Illinois Adult Use
Illinois Adult Use on Friday became the country’s first state to legalize recreational marijuana cultivation and sales through its Legislature, a landmark move that paves the way for the creation of one of the nation’s largest adult-use cannabis markets offering “huge” business opportunities.
“It’s a state of 13 million people with a very large tourist population in the Chicago area, so I think the business opportunities are huge,” said Kris Krane, co-founder and president of Arizona-based 4Front Holdings, a multistate operator and consulting firm. “But the biggest benefits go to the incumbent medical marijuana operators,” Krane noted, referring to the state’s 50-plus licensees. “It doesn’t have the robust licensing structure that we have in some western states.”As a result, it could take longer to realize the annual revenue projections because of the relatively severe constraints on the number of rec stores in the state.
Illinois Adult Use
Cannabis possession and sales
Starting January 1, 2020, adults 21 and older could possess cannabis and purchase cannabis products in licensed stores. Possession would be limited to:
- 30 grams of raw cannabis;
- Cannabis-infused product or products containing no more than 500 mg of THC; and
- Five grams of cannabis product in concentrated form.
Non-residents could purchase half that amount, or 15 grams of cannabis, 250mg of THC in a cannabis-infused product, and 2.5 grams of concentrated cannabis product.
Expunging criminal records
HB 1438 would usher in the most sweeping criminal justice reform so far in the cannabis movement.
- The governor’s clemency process would be used for convictions for up to 30 grams. These expungements would be automatic.
- For amounts of 30-500 grams, the state’s attorney or the individual can petition the court to vacate the conviction.
In all, around 770,000 cannabis-related cases would be eligible for expungement, according to the Illinois State Policy Advisory Council.
Social equity program: The program provides benefits directly to those who have suffered because of the war on cannabis. Not only does HB 1438 remove convictions through expungement, it specifically provides additional points for business applicants, access to financial resources for start-up costs, and provides resources to communities that were hardest hit from the war on cannabis.
Illinois Adult Use
How it works:
A “social equity applicant” is a business whose ownership or staff have been directly impacted by the war on cannabis. These are people who have either been arrested and convicted of a cannabis-related offense, or a person with strong ties to a community that has been disproportionately impacted by both poverty and cannabis drug law enforcement. Such a business must be owned by 51% or more of those who qualify, or for businesses with 10 or more staff, 51% of the workers must qualify.
Social equity applicants qualify for assistance in various ways:
- Applicants for business licenses that qualify as social equity applicant would receive additional points on applications in the scoring system.
- A Cannabis Business Development Fund would provide financial resources for business start-ups, which can be used to offset licensing fees or used for low-interest loans. The fund would start with $12 million of funds as soon as possible after July 1, 2019, and additional early fees would be transferred into it.
- Local colleges can obtain a license for training programs to help residents prepare for cannabis industry-related jobs.
- The 3R Program (the Restore, Reinvest, and Renew Program) would allow community groups to develop programs to benefit disadvantaged communities.
Training: The Department of Agriculture and Community College board will create up to eight pilot programs to train students to work in the legal cannabis industry. At least five of the eight programs must be for schools where at least 50% of the students are low income.
Home cultivation for patients
Medical cannabis patients could purchase cannabis seeds and grow up to five plants at their residence. There are limitations on home growing, however, including a cap of five plants per household, regardless of the number of residents who are 21 or over, and plants would need to be secured and out of view by the public. Home cultivators can keep what they grow, but possession limits still apply outside the residence, and sales are prohibited unless part of a licensed cannabis business.
The following types of cannabis business licenses will be issued:
Dispensary: Provides cannabis products to adult consumers.
Processor: Infuses products such as edibles with cannabis extract.
Transporter: Transports cannabis between business licensees.
Craft Grower: Can grow between 5,000 and 14,000 square feet of canopy space and may be separately licensed a processor and a dispensary at the same facility.
Cultivation Center: Can grow up to 210,000 square feet.
Illinois Adult Use
The transition timeline
January 1, 2020, sales begin. Existing medical cannabis cultivators and dispensaries will cultivate and provide to adult consumers until additional licensees can apply and get approved.
January 7, 2020, applications for processors, transporters, and a new category of cultivator called a craft grower would be published for business applicants.
March 15, 2020, the state would begin receiving and processing new licenses.
May 1, 2020, new dispensaries licenses issued, and the state begins a disparity and market study of the cannabis industry.
July 1, 2020, up to 40 craft grower and processor licenses will be issued, along with an unlimited number of transporter licenses.
Once the disparity and market study is complete, the state can issue additional licenses if needed. These licenses must take into account the findings of the disparity study.
Illinois is taking a unique approach to cannabis taxation. Rather than a blanket tax for all cannabis products, Illinois will charge a tax rate based on the relative potency of the cannabis and the type of product. The more concentrated THC is, the higher the tax rate:
10% tax would apply to cannabis flower or products with less than 35% THC
20% tax would apply to products infused with cannabis, such as edible products
25% tax would apply tany product with a THC concentration higher than 35%
In addition to these scalable tax rates, the state’s regular 6.25% sales tax rate also applies, along with local taxes of up to 3.5%. The range consumers would pay at the register would be between 19.55% to 34.75% retail tax, depending on the product’s potency.
Source: Marijuana Policy Project
Illinois Adult Use
Illinois – Secrecy – Corruption
Illinois – Secrecy – Corruption – here we go again, Illinois politicians just couldn’t resist an opportunity to perpetuate, graft, “pay to play”, and corrpution being baked into the proposed adult-use cannabis legislation. But House Speaker Mike Madigan, a Chicago Democrat, told a group of graduate student reporters from the University of Illinois Springfield’s Public Affairs Reporting program Monday that it could be difficult to get 60 House lawmakers, the threshold needed for the bill to pass that chamber, to agree on some of the language in the proposal. We think that is code for good old “PAYOLA”.
A sweeping secrecy provision that has hampered the ability of journalists, lawyers, academics, and interested citizens to assess Illinois’ medical cannabis program has been partially maintained in the working version of proposed legislation that would legalize cannabis for adult-use, which is headed toward a vote—possibly by the end of the month.
That has prompted open government experts and others asked about it by Cannabis Wire to call for greater attention to transparency before the bill is further considered.
The secrecy provisions could be serious. The Illinois medical cannabis law bars state officials from disclosing basic information about cannabis business license holders and applicants, making it difficult to know who received lucrative licenses and why. Starting on page 149 of the new proposal to legalize adult-use cannabis, sponsored by Chicago-area lawmakers Senator Heather Steans and Representative Kelly Cassidy, the confidentiality section would make nearly all information about applicants and licenses a secret:
“[I]nformation received and records kept by the Department of Financial and Professional Regulation for purposes of administering this Article are subject to all applicable federal privacy laws, confidential, and exempt from the Freedom of Information Act, and not subject to disclosure to any individual or public or private entity,” the bill reads.
Matt Topic, a Chicago-based attorney who frequently handles Freedom of Information Act-related lawsuits, reviewed that language and another section of the bill that mentions FOIA at Cannabis Wire’s request. He said the bill’s secrecy provisions are troubling.
“There is a tendency in Springfield for the General Assembly to impose a lot of secrecy without thinking this through,” he said. Confidential business information that companies might not want to be made public would already be covered under existing exemptions to Illinois FOIA law, he said. There might also be a good case for other types of exemptions for cannabis businesses—for example, building security—but basic application and owner information should be available to the public, he said.
“If we want to know if less-than-qualified insiders are getting lucrative [licenses] because of their connections, we need to be able to see this kind of stuff,” Topic said. “Anytime there is secrecy like this, people should rightfully be concerned about what could go wrong.”
llinois has a track record of corruption at the state and local levels. Before the last governor, Bruce Rauner, the previous two were convicted of charges related to corruption in office.
Illinois – Secrecy – Corruption
Rose Ashby, a Steans staffer working on the cannabis bill, insisted that legislators had not meant to include such severe language about transparency. She said the small section of the more than 500-page bill was the result of “rogue cut/paste during drafting” which had “resulted in some unintentional internal contradictions.” Another section of the bill on page 271, she said, contains language about the legislature’s intent to be transparent about the licensing process and would be emphasized in a new revision. It isn’t clear when amendments to the bill are coming and a Senate committee vote has not yet been scheduled, she said.
“The intent is that the ownership will be transparent,” Ashby told Cannabis Wire. “Applications and licenses are subject to FOIA.”
Representative Cassidy told Cannabis Wire in an email that she disagrees with the interpretation that the bill would not provide adequate transparency, while acknowledging that the bill’s confidentiality language is a “confusing section.” Cassidy said the bill “provides transparency while offering appropriate protections for sensitive data.”
As Cassidy sees it, the bill seeks to ensure that plans for security or confidential business information are not released while allowing the public to see key aspects of the new adult-use cannabis program, such as who own licenses.
Illinois is far from the only state to be less than transparent with its cannabis licensing programs. As Cannabis Wire previously reported, many states’ secrecy provisions are far-reaching when it comes to license holders and their stakeholders.
Some policymakers have argued that federal prohibition makes it difficult for states to be open about everyone involved in state-legal programs, who could, technically, be targeted at any time by federal prosecutors or regulators, although a widespread crackdown has not occurred in nearly a decade. Arizona, for example, doesn’t even supply the locations of dispensaries or the names of physicians willing to write medical cannabis recommendations. Moreover, just as some transparency advocates argue that openness around the licensing process can curtail corruption, government officials in some states contend that withholding information about those who make licensing decisions may prevent efforts to influence the process.
“There’s a real policy tension here,” Andrew Freedman, a cannabis legalization expert who served as Colorado’s first Director of Marijuana Coordination, previously told Cannabis Wire. “For the most part, people want to know how big the industry is, where it’s concentrated, for this information to be part of public dialogue.”
Illinois – Secrecy – Corruption
Freddy Martinez, the director of the nonprofit open government advocacy group Lucy Parsons Labs, told Cannabis Wire that Illinois lawmakers should ensure that the adult-use bill provides for transparency given, especially, Chicago’s track record related to disparate policing in communities of color.
“It is well known that the Chicago Police Department’s marijuana arrest records show a strong racist enforcement, and this bill attempts to address this history,” Martinez said. “Without FOIA we can’t analyze the true impact of the restorative justice approach to this legalization bill.” In the proposed legislation, lawmakers have included provisions that would ensure past cannabis convictions are expunged and new dollars and business opportunities provided for communities that have been the most adversely impacted by the war on drugs. Progress toward those goals must be monitored, Martinez said.
An initial public hearing on the legislation was held last week by the Senate Executive Committee, with lawmakers and a representative from the office of Governor J.B. Pritzker indicating that at least parts of the bill related to home grow and expungements may be revised.
Lawmakers say they hope to pass the bill before the end of the legislative session, in just two weeks.
Illinois – Secrecy – Corruption
Illinois Adult-Use Update
Illinois Adult-Use Update – The Illinois Senate Executive Committee listened to about three hours of testimony Wednesday from those for and against a measure that would legalize the adult-use of cannabis. The hearing ended without a vote, and the bill’s primary sponsor and a representative of the governor’s office said they would consider making changes to incorporate concerns before the bill moves forward.
How far senators supportive of the bill would go in making changes to the measure—which was unveiled by Governor J.B. Pritzker a little more than a week ago—was unclear. But law enforcement and prosecutors’ concerns over provisions that would allow residents to grow up to five plants at home and the process by which records related to cannabis convictions would be automatically expunged were being evaluated, the bill’s supporters said.
Mitchell Davis, who sits on the board of the Illinois Association of Chiefs of Police, warned lawmakers that they were setting up a difficult situation for law enforcement when it comes to home grown cannabis. “There is no way of enforcing those things and no way of tracking it,” he said.
Representative Kelly Cassidy, a Chicago Democrat who is the bill’s chief supporter in the Illinois House, previously told Cannabis Wire that her brother-in-law’s quality of life was improved because of cannabis when he suffered from cancer, and she wants other patients who may not be able to leave their home to have easy access. She said she knew the provision would be controversial but hopes it can remain in the bill.
There was some confusion over a portion of the bill that would automatically expunge misdemeanor and low-level felony cannabis convictions, usually crimes related to those charged by police with possessing or delivering up to 500 grams of the drug. But because the bill only legalizes possession up to 30 grams, Deputy Governor Christian Mitchell was asked whether future charges of more than 30 grams would be automatically expunged as well. (The implication was that people could openly flout the 30-gram maximum if their charges would later be expunged.)
“We’ve heard criticisms of this provision,” Mitchell told senators. “We are looking to see if there is a way we can come to some compromise on this.”
There was also a discussion about whether the legislature could legally order automatic expungements of cannabis-related charges, as the power to issue pardons sits with the governor. Mitchell disagreed with that interpretation. “The legislature can mandate that a court expunge a record,” Mitchell said. “That said, we’re very open to other ways to streamline this process.”
The day’s most heated exchange came between Illinois’ NAACP state president, Teresa Haley, and Chicago Democrat Senator Kimberly Lightford. Haley, who repeatedly said “say no to weed, plant that seed,” said, “I am tired of legislators again getting rich on the back of poor people.”
Lightford said, “I think your comment is inappropriate,” to which Haley replied, “I think your response is inappropriate,” before the committee chairman interrupted them.
Other witnesses discussed the effect on youth use and the debate over whether long-term or heavy use of cannabis causes psychosis, something that has become hotly debated nationally in recent months and where there is some disagreement among academics and researchers who have studied the subject.
Still, Albert Mensah, a physician, said he wanted to warn lawmakers about cannabis use. He testified that he was regularly seeing men who had become impotent and suffered mental illness because of cannabis. “I don’t like seeing young men who are schizophrenic and impotent brought to me by their fathers,” he said. “They thought marijuana was benign. Marijuana is not benign.”
Others in the medical community who testified disagreed with that assessment.
Republican Senator Jason Barickman suggested that some of the tax revenue derived from the legal sale of cannabis go toward communities affected by the opioid crisis. One of the bill’s sponsors, Senator Toi Hutchinson, said lawmakers should keep in mind one of the bill’s primary goals, which is to benefit communities where arrests for cannabis were rampant and affected generations.
“That is very different from the people affected by the war on drugs,” Hutchinson said of communities affected by the opioid epidemic. “I want to make sure we don’t lose that nexus.”
Senator Heather Steans, a Democrat and the bill’s chief sponsor, explained that the bill’s Restoring Our Communities grant program, which would receive 25% of tax revenue derived from legal cannabis sales, would allow for local communities that qualify to apply for grants for programs including violence prevention, employment help, and those that allow disadvantaged business owners to take part in the new cannabis industry. “It’s most clear at the community level to address what they need to move forward,” Steans said.
Republican Senator Dale Righter seized on testimony from a school guidance counselor who said that students felt that cannabis is OK to use because it would soon be legal in Illinois.
“Sometimes we forget that kids still look at adults to set examples,” Righter said. “When we say it’s OK, at least some kids are going to take some indication from that.”
Others argued that public awareness—like those contemplated in the bill around pregnant women who smoke or use alcohol—have been effective in convincing the public that legal doesn’t mean harmless.
A tally of witnesses for and against submitted by potential witnesses, which is often looked to in Illinois as one indicator of a bill’s support, showed that 1,172 opposed the bill versus 556 in support as of late Wednesday.
The group Smart Approaches to Marijuana has been organizing extensively in Illinois, and group president Kevin Sabet encouraged the group to “keep it up.”
It isn’t clear when the bill will come back to the committee for a vote. Proponents are hoping to pass the measure before Illinois’ session ends at the end of the month.
Illinois Adult-Use Update
Illinois Cannabis Legislation
Illinois Cannabis Legislation – titled Illinois Cannabis Regulation and Tax Act introduced, and in classic Illinois fashion
Governor Pritzker is already crowing about the bill making Illinois a leader, even though nine states have already legalized adult use
Asshole Sen. Mike Madigan is already threatening that it will “be difficult to get the votes” – translated he wants more $$ for his slush funds
It is reassuring to note that the Senate Bill is 532 pages long while the enabling legislation in California SB 94 was only around 220 pages.
The provisions of the bill are nothing to be overly pleased with:
Possession limits for residents of one ounce and half of that for non-residents.
The bill gives those applicants access to funding from a newly-created $20 million low-interest state loan program, according to Pritzker’s release, and allows for reduced licensing fees in certain circumstances.
“There are some very controversial aspects to the proposal. No. 1 would be the proposal for the expungement of criminal records,” Madigan said. “The key on that issue is how far do you go in terms of expungement? If we’re talking about some teenager who was doing drugs and found guilty of possession, that’s one thing. If you’re talking about people who were actually in the business, dealers, and you want to expunge those records, that’s a different case.”
Convictions for possessing, growing, manufacturing and delivering cannabis were all included as eligible for expungement in a document released by Pritzker’s office, which said the expungement provision would only apply to standalone offenses not accompanied with other convictions. Madigan said he wasn’t speaking to the bill’s specific expungement language, but to the idea in general. “I’m not sure how they treat that in the proposed language, but that will be very important in terms of finding 60 people in the House to vote for the bill,” he said.
The General Assembly has just 21 days of legislative debate on the calendar to pass the critical piece of Pritzker’s first-term agenda before legislators adjourn. The governor budgeted for $170 million in new revenues next fiscal year from licensing fees associated with legalization. The first of those fees would come from the state’s existing 17 cultivation and 55 dispensary facilities.
Currently-licensed cultivators would be eligible to purchase a recreational license for $100,000 and up to $500,000 paid to the Cannabis Business Development Fund, which would help fund the low-interest loans and other equity-promoting measures.
Retailers, on the other hand, would be allowed to purchase up to two licenses, each costing $30,000, with up to $100,000 paid to the CBD fund for the first license and up to $200,000 for the second.
The bill’s sweeping criminal and social justice considerations include plans to use an automated system to expunge roughly 800,000 marijuana convictions and allow those with pot convictions to work in the legal cannabis industry. The measure would also create a designation for “social equity applicants” hoping to obtain licenses and provide minority-owned businesses support by offering technical assistance, access to capital and loans and relief from fees that have posed a barrier to entry for those looking to crack into the state’s pot industry — which is currently dominated by a handful of predominantly-white medical marijuana companies.
The measure is sponsored by state Rep. Kelly Cassidy and state Sen. Heather Steans, Chicago Democrats who previously introduced similar legislation in 2017 that failed to gain traction under former Gov. Bruce Rauner. During the news conference, Steans said she and her colleagues are also pushing for “revenue that, instead of going to the illicit market, comes and benefits the people in Illinois.”
Under the bill, 25% of that revenue would go to areas that have been disproportionately affected by the war on drugs and another 20% would fund programs focused on treating mental health and substance abuse issues. Pot products with less than 35% of THC – the chemical compound that gets users high – would be taxed at 10%, while products with more THC would be taxed at 25%. Cannabis-infused products would carry a 20% tax.
Despite polls showing support from a majority of Illinois voters, pro-legalization lawmakers are opposed by legislators and special interest groups who have highlighted the perceived dangers of a legal weed market. The current bill would allow Illinoisans to grow up to five plants in a secure place inside their homes, something that has faced stiff resistance from opponents who fear that pot could wind up on the black market.
To sum up, the Illinois approach to adult-use cannabis is all about TAX REVENUE and GRAFT.
If you really want to, you read the complete text of the bill here.