Cannabis News

Illinois Court Hears Final Lawsuit Challenging Marijuana Social Equity Business Licensing Lottery

Published

3 months ago

April 12, 2026

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“We are not asking for anything special, no special privileges, but what was promised from the beginning.”

By Hannah Meisel, Capitol News Illinois

Nearly seven years after Illinois lawmakers approved the legalization of recreational cannabis, applicants who lost out on prized business licenses are still fighting the state in court, arguing that the law’s expansion undermined its supposed equity goals.

At the time of its passage in 2019, supporters of Illinois’ landmark law said it was the most legalized cannabis program in the nation. But one of the pillars of that legislation—relinquishing most cannabis business licenses to “social equity” applicants disproportionately affected by the war on drugs—turned out to be more complicated than the law’s authors imagined, spawning years of litigation in the process.

The last of dozens of lawsuits filed after the first cannabis license lottery of 2020 reached court last week, ending a years-long legal saga testing the state’s legalization policy. But it’s also the plaintiff, Well-Being Holistic Group’s last chance to get a dispensary license after losing all four of its applications in three draws.

“We just want a straight line,” 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 were saying, ‘Hey, the system is broken, then they should do it again, and they should give everybody a chance.'”

Davis preaches at Repairers of the Breach Ministries in Chicago’s Back of the Yards neighborhood and ran unsuccessfully for Chicago City Council in 2019. He was a member of the group that applied for dispensary licenses in 2020 as the Well-Being Holistic Group. Chris Harris, an attorney who represented David Davis, along with David’s client, joined his business partner and David’s business partner.

Harris was candid in his assessment of Davis’ value to the team: “Not only was Otis a veteran, but Otis was a practicing minister on the South Side of Chicago coming from an area of disproportionate influence; we had what we thought was the perfect team, and the team was designed to win this type of license.”

In fact, the Well-Being Holistic Group’s applications received a perfect score, but still did not win a license. While most of the lawsuits filed against the state after the lottery process have come from applicants who disputed their lottery entry scores, Well-Being’s case argues a different legal theory, which Henderson Parks attorney Chris Carmichael says is the “hardest path” of all lawsuits.

The plaintiff claims that the lottery was rigged

Well-Being argues that the Illinois Department of Financial and Professional Regulation, which administered the lotteries, improperly accepted approximately 450 ineligible entries in a lottery of 901 applicants for dispensary licenses in the Chicago area. This, Well-Being says, almost doubled the size of the pool and reduced the chances of others winning.

Well-Being complains that the entries should have been marked as ineligible because corporate dispensaries that already had a foothold in the Illinois cannabis market had their fingerprints on social equity dispensary license applications.

In one case, Carmichael said a company paid roughly $500,000 in application fees — something that should have been caught by IDFPR and the consultants hired to vet the applicants and run the lotteries because the “ship” line on those cashier’s checks had the company’s name on them.

The IDFPR says it did due diligence by verifying the people named as officers on license applications, which it says would have caught any attempts by the agency to skirt application limits or hide the true ownership of the entity behind an application.

But Well-Being argues that examining only individuals missed the forest for the trees, and the IDFPR ignored dozens of applications with the same corporate sponsor.

Alex Moe, an attorney with the Illinois Attorney General’s office, told Cook County Judge Patrick Stanton that Welfare lacked participation in the application process “as expected by the counselors.” There were also no rules against such consultants paying application fees, he said, unless the consultants had an undisclosed financial interest in the entity applying for the licenses.

Furthermore, Moe said Well-Being’s theory of mathematical unfairness in lotteries is fundamentally wrong.

“Even if Welfare is right and half the applicants shouldn’t be on it, it doesn’t change the outcome,” he said.

Following the “paper trail” created by the lottery, Moe said the IDFPR has recalculated what would happen if the applications reported by Welfare were to be ineligible if they were not in the pool. Welfare would rank 126 out of 450, he said.

“That’s something we know with mathematical certainty, that Welfare would not receive a winning drawing,” Moe said.

Corrective lottery?

But Carmichael noted that with the state’s unused social equity cannabis dispensary licenses, “the only meaningful thing that can be done is to do a corrective lottery.”

The state was already conducting corrective lotteries after initial lawsuits delayed the licensing process for a year. The first social equity licensee-owned dispensaries did not open until November 2022—almost three years after the application process opened. As of January, only 64 percent of licensed social equity dispensaries were operating, according to an analysis by The Chicago Reporter.

Stanton, who said several times during the hearing that the IDFPR had broad latitude to interpret state statute, said he understood Welfare’s claims but seemed skeptical of arguments that a court should step in and tell a state agency how to do its job.

“It seems to me that … there was some testing done before the lottery. Maybe not the level of testing that you think,” he told Carmichael. “You’re saying they didn’t do enough. And I feel like, ‘OK, that’s the department’s decision.'”

The judge said that further evidence that the IDFPR “failed to comply with the statute” would be required to warrant judicial review.

“They did something,” Stanton said of the IDFPR. “Maybe not enough. Applying the standards they did, I feel like they caught what they were supposed to catch.”

The judge will decide in a hearing on May 21.

This the article appeared for the first time Capitol News Illinois and is republished here under a Creative Commons Attribution-NoDerivs 4.0 International License.

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

Photo elements courtesy of the user rawpixel and Philip Steffan.

Marijuana Moment is made possible with the help of readers. If you rely on our pro-cannabis journalism to stay informed, consider a monthly Patreon pledge.

Cannabis News

Entourage Health, formerly WeedMD, enters creditor protection

Published

9 hours ago

June 30, 2026

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Entourage Health Corp. has entered creditor protection. The company and six related entities filed on June 17 under the Companies’ Creditors’ Arrangement Act owed approximately $240.1 million to the sole affiliate of the LiUNA Pension Fund, its owner, its secured creditor and the lender that is now funding the money (First Report pp. 3-6-9

That affiliate, 2437653 Ontario Inc. No. 1 company, Entourage, secured a 2024 deal that took the former WeedMD private and off the TSX Venture Exchange (December 2024 PR). Shareholders were paid half a Canadian cent per share, or C$0.005, and the board recommended a sale in December 2024 (December 2024 PR).

Jason Alexander, head of the special committee of independent directors, recommended to shareholders. “The transaction ensures that shareholders will receive immediate tangible value while positioning the Company for future growth and flexibility,” Alexander said (December 2024 PR). The company took on $167.6 million in debt in that sale, having already breached the covenant with the same guarantee (December 2024 PR). Eighteen months later that debt was $240.1 million when it was filed, and the growth promised by the sale is a settlement (First Report 6-18 p.

Adult use is off, medical is still running
The leisure business is closing, not saving. Entourage laid off about 53 workers in early June before the order, and 22 remain (First Report p. 6 Adult use inventory is being cleared, finished products are shipped to provincial distributors, and flowers are sold in bulk to the market to other licensed growers (First Report p. 12 Color Cannabis, Dime Bag and Saturday Cannabis are the brands going down with it (First Report p. 5

What remains open is the doctor’s arm as the exclusive supplier of cannabis under the Starseed brand to local residents of the Workers International Union of North America (First Report p. 5 The pension fund that funds the procedure is tied to the same union that the medical brand serves, and the part of Entourage that serves union members is the part that is kept alive while the rest is sold for parts.

At the end of July the money runs out with no new money (First Report p. 11 The money comes again from the pension fund affiliate, a $1.1 million debtor-in-possession facility at 5% per annum, no commitment fee, no exit fee (First Report pp. 10-11). The monitor, Ernst & Young, checked terms against other DIP loans in the cannabis sector from January 2024 and concluded that a third-party lender would not lend on better terms given the state of the business (First Report p. 11 The lender, which already owed $240 million, is the only one willing to advance another million to keep the lights on through the sale.

Health Canada is the largest unsecured creditor, owed $494,505, ahead of all suppliers and competitors on the company’s books (List of Creditors p. 1 Supreme Cannabis is owed $262,133, medical platform HelloMD is owed $169,564, the Town of Aylmer is owed $144,815, the Independent Retail Cannabis Board is owed $137,098 and High Tide is owed $124,583 (List of Creditors p. 1 Unsecured claims total $3,288,333 in more than 100 names, many of which have yet-to-be-determined amounts by medical clinics (List of Creditors 1-5 p. Against $240 million guaranteed, none of them will see much.

In the June 29 return, the lender asks the judge to extend the stay until August 28, approve the DIP facility, and double the Administrative and Directors fees to $500,000 each (First Report 4-8-12. p. The directorship is rising as directors face payroll, holiday pay and excise duties over a longer period of time, and the company’s directors and officers insurance expires at the start of July (First Report p. 12

The sales process starts on the same day, based on a marketing effort that started around May and was presented before the deal that sparked interest but no one could make a deal (First Report p. 13 Insiders and affiliates have until July 6th to say they intend to bid, the bid deadline is July 30th, the successful bid must be received by August 7th, and the outside deadline is August 28th (First Report p. 15 The affiliate of the pension fund has written to the Monitor that it will not make an offer (First Report p. 16), and any other affiliate that does so must be removed from the process (First Report p. 16 The settlement request for non-cannabis equipment and the sale of the Aylmer facility, a 26,000-square-foot extraction and processing facility that has been the company’s production base at 250 Elm St.

the source

For more information:
Neighborhood Health
1.844.933.3636
(email protected)
entouragehealthcorp.com

Cannabis News

DEA And FDA Highlight How Marijuana Is Safer Than Alcohol And Opioids During Rescheduling Hearing’s Opening Day

Published

10 hours ago

June 30, 2026

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Attorneys for the Drug Enforcement Administration (DEA) on Monday highlighted testimony about the medical benefits of marijuana and its relative safety compared to other substances such as alcohol and opioids in the opening day of a hearing. The Trump administration’s cannabis rescheduling proposal.

Marijuana Moment spoke with several people in the audience for Monday’s hearing to find out how the testimony is going, despite the proceedings not being broadcast live to the public at the request of one congressman and others.

According to those sources, DEA attorney James J Schwartz stated that the government is the proponent of the proposed rule to formally move cannabis from Schedule I to Schedule III of the Controlled Substances Act (CSA), stating that the hearing is “not about the recreational use of marijuana” and “about regulation, not about legalization.”

“The government has presented no evidence to suggest that marijuana is not dangerous. All controlled substances are dangerous,
he said “However, controlled substances must be evaluated against the risks they pose, balanced against the medical benefits they provide.”

Dominic Chiapperino, director of the Food and Drug Administration’s Center for Controlled Drug Evaluation and Research and one of two DEA witnesses, testified about how federal health officials formed their recommendation to reschedule cannabis.

Opponents of the reform have used a new two-part test that they argue is a bad departure from a previous analysis, although a DEA lawyer said the hearing is not about that issue, and Chiapperino said the new test is now considered “every time” a new analysis is done on a drug.

The FDA official said the agency compared marijuana to alcohol, opioids and other substances in its scheduling analysis, and found that marijuana’s daily harms were lower than all or most of those comparators.

Cannabis is associated with fewer overdose deaths than comparable substances, Chiapperino said, and when reports of cases involving deaths mention marijuana, the deaths are often attributed to secondary incidents such as accidents or self-inflicted harm. Marijuana’s potential for overdose deaths is “much lower” than other Schedule I drugs and Schedule II drugs. Rather than opioids, the FDA official said.

As for withdrawal in regular users, Chiapperino testified that cannabis has symptoms similar to tobacco, including irritability, but alcohol has “more of a withdrawal syndrome,” which can include seizure and death.

Also on Monday, the lawyers of some of the parties against the reorganization had the opportunity to cross Chiapperino.

Kevin Sabet, president and CEO of the prohibitionist organization Smart Approaches to Marijuana, who was also invited to attend the hearing, said in a video posted on social media that it is “surreal” to see the government arguing that cannabis’s medical uses and relatively minor harms are “just lying through their teeth.”

The DEA “is in a very awkward position to argue the opposite of what it’s been arguing for the last 50 years, the opposite of what the science says, the opposite of what the evidence is,” he said, “which is, of course, to argue against the government that marijuana is more harmful than we thought, not less harmful.”

In short, the government has so far been repeating the inappropriate comparison of marijuana to alcohol, heroin, and other opioids. And duplicating the unprecedented new two-part test for medical use now accepted, which overturns a century of work in this medical…

— Smart Approaches to Marijuana (@learnaboutsam) June 29, 2026

On Tuesday, opponents of the review will have an opportunity to cross-examine the FDA official, and the government’s second witness, Corey Burchman, a doctor from New Hampshire, will begin his testimony. The DEA announced in a filing last week that it will do so Testify on “How Medical Marijuana Provides Medical Benefit to Pain Patients.”

On Monday, a DEA attorney said Burchman would “describe the real-world impacts of treating pain with marijuana instead of opioids” based on his experience with both and discuss how he has “personally transitioned patients from opioids to marijuana for their pain.”

The witness will also testify about the differences between cannabis and opioids in terms of withdrawal and overdose, he said.

Before the hearing began, marijuana reform activists rallied They held a press conference outside DEA headquarters to highlight how they feel of the process – criticizing the fact that supporters of the reform were not invited to participate and that the proceedings are not reproduced live, despite the “transparency” oath of the officials.

DEA Administrator Terrance Cole only organizations and individuals opposed to marijuana reform have been invited to the hearing as a designated participant – telling followers that they do not meet the definition of “interested person” to participate because they are not “affected or prejudiced by any rule or proposed rule that may be issued.”

last week, Marihuana Moments sent petitions to DEA Chief Administrative Law Judge Derek Julius and DEA Administrator Cole asking for them reverse the decision to ban the public from tuning into the cannabis hearing via live stream. A Congressmen and other journalists later joined that request.

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The opponents who are participating in the hearing submitted statements last week anticipate the anti-marijuana arguments they intend to make during the procedure.

The hearing it will end before July 15.

Acting Attorney General Todd Blanche in April He issued an order that immediately reclassified the state’s licensed medical cannabisas well as marijuana products approved by the Food and Drug Administration (FDA) under Schedule I through Schedule III of the Controlled Substances Act (CSA).

According to a separate order signed by the acting attorney general, the upcoming hearing will include Class III marijuana.

Preliminary hearing process on the marijuana redistricting process initiated by the Biden administration It was halted last year amid allegations of improper communications and witness selection.

the current The marijuana redistricting process is being challenged in several ways which have been upheld by a federal Court of Appeals. those pieces of State attorneys general have filed lawsuits against cannabis reform, Opponents of marijuana legalization and a a cannabis-based biopharmaceutical corporation.

Meanwhile, the reorganization of state-licensed medical cannabis is already having a major impact.

The Congressional Research Service published a report on the current rescheduling of cannabis Certified patients with medical marijuana from state licensed dispensaries are now eligible for Class III. “The order appears to allow end users to use marijuana medically without a CSA prescription,” he says.

The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) has published a Draft update to a gun purchase form to recognize the legal status of medical marijuana in the reprogramming. The revised section of the question states that only the “recreational use or possession of marijuana” is federally prohibited, omitting the prior form’s mention of medical cannabis.

The US Treasury and Internal Revenue Service (IRS) said they plan to issued new tax guidelines for the marijuana industry after reprogramming. The reform will benefit state-licensed marijuana businesses by allowing them to take federal tax deductions that are currently prohibited under IRS Code Section III, known as Section 280E.

Even the DEA, which has long opposed cannabis legalization and accused the Biden administration of stalling the initiative in the reorganization process, has done so. It launched a registration process for legal marijuana businesses in the state to take advantage of the federal benefits that come with the reform.

The Department of Transport, on the other hand, issued guidelines stating this use Legal medical cannabis in the state is still no excuse for truck drivers to test positive for drugspilots and other safety-sensitive personnel.

A congressional committee recently Federal officials voted to block further steps to reschedule cannabishowever lawmakers from both parties told Marihuana Moment they don’t think that provision will be enacted become law

user photo Carlos Gracia.

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cbdMD welcomes White House call for fair treatment of hemp-derived products

Published

1 day ago

June 29, 2026

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cbdMD welcomes the Administration’s call for Congress to ensure fair treatment of hemp-derived products under federal law and calls for immediate action to revise hemp regulations to ensure fair treatment of hemp products under federal law.

In a letter to congressional leadership this week, the White House Office of Management and Budget identified hemp reform as a priority strongly supported by the Administration. The petition calls on Congress to ensure fair treatment of hemp-derived products by maintaining access to appropriate full-spectrum CBD products, and by maintaining Congress’ intent to reduce products that pose health risks. The administration also urged Congress to pass a responsible federal framework or at least extend the current implementation period to give lawmakers time to get policy right. The request builds on the president’s previous public statements urging lawmakers to protect access to full-spectrum CBD products that millions of Americans rely on.

“We are encouraged to see the administration so clearly championing the responsible, scientific hemp products that consumers depend on every day,” said Ronan Kennedy, CEO of cbdMD. “cbdMD has always believed that the future of this category is built on quality, transparency, and clear rules that separate them from bad actors. A federal framework that protects consumer access, promotes safety, and provides certainty to companies that provide certainty is what this industry and the people it serves deserve. We applaud the policymakers who are working to achieve this outcome.”

“We believe CbdMD is purpose-built for this next phase of the market,” added Kennedy. “Our focus remains on serving our customers with reliable and effective products, supporting responsible regulation and building long-term value for our shareholders as the category continues to evolve. Along the way, we will continue to evaluate the opportunities this evolving environment holds.”

For more information:
cbdMD
cbdmd.com/