Judge halts issuance of pot-growing license in Kankakee; allows discovery and sets hearing for March 10

A Cook County judge has issued a temporary restraining order in a lawsuit that challenges the licensing process behind the state's new medical marijuana program.

Cook County Circuit Judge Kathleen Kennedy delivered her ruling Wednesday, the day after hearing arguments from attorneys representing PM Rx LLC, a company that failed to garner state approval to grow marijuana in the Kankakee area, and the Illinois Department of Agriculture.

PM Rx sued the state department last week, accusing it of failing to follow its own rules for reviewing and scoring applications for medical marijuana cultivation licenses and not conducting the required background checks before awarding Cresco Labs LLC a permit to grow in Illinois State Police District 21.

In its suit, PM Rx claims Cresco's lead cultivator and consultant Kayvon Khalatbari has publicly admitted his past history as a dealer and consumer of illicit drugs. It also argues that Cresco, which has two other permits to grow in other parts of the state, lacked the funding necessary to be awarded licenses in three total districts.

Kennedy on Wednesday granted PM Rx's request for the temporary restraining order, effectively enjoining the state from issuing a grow permit in District 21 until she can determine whether a preliminary injunction should be entered.

The judge, according to court records, also ordered the state to fork over applications from all of District 21's cultivation center applicants, documents that only the attorneys will be able to see as the state's medical marijuana program provides confidentiality to applicants seeking cultivation and distribution licenses.

In addition, records show Kennedy told PM Rx to amend its complaint to add Cresco Labs as a party and scheduled a hearing for March 10 to discuss discovery and schedule a preliminary injunction hearing.

The state was represented by Alice E. Keane of the attorney general's office during Tuesday's hearing, when Chicago attorney John N. Rooks of Fisher Kanaris argued on behalf of PM Rx.

Gov. Bruce Rauner's administration last month announced the winners of 18 licenses to grow marijuana and 52 permits to sell it under the state's medical marijuana program, a job Pat Quinn left on the governor's desk after losing the election to the Republican businessman.

Following the filing of PM Rx's lawsuit last week, Rauner's office issued the following statement:

“We understood and acknowledged that the process the Quinn administration applied would likely expose the State to significant and costly litigation. We believe the steps we took to fix the errors in the Quinn selection process reduce, but cannot entirely eliminate, the risk of litigation. We will fully participate in any judicial review of the selection process and comply with any orders issued by a court as it relates to this particular applicant or any other applicant that seeks judicial review.”

A newly formed association that advocates for the “honest and straightforward” application and enforcement of the state’s medical cannabis law – the Illinois Cannabis Therapeutics Association (ICTA) – is closely observing what happens in PM Rx’s case.

“The ILCTA is committed to ensuring a fair and transparent process for therapeutic cannabis in Illinois,” said the group’s executive director Scott McPherson. “We support strict enforcement of rules and regulations surrounding therapeutic cannabis cultivation, distribution, and patient use.”

Ann Maher contributed to this story.