues would have caught any attempts to flout application limits or hide true ownership of the entity behind an application.

But Well-Being argues vetting only individuals missed the forest for the trees, causing IDFPR to overlook dozens of applications having the same corporate sponsorship.

Alex Moe, a lawyer from the Illinois Attorney General’s office, told Cook County Judge Patrick Stanton that Well-Being was “missing that consultants were expected” to take part in the application process. There were no rules against those consultants paying for application fees either, he said, unless consultants had undisclosed financial interest in the entity applying for licenses.

Further, Moe said Well-Being’s theory of mathematical unfairness in the lotteries is fundamentally incorrect.

“Even if Well-Being is correct and half the applicants should not have been in there, it doesn’t change the outcome,” he said.

By following the “paper trail” created by the lottery, Moe said IDFPR recalculated what would have happened if the applications Well-Being allege should’ve been marked ineligible weren’t in the pool. Well-Being would have placed 126th out of 450, he said.

“That’s something we know with mathematical certainty—that Well-Being would not have received a winning drawing,” Moe said.

Corrective lottery?

But Carmichael pointed out that since the state has social equity cannabis dispensary licenses going unused, “the only possible meaningful thing to do is to run a corrective lottery.”

The state already ran corrective lotteries after initial litigation held up the license awarding process for a year. The first dispensaries owned by social equity license holders didn’t open until November 2022—nearly three years after the application process opened. As of January, only 64 percent of licensed social equity dispensaries were operational, according to an analysis by The Chicago Reporter.

Stanton, who pointed out multiple times during the hearing that IDFPR had wide latitude over interpreting state statute, said he understood Well-Being’s claims but seemed skeptical of its arguments that a court should step in and tell a state agency how to do its job.

“It sounds to me like…there was some vetting done before the lottery. Maybe not the level of vetting you think should’ve been done,” he told Carmichael. “You’re saying they didn’t do enough. And I feel like, ‘Okay, that’s sort of the decision of the department.’”

The judge said he would need more proof that IDFPR “didn’t follow statute” in order for judicial review to be warranted.

“They did something,” Stanton said of IDFPR. “Perhaps not enough. Applying the standards they did, it seems to me they caught what they should’ve caught.”

The judge is set to rule at a May 21 hearing.

This article first appeared on Capitol News Illinois and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.

Capitol News Illinois is a nonprofit, nonpartisan news service that distributes state government coverage to hundreds of news outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.

Photo elements courtesy of rawpixel and Philip Steffan.

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