The Illinois Supreme Court will soon weigh in on the question of whether Illinois’ state government violated its own laws – and perhaps even a court order – when it granted a license to a company to develop a marijuana growing site in Aurora.
The decision could have lasting implications not only for the state’s marijuana dispensary program, but local zoning laws across Illinois.
The state high court has agreed to hear an appeal from Medponics, a Lake County company seeking to develop one of 12 state-licensed marijuana cultivation centers in Illinois.
Melissa Murphy-Petros
| Wilson Elser
Medponics has worked for years toward its goal of opening the cultivation center in the far north suburban city of Zion. Their plans have been enthusiastically backed by Zion city leaders, who see the facility as a boon for their local economy and their city budget – particularly amid the economic devastation wrought by the COVID-19 pandemic and the state’s response to the virus.
However, the license coveted by Medponics was awarded by the Illinois Department of Agriculture in 2018 to a giant competitor, Curative Health.
Curative secured permission from the city of Aurora, subject to state approval, to open a cultivation center in the west suburb, the state’s second largest city.
Curative is affiliated with New York-based Columbia Care, one of the country’s largest operators in the rapidly growing cannabis cultivation and dispensary industry.
Under the state law, known as the Compassionate Use of Medical Cannabis Pilot Program Act, which established Illinois’ medical marijuana pilot program, the state pledged to grant one cultivation license for each of the state’s 12 police districts.
Medponics and Curative were among the companies applying for the license from District 2, which includes the suburban counties of DuPage, Kane, McHenry and Lake, as well as DeKalb County.
When the Department of Agriculture selected Curative to receive the lucrative license in 2015, Medponics filed suit.
The legal challenge asserted the state agency ignored the rules within the law in deciding Curative should receive the license. The legal challenge centers on how to define “residential zoning.”
In Illinois and many other parts of the country, cities and many counties have zoning ordinances on the books, to help guide development. Under these rules, cities often establish different zoning categories and districts.
Typical zoning classifications include residential zones, for areas with homes; commercial zones, for areas with retail or office-based businesses; and industrial zones, for the most intense business uses. However, different cities often include various other categories or zoning subcategories, based on their own needs and desires.
And, within different zoning classifications, city governments typically reserve to themselves the ability to grant so-called special use permits, which allow for the development of certain kinds of buildings and uses within otherwise exclusionary districts.
For instance, cities can grant special use permits allowing for the development of churches, schools or medical offices within residential zoning districts.
Under the state medical marijuana act, lawmakers specified cannabis cultivation centers cannot be opened within 2,500 feet – or a little less than a half mile – of any locations with residential zoning.
In Medponics’ lawsuit, they noted the proposed location for the Curative cultivation center in Aurora fell within that 2,500 foot setback. They said this should have disqualified the project from receiving the state license.
The legal challenge also secured Medponics’ spot in the race for the District 2 license. Under the law, after the state selected a successful applicant, any applicant that did not challenge the award would lose their chance to obtain the license, even if the award were overturned by the court.
Medponics’ argument concerning the setback rules was enough to persuade a Lake County judge, Michael J. Fusz, who is now retired, to issue an order stripping the cultivation license from Curative in 2017.
The order, though signed by Judge Fusz, was prepared by Curative’s lawyer, William F. Moran, of the Springfield firm of Stratton, Moran, Sronce & Appleton.
Included in that order was a provision which purports to stay “enforcement of the nonmoney judgment” in the order “pending determination of any appeal.”
The Department of Agriculture then interpreted that language to mean it was still free to award the license to Curative.
On appeal, the Illinois Second District Appellate Court also sided with Curative, overturning Fusz’s judgment and declaring the Department of Agriculture was correct in granting the license to Curative.
The appellate court reasoned the Department of Agriculture was within its authority to interpret the medical marijuana law to mean lawmakers only prohibited development of cultivation centers within 2,500 feet of any property zoned “exclusively” for residential use.
Since the city of Aurora allows for special use permits for churches, schools and other non-residential buildings within its residential zoning districts, Curative should be allowed to secure the license and build its cannabis cultivation center at its chosen Aurora site.
Medponics responded by appealing to the Illinois Supreme Court, asserting the appellate court’s reasoning stands Illinois zoning law on its head, and essentially allows a state agency to rewrite state law and possibly even flout a court order.
By effect, allowing the reasoning advanced by Curative and the Second District court to stand, would pare back the reach of the state law, applying it only to cities that have areas zoned exclusively for residential use, with no special use permits allowed, Medponics argued.
That stands in contrast to the “unambiguous” language of the 2,500-feet-setback rule and the expressed intent of lawmakers to apply the medical marijuana law and its accompanying rules throughout the state.
The medical marijuana law’s “cultivation center location requirement is unambiguous,” Medponics argued in a brief filed with the Illinois Supreme Court in June 2020. “It does not contain the limitation advanced by IDOA and Curative here, and the limitation cannot be implied by the court.”
“…Medponics does not contend that the rule at issue is invalid. Medponics contends only that IDOA’s interpretation of the rule is wrong and asks only that the rule be applied as it is written,” Medponics wrote in its brief.
In response, Curative and the Illinois Attorney General’s office, on behalf of the Department of Agriculture, have not disputed that the law does not attach the modifier “exclusively” to the phrase “area zoned for residential use.”
Rather, they argue the state agency is within its authority to craft rules interpreting and applying the law, even if it means reading “area zoned for residential use” to mean “exclusively zoned for residential.”
“Nowhere does Medponics provide any authority, precedent or support of any kind for the proposition that the Legislature intended that all cultivation centers to be located more than 2,500 feet ‘away from areas where people live,’” Curative wrote in its reply brief to the Illinois Supreme Court.
And even if the Supreme Court finds Medponics’ reading of the law is correct, the Attorney General argued the high court should still rule for Curative, because it should simply defer to the regulatory agency’s reading of the law.
The Supreme Court agreed last January to hear the case, but it did not appear on the court’s January 2021 term docket. The court has not yet indicated when it will hear oral arguments in the case.
Medponics is represented at the Supreme Court by attorneys Melissa A. Murphy-Petros and Kathleen M. McDonough, of the firm of Wilson Elser Moskowitz Edelman & Dicker LLP, of Chicago.