A new federal lawsuit accuses a “caretel” of influential large companies, including a company associated with the family of Gov. JB Pritzker, of exploiting political connections to improperly dominate Illinois’ marijuana marketplace.
On April 18, an organization called True Social Equity in Cannabis filed suit in Chicago federal court against five corporate entities in the business of selling recreational marijuana under Illinois’ cannabis dispensary licensing regime.
The complaint identifies defendants as Green Thumb Industries, Akerna Corporation, Surterra Holdings Inc., Verano Holdings Corporation and ILDISP LLC, a group of companies the complaint labels collectively as the “Chicago Cartel.”
The complaint asserts the “Chicago Cartel” have conspired to allegedly pretend to be competitors, when they have actually collectively monopolized the sale of recreational marijuana in Illinois, driving the price of marijuana to levels not seen in other states that have legalized and regulated the sale and use of recreational marijuana.
“The ‘Chicago Cartel’ charges supracompetitive prices for marijuana and charge the highest prices for marijuana in the United States in Illinois,” the complaint states.
The complaint asserts a pound of marijuana that sells for $300 in California can fetch more than $4,000 in Illinois.
The complaint claims the companies are all connected to the Pritzker, Wrigley and Kovler families. The Pritzker family, including Illinois Gov. Pritzker, gained their fortunes largely from the Hyatt brand of hotels, among other interests; the Wrigley family from their chewing gum and candy companies; and the Kovler family from various business interests, including the “Jim Beam bourbon fortune.”
All three families are also known for a range of philanthropic ventures in Chicago and elsewhere.
According to the complaint, Akerna is controlled by the Pritzker family; Surterra by the Wrigleys; and Green Thumb by the Kovlers.
The complaint accuses the various companies sell common products, share technology and information, use shell companies to operate Illinois marijuana dispensaries together, and “have interlocking directorates and managers.”
The complaint asserts the “Cartel” has existed in various forms since it was allegedly conceived in the mid-2010s, allegedly through the machinations of one of former House Speaker Michael Madigan’s friends and top associates, Mike McClain. Both McClain and Madigan stand indicted on different political corruption-related charges.
The complaint asserts the “Cartel’s” actions amount to violations of federal antitrust law.
True Social Equity in Cannabis identifies itself in the complaint as “an unincorporated association,” created by marijuana consumers and activists to oppose “cannabis monopolization by members of the ‘Chicago Cartel’ in Illinois and the United States.”
They claim they have suffered legal injuries “in the form of prices paid by members, lost job opportunities for members, the inability of members to obtain licenses in state-protected marijuana markets and investment losses.”
Outside of court, the group has lobbied and protested to increase the number of recreational marijuana dispensing licenses available specifically to Black people, and other people of color.
The complaint seeks court orders blocking the five companies from selling marijuana in Illinois and the U.S., and “divesting Defendants of all assets.”
The plaintiffs are represented by attorney Mark T. Lavery, of Langone Law, of suburban Bannockburn.