The Chicago Sun Times is reporting…
KPMG was given two no-bid contracts to grade firms applying to open new cannabis businesses, but the process hit a standstill because of the firm’s ban on travel during the pandemic and a contract provision requiring it pick up applications by hand.
When the operators of Illinois’ medical marijuana businesses were given first crack at growing and selling recreational weed in the state, everyone else looking to break into the new industry was forced to wait months to even apply for licenses. They then saw their prospects put on hold when the COVID-19 pandemic brought everything to a halt.
Meanwhile, one company that doesn’t even deal in cannabis has profited handsomely in that time.
KPMG, a “Big Four” accounting firm based in the Netherlands with nearly $30 billion in revenues last year, was awarded nearly $7 million in no-bid contracts to grade applications for new recreational pot licenses, according to records obtained by the Chicago Sun-Times.
KPMG is getting nearly $4.2 million through a contract with the Illinois Department of Financial and Professional Regulation, which oversees dispensaries, and $2.5 million from the Illinois Department of Agriculture, which is tasked with regulating cultivation operations and other cannabis business.
The payments to the firm amount to more than 12% of the state’s $52.8 million in cannabis tax revenues during the first six months of recreational legalization.
State officials didn’t open the contracts up to competitive bidding to speed up the process. But as it turned out, the delay in issuing 75 licenses to run pot dispensaries came in part because of a travel ban KPMG instituted in the wake of the COVID-19 outbreak and a provision in its contract with the state requiring the applications be picked up by hand.
And while officials’ decision to go with an out-of-state firm was to prevent insiders from getting a leg up in the process, the delays lengthened the head start already given to the existing clout-heavy pot firms, including some that are publicly traded and another that counts a high-powered lobbyist as an investor. That’s helped them profit even more from the robust weed sales during the pandemic.