Wednesday 4/20 may be the official day of celebration for pot smokers, but the 21st will be the real day of celebration for partakers in New Jersey.
As New Jersey recreational cannabis sales come online April 21, Illinois could serve as an example. The state has shown that legalization is just the beginning and there is a lot of work to be done to make the market work.
Despite assurances from Governor J.B. Pritzker that Illinois would have "the most equity-centric law in the nation" as part of its cannabis legislation, there are signs that two years after legalization, the state has a long way to go.
The Illinois cannabis market is generating $130 million a month, more than triple the $39 million the state's marijuana operators brought in during January 2020.
As the market grows, the companies that benefit are homogenous, according to one Evanston City Council member.
“I can tell you that there are no social equity candidates that are benefitting from any of that revenue,” Bobby Burns told the Evanston Roundtable.
"There are individuals who are part of protected groups who are employed [by] those organizations, and therefore have a salary and benefits, but in terms of ownership – social equity owners, operators, people who are controlling their businesses – there are none currently in the state of Illinois."
Chicago 'Cartel' Faces Legal Challenge
Multi-state operators have such a stranglehold on the Illinois market that a group calling itself True Social Equity in Cannabis has sued four of them in Illinois federal court.
The group claims that Green Thumb Industries, Akerna, Verano Holdings and Surterra Holdings are members of the 'Chicago Cartel' that illegally control the cannabis market in the state.
"The 'Chicago Cartel' has successfully monopolized the Illinois branded marijuana market," True Social Equity's nine-page lawsuit states.
"The 'Chicago Cartel' has a monopoly in the Illinois branded marijuana market. Akerna, Green Thumb, Verano and Surterra are nominally 'horizontal competitors' but in fact collude together as part of the 'Chicago Cartel.'"
The suit alleges that the group controls prices by sharing pricing information and muscling out smaller competitors.
Virginia Moves Backwards on Cannabis
Last week, Virginia Governor Glenn Youngkin, a Republican, proposed an amendment that would create two new misdemeanors for personal marijuana possession.
This would reverse the current law, which only enforces a $25 civil penalty for adults 21 and older who are caught with possession of more than one ounce of marijuana.
Youngkin's amendment would make the personal possession of over two ounces of cannabis a Class 2 misdemeanor punishable by up to six months in jail and/or a $1,000 fine.
Personal possession of over six ounces would be a Class 1 misdemeanor punishable by up to 12 months in jail and/or a $2,500 fine.
“Instead of creating new ways to criminalize Virginians for personal possession of cannabis, Governor Youngkin’s administration would better serve his constituents by establishing a legal adult-use marijuana market and ensuring that all cannabis products sold in the Commonwealth are accurately labeled and regulated for consumer safety,” said JM Pedini of cannabis advocacy group NORML.
Illicit NY Market vs. Legal NY Market
Any state that onboards pro-cannabis retail legislation must understand that they are in a fight against a thriving black market, thanks to decades of prohibition.
As of last week, the New York Office of Cannabis Management said that it has issues 52 cease-and-desist letter since February in order to head off illegal store-front marijuana operations, according to MJBizDaily.
Most of those letters were sent to the New York City area.
According to data from New Frontier Data, illicit cannabis sales totaled $66 billion in 2020 with just 24% of all cannabis sales believed to be legal that year.
