Pot Lottery Winners Chosen — And Downtown Tops Their Choices For Weed Shops

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Chairman of the Chicago Zoning Board of Appeals Farzin Parang picks a lottery ticket to allocate locations for cannabis dispensaries in Chicago, Friday, November 15th, 2019. Photo: James Foster for the Sun-Times

Chicago – Cresco Labs and PharmaCann were among the pot companies able to chose the most lucrative locations to sell cannabis when recreational pot becomes legal next year.

“Downtown! No finer place, for sure. Downtown! Everything’s waiting for you.”

The Petula Clark classic would be an appropriate anthem for a lottery held Friday at City Hall that determined which pot operators would have the rights to open shops in coveted areas of the city when recreational weed is legalized Jan. 1.

Pot operators lucky enough to have their names drawn early snatched up the limited rights to open stores in the downtown area first, followed closely by areas that covered the North Side and West Loop.

A geographic area encompassing parts of the South Side wasn’t chosen until the 21st pick.

The city was carved up into seven geographic districts for pot companies to choose.

A total of 31 selections were made by 19 different companies — some of which had multiple picks.

One of the state’s biggest marijuana operators, Cresco Labs, drew the first lottery pick and chose the Central District, which includes portions of downtown — although the city has prohibited sales in an area bordered by Lake Michigan, State Street, Division Street and Van Buren Street.

“We’re excited to be where the people are, where the entertainment corridor is, and we think that’s the best opportunity to run a successful business,” said Cresco Labs President Joe Caltabiano.

Envelopes, each containing a company name, were selected at random from a bingo-style drum that had been spun before the lottery began. City officials had wanted to use balls imprinted with company names, but during a test run this week, officials found they were too light and didn’t jumble, pop and mix as the drum was spun, but instead stayed at the bottom.

“For it to come down to a lottery is a very unique thing and it’s something that’s out of your control, so it was exciting, but it was very nerve-wracking,” Caltabiano said, noting that he said a few prayers last night with his family.

Only companies that already had a foothold in the state’s medical marijuana industry were included in Friday’s lottery.

Two companies with a high lottery pick passed on downtown.

One was Dispensary 33, which has a medical marijuana shop at 5001 N. Clark St. The other is Acreage Holdings LLC, which operates out of Rolling Meadows. Both companies instead chose the area west of downtown.

“I don’t need to play in that,” Dispensary 33 owner Zachary Zises said. “I’m not going to go up against Cresco” and the other big players, he said. “They’ve already got everything lined up, they’ve got all the money they need, so that would be too competitive of an environment for us to thrive in.”

PharmaCann, another of the state’s biggest operators, had four lottery picks, and was among the luckiest of the day. PharmaCann drew the 4th, 5th, 10th and 15th lottery picks and selected two Central District locations as well as ones in the North and Northwest Districts.

“We’re thrilled, we’re delighted. … We got our ‘A’ scenario,” said PharmaCann executive Jeremy Unruh. “I want to try to be modest, but I also know it’s the luck of the coin toss.”

PharmaCann officials might have chosen to open more clinics in the suburbs instead if they couldn’t get into the top neighborhoods they wanted, Unruh admitted.

“A lot of our strategy was dependent on what happened today,” he said.

One of the biggest companies that didn’t have luck on their side Friday was GTI.

Although the company, which has locations in legalized states around the country, had three chances for a high lottery pick to secure a spot in the downtown market, they weren’t drawn until the 16th pick. At that point, none were left.

GTI exec Dina Rollman put a good face on it.

”We are very happy,” Rollman said. “We don’t prefer one set of customers over another.”

Now the scramble begins to lock down specific locations for pot shops, apply for zoning and begin construction to open as soon as possible after the New Year.

“We have letters of intent on some properties, meaning a non-binding, ‘Hey, we want to lease this space from you and here are the general terms,’ but everything was contingent upon this lottery,” Unruh said.

Officials did not reveal the exact locations of the sites where they hope to operate Friday.

Most medical marijuana clinics already open in Chicago plan to sell recreational marijuana, too.

After being selected through the lottery, applicants are required to host at least one community meeting in the ward where they hope to open up shop before receiving a special-use zoning permit. The zoning board will only hold one other meeting this year on Dec. 20 — meaning the timeframe to meet those requirements is incredibly tight.

The number of recreational pot shops in each district will initially be capped at seven but could be increased to 14 by May 1, when another batch of licenses is made available to firms that don’t already have an interest in the state’s pot game.