LLF's Bob Minetz, Saskia Brian, and Monica Palermo Obtain Reversal Of Adverse Administrative Decisions For Cannabis Clients
The cannabis industry in Illinois is booming. But those who wish to be part of the state’s “green rush” in any capacity – whether as a dispensary, cultivator, distributor, infuser, or other type of business - must first get the approval of either the Illinois Department of Financial and Professional Regulation (IDFPR) or the state Department of Agriculture. The denial of a license application by one of these entities is often the end of the road for the applicant, as agency decisions are notoriously difficult to challenge and overturn. But in two separate cases, LLF lawyers Bob Minetz, Saskia Bryan, and Monica Palermo recently accomplished precisely that, reviving their clients’ hopes after being improperly denied the licenses and approvals that the agencies should have granted.
Denial of Dispensary Relocation Request Overturned
One of the cases involved a company that operated a licensed medical and adult-use dispensary on North Avenue in the City of Chicago and also a “secondary site” in the West Loop. In 2021, it sought to move its West Loop location to Aurora, Illinois and filed an application with the IDFPR to do so.
The Department denied the request, even though it had the authority to grant the request to change locations, the request complied with the Department’s own FAQs regarding such applications, and the denial was contrary to the Department’s prior decisions, among other issues
After the IDFPR again denied the client’s request for rehearing/reconsideration, LLF filed a Complaint for Administrative Review in the Circuit Court of Kane County asking that the court reverse the Department’s decision and grant the client’s request to move its dispensary to Aurora.
It is extremely difficult to obtain an order reversing a final agency decision as they are granted wide discretion under the law, and their actions are presumed to be lawful and correct. To overturn an agency decision, a plaintiff must prove that it was “arbitrary and capricious” or “clearly erroneous.” An administrative decision is arbitrary and capricious where the agency:
- relies on factors that the legislature did not intend for the agency to consider;
- entirely fails to consider an important aspect of the problem; or
- offers an explanation for its decision that runs counter to the evidence before the agency, or which is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.
In this case, the court agreed that the Department’s decision was “clearly erroneous” and reversed the decision denying the dispensary’s relocation request.
Cannabis Infuser License Application Denial Reversed
In another case, LLF’s Minetz, Bryan, and Palermo sought judicial review of the Department of Agriculture’s decision to deny the client’s application for a cannabis infuser license even though the client met all the requirements for such a license. The Notice of Disqualification (and a subsequent supplemental notice) denying the application failed to state the basis for the Department’s decision with any specificity and otherwise did not provide the particular reasons for the disqualification. Instead, it said that the application failed to comply with one of four boilerplate deficiencies without specifying which one formed the basis for the decision.
On behalf of the applicant, Minetz, Bryan, and Palermo asserted that denial was arbitrary and capricious in violation of the law, the Department’s own policies and procedures, and established Illinois case law.
Once again, the court agreed with the arguments put forth by LLF, finding that the department’s notices regarding the denial told the applicant “and by extension this court – precisely nothing about how the Department came to reach its decision disqualifying” the application. As such, the court remanded the matter back to the Department for further consideration, reviving the client’s application and keeping the door open for it to obtain its license.
The firm’s victories in these cases serve as a reminder that an agency decision denying a cannabis-related application or request is far from the end of the road. Agency representatives may fail to follow both the requirements of the law and their own policies and practices when making decisions; however inadvertent such failures may be. When that happens, retaining litigators experienced with the nuances and challenges of fighting such actions can give applicants the second chance they deserve.