A group of thirteen licensed cannabis transporters in Illinois have taken legal action against state regulators, alleging that unlicensed competitors are being allowed to transport marijuana illegally. Licensed cannabis transporters are permitted to move marijuana across the state from growers to retail stores and were seen as an easier route for minority owners to enter the market due to lower barriers to entry and the relatively low cost to start compared to establishing a cultivation or retail facility. However, state law currently allows growers themselves to ship their own products, thus excluding many licensed cannabis transporters from the market.
The plaintiffs in the lawsuit claim that state regulators said they lacked the resources to tackle illegal operators, after they reported an unlicensed transporter delivering cannabis to a store. The lawsuit signals potentially serious safety concerns, as unlicensed transporters are not required to meet the strict requirements of licensed operators. In order to minimise such risks, licensed transporters are required to have on-board cameras and location trackers.
Due to federal legislation, federally chartered banks are typically unable to conduct business with the cannabis market, leading to the majority of transactions being conducted in cash. The lawsuit’s plaintiffs claim that unlicensed transporters are potentially endangering workers by depriving them of the extra security that licensed transportation offers.
The plaintiffs also accused craft grower Star IL Grow LLC, which operates a dispensary in Burbank and Rockford, of transporting its products to a Chicago dispensary in February before its license became operational. Star Buds COO Ahmad Joudeh denied the allegations, stating that the business held a valid license issued in July of 2022.
The Illinois Department of Agriculture, against whom the lawsuit was filed, has declined to comment on the ongoing matter.
What Does This Mean for the Cannabis Market in Illinois?
While the growth of cannabis market in Illinois was initially hailed as a success, this lawsuit brings to light some of its shortcomings. Licensed cannabis transporters have limited business opportunities due to state law, whilst unlicensed transporters pose a safety risk to workers who are unable to access the security provided by licensed transporters. This case sheds light on the ongoing need for more comprehensive legislation in the cannabis market to ensure fair competition and maximum safety for all those involved.
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