Pubdate: Mon, 10 Nov 2014
Source: Chicago Tribune (IL)
Copyright: 2014 Chicago Tribune Company
Author: Robert McCoppin, Tribune reporter
Page: 1


Rauner, Others Support a More Open Process for License Application

Since they won the Super Bowl, members of the 1985 Chicago Bears have 
made second careers out of promoting apple-pie products like 
McDonald's, Coca-Cola and G.I. Joe. Now, they can add a more 
countercultural item to the menu: medical marijuana.

Emery Moorehead, former tight end for that once-dominant franchise, 
is part of a business team hoping to sell cannabis under the new 
state law that legalizes it. Moorehead plans to direct community 
relations for a group of investors seeking to open a marijuana 
dispensary in his native Evanston - one of 369 businesses that have 
applied to run medical pot retail stores or growing warehouses in Illinois.

But while people like Moorehead are seeking publicity for their 
proposals, the state is deciding entirely in secret who will get 
potentially lucrative operating licenses. Even the names of 
applicants - and the names of those who will judge and rank the 
applications - are being withheld.

By law, medical marijuana business applications are confidential and 
exempt from the state Freedom of Information Act. Now, one of the 
most vocal critics of the secrecy of the licensing process is about 
to take oversight of it: Bruce Rauner.

The Republican governor-elect has criticized the process as "rigged." 
He has proposed disclosing the applicants' financial information and 
selling the operating licenses for 21 growing warehouses and 60 
retail stores to the highest qualified bidders.

That would require a rewriting of the law, which could prove 
difficult, since Democrats control the legislature and the licensing 
process has already begun.

Regulatory attorneys and a watchdog group say a solution may be found 
in the handling of another industry that emerged from the black 
market: casino gambling.

The state law that allowed riverboats in 1990 initially kept license 
applications secret, according to former Illinois Gaming Board 
attorneys Donna More and William Bogot. Following a public outcry, 
state lawmakers changed the law to require disclosure of basic 
information about the applicants, including investors' names, 
addresses, prior licensing or financial problems and political contributions.

More and Bogot, who now counsel casinos and medical marijuana 
clients, suggested that the casino law could provide a model for 
making the pot licensing process more transparent. The Gaming Board 
initially required the disclosure as a policy before it became law, 
said the attorneys.

"There are a lot of similarities between gaming and medical 
marijuana," Bogot said. Both activities are illegal except as 
prescribed by law, he pointed out, and where they are authorized, 
both are highly regulated through the application process, and 
regulators must decide how much of that information to make public.

Moorehead, for one, appreciates how high the stakes are for those 
trying to gain a foothold in a potentially massive new industry.

"This could be like the tech boom of new business that the 1990s 
had," said Moorehead, who recently retired as a real estate agent. 
"The ground floor is very important, and we want to be out there first."

Moorehead said he knows of one former teammate who uses medical 
marijuana in another state and would consider it himself for a 
disorder that can cause muscle weakness.

The marijuana business applications, which were due in September, run 
hundreds of pages and are very detailed, requiring owners' names, 
fingerprints, resumes and tax returns for three years. But so far 
they're all secret.

While all states keep private the identities of medical marijuana 
patients, and many do not release business applicant information, 
Illinois' secrecy on behalf of business applicants is in marked 
contrast to at least one other state.

Massachusetts, which is also implementing a new medical marijuana 
law, lists all its business applications online, along with the 
evaluation scores that determine who gets operating licenses. After 
the state initially awarded 20 dispensary licenses, nearly half were 
later rejected after the media reported misrepresentations, financial 
irregularities and conflicts of interest.

Former state lawmaker Susan Garrett, head of the Illinois Campaign 
for Political Reform, said the Massachusetts experience shows why 
transparency is so important.

"It doesn't make any sense to keep this information out of the public 
eye," she said. The law could easily be amended to provide more 
disclosure, while keeping personal and proprietary information 
confidential, she said.

In Illinois, Department of Public Health officials say they are 
considering what information they will release.

"We are committed to transparency and are working to determine what 
information we can release without violating the law," spokeswoman 
Melaney Arnold said via email.

The sponsor of the law, state Rep. Lou Lang, a Skokie Democrat, said 
the applications were kept secret - with identifying information 
blacked out even to the judges who are scoring the proposals - to 
ensure the evaluators don't know who has political connections.

"My motives were to keep the potential for cronyism out of the 
process," he said.

Lang would be open to publishing application information after the 
licenses are awarded but said disclosing only some information during 
the process would unfairly tar people who might have political 
connections but also have the best business proposals.

Regulators are reviewing the applications, seeking missing 
information, and will score them based on factors such as security 
and business plans, financial requirements and community benefits.

The health department will release the names of those evaluating the 
applications after the selection process concludes but will keep them 
secret until then "to prevent undue influence that could undermine 
the process," Arnold added.

State officials hope to name the license winners by the end of the 
year. With time needed to equip warehouses and start a three-to 
four-month growth cycle, it's likely to be at least spring before any 
product is available.

About 8,000 patients have started the online application process, but 
only about 230 have been approved so far. Patients must get a 
doctor's recommendation for marijuana to treat any of about three 
dozen qualifying medical conditions and must submit fingerprints to 
pass a criminal background check.

Regardless of what information about business applicants is released, 
one other aspect of the new industry is likely to remain secret. 
State law and regulators are silent on how businesses will get their 
first plants or seeds to start their crops, and marijuana remains 
illegal under federal law, so entrepreneurs say they will likely have 
to import from out of state on a "don't ask, don't tell" basis.

Some names of those who want to get in on Illinois' fledgling medical 
marijuana industry have been made public through local zoning 
applications. Chicago released the names of its applicants, who 
included a former strip club owner and an aide in the Clinton White House.

Yet many other would-be medical marijuana purveyors seem happy to 
stay behind the cloak of anonymity the state has granted them.

Not so for investor Larry King, who owned a medical marijuana 
dispensary in Long Beach, Calif., before coming home to propose the 
Evanston Wellness Center dispensary with Moorehead and others.

King argued that applicants' names and backgrounds should be made 
public so the public can judge what expertise they have. He has 
touted his group's ties to the local area, seemingly hoping that - 
along with having a Super Bowl Bear on board - might give them an edge.

"I want to be out there to alleviate fears and concerns in the 
community," King said. "I would be suspect of any applicants who 
would have any reason not to want to be known by the public."
- ---
MAP posted-by: Jay Bergstrom