ILLINOIS DEFICIENCY NOTICES: WHAT DISPENSARY APPLICANTS CAN EXPECT

ILLINOIS DEFICIENCY NOTICES: WHAT DISPENSARY APPLICANTS CAN EXPECT

The Illinois Department of Financial and Professional Regulations (IDFPR) is expected to issue its “supplemental” deficiency notices for dispensary license applicants “soon,” with soon being a relative term given this supplemental deficiency notice round was announced in early fall of 2020. Nevertheless, because the Illinois Department of Agriculture (IDOA) recently issued deficiency notices to craft grower, infuser, and transporter applicants, we think the IDFPR notices may be on the horizon. In preparation, we would like to share some observations from the IDOA notice round.

Key Differences:

  • It is important to highlight that IDOA and IDFPR are different agencies that had different application processes. The applications exhibits themselves were different, the applications had different point values, and IDOA promulgated regulations in advance of its application process whereas IDFPR did not.
  • Perhaps the most important difference is that IDFPR has released applicants’ scores so each applicant should know how they did on a particular exhibit, which was not the case for craft grower, infuser, and transporter applicants because IDOA has not released any scores. As such, those applicants were left wondering whether they were searching for a needle in a haystack on a particular deficiency because they only missed a few points, or in fact were dealing with a significant point deduction.
  • The final major difference to keep in mind is the limitations on licenses an applicant could hold on the craft grower, infuser and transporter side. Generally speaking on the craft grower side, because entities were limited to only winning one license this round, it is likely that most applicants submitted only one application. This means such an applicant cannot easily identify a scoring discrepancy within its own application. Conversely, on the dispensary side, many applied for multiple licenses in multiple regions and received varying scores on virtually identical applications, which arguably shifts the burden onto IDFPR to address such scoring inconsistencies. As such, we expect the IDFPR notices to have some component of its deficiency notice go to addressing this issue.

Possible Similarities:

  • IDOA’s deficiency notices raised two concepts—“missing information” and not receiving “all available points” on a particular exhibit. Just because a particular exhibit did not receive “all available points” (a perfect score), does not necessarily mean it was missing requisite information. But the notices did not identify why points were deducted or what information was missing. We think that IDFPR’s notice will be similar in this regard.
  • IDOA’s deficiency notices provided “Scoring Measures” for each exhibit. This was helpful to understanding how an exhibit was being analyzed and what content was at issue. The notices identified what measures were deficient on a particular exhibit.
  • IDOA’s deficiency notices provided a citation reference matrix so an applicant can know what sections of the Act and Regulations go to a particular Scoring Measure. This should give the applicant some notice as to what the deficiency could be about. However, some citation references are extremely broad, making it difficult to home in on the problem.
  • IDOA’s notices only allowed applicants to submit a supplement to cure the identified deficiency. Applicants were not permitted to resubmit entire revised or supplemented exhibits or to submit information that did not relate to a deficiency. In other words, if there are 3 scoring measures for a particular exhibit, and you received a deficiency for measure 2, you could not submit supplements relating to measures 1 and 3.
  • IDOA required applicants to take a survey prior to submitting supplemental information.
  • IDOA required redacted and unredacted copies of the supplemental submissions.

Curing deficiencies can be a complicated and difficult process, particularly for those who are unable to discern why they received a point deduction. The most significant thing for dispensary applicants to keep in mind is that unlike the craft grower, infuser, and transporter applicants, here you are chasing a perfect score. That is because 21 applicants have already achieved perfect scores. Dispensary licenses are expected to be awarded through a lottery to perfect score getters. Thus, anything less than a perfect score will likely exclude you from the lottery as it is currently structured. Applicants are being held to the highest bar of perfect scores, making that needle in the haystack analysis all the more critical.

For assistance with responding to IDFPR deficiency notices or questions about the process, please contact us and be sure to follow our blog to stay up to date on Illinois cannabis licensing and everything else concerning the cannabis industry.

Source:  https://cannabis.lockelord.com/2021/02/15/illinois-deficiency-notices-what-dispensary-applicants-can-expect/

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