Chicago holds lottery for chance to sell legal weed in the city: ‘African American participation at this point is zero. That’s a problem.’

Long before the lottery to determine which marijuana dispensary companies would get to sell recreational pot in Chicago next year, the room in City Hall was packed, with business owners, company reps and executives filling every seat.

Industry experts and weed firm representatives crowded into the room on Friday, standing along the walls and spilling out into the hallway for a chance to try their luck at getting one of the more lucrative locations in the citywide weed sales bonanza set to start Jan. 1.

Though Mayor Lori Lightfoot has preached equity, the crowd was not diverse. It was an overwhelmingly white and male group decked out in business suits, casual sweaters with their company logos embroidered into the front, and hoodies representing elite Catholic high schools.

Paul Nowacki, of Elevele, traveled from Highland Park and showed up to City Hall hours before the lottery to make sure he got inside and settled before the action began. But because the lottery randomly selected the firms, he wasn’t called on until the process was nearly done and the prime spots were taken.

Still, Nowacki said he was pleased with getting a special permit to operate in the Far South District.

“It’s a privilege to participate and to get to be one of the few dispensaries chosen,” he said afterward. “We didn’t get the location we wanted, but on the Far South Side there is lots of opportunity, so we are glad.”

Starting in January, existing medical dispensaries will be the first allowed to sell recreational marijuana in the city, thanks to a law the City Council passed last month.

A large portion of downtown is off limits for legal sales, but the city will allow up to seven dispensaries to operate in each zone throughout the city.

Thirty-one applicants vied for the 38 permits that were up for grabs, so each of the prospective pot business operators had a chance at landing a permit. Several applied for multiple locations.

Current medicinal marijuana dispensary operators got priority access in obtaining a recreational sales permit.

Of the 38 permits available, three landed in the North District, four in the Northwest District, five in the Southwest District and six each in the West and Southeast districts.

Once the lottery was completed, there were three permits left in the Southeast district and four remained in the Far South District. The rest of the city permits sold out.

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The Central District, which is closest to downtown and the Loop, was the first area to sell out of permits. The North District was the second.

George Archos of Healthway Services got a permit to operate in the Northwest District, which is where he wanted to be, he said.

“We’re excited. It was a fair process,” he said of the lottery. “We like the community we are in. It’s a community I’m familiar with, and I’m looking forward to doing business there.”

The permit is just one step in the process. The firms still have to find an actual location, get the proper business credentials, hire staff and set up shop.

The lottery lasted about 45 minutes. First, the representatives checked in, and each had a card placed in the golden lottery tumbler. Those were fished out manually. When the dispensaries were called, the representatives had to answer with the district where they wanted to do business.

For Dina Rollman, of Green Thumb Industries, Friday’s auction netted three permits — in the West, Northwest and Southwest districts.

“We have five dispensaries operating in the state, but none in Chicago,” she said. “We are very excited, as a Chicago-based company, to be able to operate here. Our founder … lives in Chicago and our headquarters is here. As we’ve built our company, all of the efforts have been outside. So, it feels like on some level, we’re bringing it home.”

As it all unfolded, Black Caucus Chairman Ald. Jason Ervin, 28th, stood at the front of the room, surveying the process and silently taking it all in. Not all of the people crowded in the room, taking copious notes and whispering to their team members, were actual dispensary owners.

But with the exception of a few women and two African Americans in the room, most of the representatives for marijuana businesses were white and male, Ervin pointed out.

“I wanted to see for myself how many applicants and where they were deciding to cite their locations. And it proved what I thought: Our communities are going to get left behind,” he said. “This will probably generate a billion dollars’ worth of sales in the city. With no African American participation, I just think that’s a problem that needs to be addressed.”

Lightfoot issued a statement acknowledging the lack of diversity and said she was not satisfied with the current equity in the city’s cannabis industry. She vowed to improve minority representation by next May.

“Transforming the cannabis industry won’t be easy, but I want to make clear that we are working with advocates fighting for equity in this emerging industry to ensure we help diverse businesses thrive and fix the unjust policies of the past,” Lightfoot said in the statement. “That’s my pledge.”

Ervin, meanwhile, has sponsored an ordinance to delay the beginning of sales until June, but there’s no indication the council will act on it. And, even if there is a delay in starting recreational sales, that’s no guarantee that the businesses will look more diverse.

“Right now, how much space is there for anybody else to come to the table?” Ervin asked. “I’m concerned how this plays out. The South Side has come up short in this effort, and African American participation at this point is zero. That’s a problem.”

lbowean@chicagotribune.com

Twitter @lollybowean