Marijuana dispensary at former Rainforest Cafe in River North gets zoning approval

A controversial plan to open a fifth marijuana dispensary within Chicago’s River North neighborhood won approval early Saturday, despite residents’ concerns it would turn the area into a “pot district.”

The Zoning Board of Appeals awarded a special-use permit to PTS Corp. and Bio-Pharm LLC to open a recreational cannabis store in the former Rainforest Cafe at Clark and Ohio streets. The project still needs state approval.

The approval came after a daylong meeting that lasted until 1 a.m., and a four-hour hearing on the dispensary alone that one board member called a record.

The board also approved a permit to former Alderman and state representative Rickey Hendon and his children to open a Green Rose dispensary in the South Loop, at 1233 S. Wabash Ave., and a dispensary by High Hopes Chicago at 622-24 W. Roosevelt Road.

The rulings came just days after another Green Rose dispensary opened at 612 N. Wells Ave., and Ivy Hall Dispensary opened in Wicker Park, as the first two operating social equity weed stores.

PTS Corp. previously was rebuffed in its attempt to move its Consume Cannabis shop to the site from its location in Norwood Park, because state law prohibits new dispensaries from locating within 1,500 feet of existing pot stores. But PTS since teamed up and reapplied with Bio-Pharm LLC, a new social equity license holder.

Social equity companies, generally defined by state law as having a majority owner who’s had a prior low-level cannabis arrest or conviction, or having lived in an area with high poverty or a large number of cannabis arrests, generally are exempt from the distance requirement.

Neighborhood resident Robert Brown argued that the co-application was illegal because state law doesn’t explicitly provide for co-applicants to qualify for social equity exemptions. Doing so, he said, would set a precedent allowing any company to get social equity benefits.

“Enough is enough,” Brown said, “This should always have been dead on arrival. It’s a sham.”

Bio-Pharm entered a conditional management service agreement with PTS. Such agreements were previously prohibited, but the Illinois Department of Financial and Professional Regulation issued guidance in July and August that allows the agreements under certain circumstances. Under its agreement, Bio-Pharm will run the dispensary but pay PTS for its expertise, and will pay back PTS for up to $10 million in renovations.

Ultimately, while city officials debated whether to grant a special-use permit, state officials will decide whether to allow the new dispensary to be so close to four others that are already operating within a few blocks of each other.

The PTS investor with the greatest ownership share, at 22%, according to city records, is David Flood, of the family that owns Flood Brothers Disposal. The next largest owner listed is Dr. Christine Heck, with 10% interest. Its CEO Terry Peterson, who is Black, is a former Alderman and former executive for the CTA and the Chicago Housing Authority. Its attorney is former city of Chicago corporation counsel Mara Georges, who city records show PTS was paying $5,000 a month.

“There is nothing underhanded going on here,” Georges told the board. “It is sanctioned by the state.”

Though many lawmakers had intended social equity to promote minority ownership in the nearly all-white industry, Bio-Pharm qualified for social equity because its majority owner, Michael Munroe Jr., had a low-level cannabis arrest from the 1970s. Munroe Jr. and his sons, Michael Munroe III and Bio-Pharm COO Kevin Munroe, who are white, come from Pickens Kane Moving & Storage Co. in Chicago, which bills itself as the largest commercial relocation company in Illinois.

Tyrone Muhammad, founder of Ex-Cons for Community and Social Change, who is trying to market his own cannabis brand to dispensaries, had previously called for greater minority representation in the company.

In response to residents’ concerns, PTS promised 24/7 armed security, with four armed security guards on site during business hours, and regular patrols roaming outside. Company officials planned to remove the decorative mushrooms and giant frog outside the store, and totally renovate the interior and exterior. They also called for 90 surveillance cameras, with motion detectors and silent alarms, and a constant video feed to police, as required by law. They also planned to provide free parking at nearby lots.

Brian Israel, the head of the River North Residents Association, had voiced no objection to the proposal, saying that residents’ initial concerns about marijuana stores had proven unfounded. But several neighborhood residents objected, raising worries about crime, and saying “pot parties” on area sidewalks had driven some neighbors away.

PTS, which stands for Progressive Treatment Solutions, operates a cultivation center in East St. Louis, as well as 11 cannabis dispensaries in various states, with four in Illinois, and one other in Chicago.Both PTS and Bio-Pharm have “significant” minority ownership, officials said.

PTS officials anticipate opening the store in 2023.