On the verge of a lottery to award new cannabis business licenses in Illinois, a judge has ordered that no new cannabis retail licenses may be awarded in Illinois until he rules on a challenge to the state’s licensing process.

       The order by Cook County Judge Moshe Jacobius on Wednesday allows the state to proceed Thursday with its first of three lotteries to determine who will be eligible to receive the licenses, but states that no licenses may be awarded “until further order of the court to review the claims before it …”

       The ruling comes in the case of Wah Group, LLC, and Haaayy, LLC, versus the Illinois Department of Professional Regulation, Deputy Director Bret Bender, KPMG, LLP and Roe Corporations.

       The plaintiffs had asked for an injunction against the lotteries. Both Wah and Haaayy each scored 247 out of 252 possible points on their license applications. But they did not have majority ownership by a veteran, which was required to get five bonus points for a perfect score.

       As it turned out, only applicants with perfect scores initially qualified for licenses, and only veteran-owned teams got perfect scores. The plaintiffs claim the veteran ownership requirement was unconstitutional and counter to the goal of the state law legalizing recreational marijuana, which intended to give licenses to social equity applicants who were especially hurt by the war on drugs.

       Also, unlike other applicants, perfect-scoring veteran-owned teams were not subject to potential scoring reviews and downgrades. The plaintiffs want those with perfect scores to undergo an audit to see if they were scored correctly.

       In addition, the two companies bringing the suit claim that some applicants had unfair advantages, such as those with ties to former state cannabis regulators, and members of Chicago NORML whose groups received perfect scores. Chicago NORML is a cannabis advocacy group which received $500,000 to help social equity applicants.

       The lottery has been delayed more than a year due to complaints about the scoring process. Various losing applicants filed suits, stating that the scoring was unfair, with different scores for identical applications. Gov. J.B. Pritzker’s administration delayed the lottery, recently finished rescoring the applications, and scheduled three lotteries for different qualifying categories.

       The next hearing on the lawsuit was scheduled for Aug. 9.

       rmccoppin@chicagotribune.com

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