Seven marijuana transport companies have sued the Illinois Department of Agriculture, citing discriminatory practices that favored larger majority white- and male-owned companies.
The Chicago-based plaintiffs, in a lawsuit filed Nov. 1 in Sangamon County Circuit Court, include ACC of Illinois Transportation, Runway Logistics Services, Hands to Heart, Reliavan, Fade Express, Piff Patch and Moetta’s Transports. The small businesses are majority-owned by women and/or minorities.
Transportation companies require a special license to drive cannabis products from manufacturers to retailers.
The lawsuit said the agriculture department in July 2021 released custom “quickie” transporter license applications with lower compliance criteria to medical cultivation centers that were already licensed to grow and manufacture cannabis in the state. Those larger companies are majority white- and male-owned.
But that happened before the department had licensed any independent transporter company. The expedited application for large companies was a “nail in the coffin for the minority and/or women-owned independent transporters, including the plaintiffs,” the lawsuit said.
It took the plaintiffs at least a year to get approval to start operations because they had a longer application process. By then, the larger players “who were quickly approved for operations, were already transporting their own cannabis around the state … and had been doing so for well over a year.”
The complaint also said by 2022, there was no reason for large players, who at the time controlled nearly all of the medical and adult-use cannabis market in Illinois, to use an independent transporter.
“Without a customer base, independent transporters had no opportunity to achieve commercial success or to pay off accumulated debt related to applying for their license or running the business,” the complaint said.
Attorney Alissa Jubelirer, of Benesch’s Chicago office, represents the plaintiffs and said in a statement “the Illinois Department of Agriculture’s actions have directly harmed independent transporters, 68% of whom are minority- and women-owned businesses. This constitutes a clear case of disparate impact discrimination under the Illinois Civil Rights Act, and the plaintiffs deserve to be compensated for the financial harm they’ve suffered.”
They seek damages of an unspecified sum for future lost profits as a result of the agriculture department’s alleged discrimination, as well as attorneys’ fees.
A spokesperson for the Illinois Department of Agriculture said it does not comment on pending litigation.
When Illinois legalized recreational marijuana in 2020, state legislators sought to correct the effects of the drug war on Black and Brown communities with “the most equity-centric law in the nation.”
The state issued special “social equity” general cannabis business licenses for people of color so they could reap the profits of the now billion-dollar industry. But even with those licenses, many minority entrepreneurs struggled to start their businesses.
In July 2024, Illinois released a disparity study, which highlighted issues facing independent transporters. The study noted that “transporters lacking other cannabis licenses face difficulties securing contracts.”
Overall findings from the report “underscored the challenges faced by racial and/or ethnic minority and women entrepreneurs in accessing the cannabis market, securing financing, and navigating complex regulatory frameworks.”
Now, only two out of 55 minority- and/or women-owned independent transporters are active in Illinois, according to Jubelirer. Both are plaintiffs in the case, struggling to remain in business, while the other plaintiffs are either inactive, failed to launch or were forced to close, she said.
Amber Lengacher, CEO of cannabis consulting firm Purple Circle, said, “Illinois’ cannabis program was supposed to be a model for diversity, but instead social equity licensees have faced insurmountable odds unnecessarily caused, exacerbated or ignored by Illinois state regulators”
Lengacher has worked with plaintiff Hands to Heart since 2020 and also worked as a pro bono lobbyist with several of the other plaintiffs through the Illinois Independent Cannabis Transporters Association.
“Lawmakers and regulators must understand that when they are propping up a brand new industry supply chain, they have a duty to ensure that the supply chain works for everyone, including social equity operators,” she said.
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