Illinois Holds Public Hearing Today on Cannabis Legalization Equity Act

The Illinois House will hold a public hearing today on HB 0902 the Cannabis Legalization Equity Act. The bill is socially progressive as it provides high cannabis possession limits, requires 51% of the cultivation and retail store licenses to be granted to communities that have been disproportionately impacted by the drug trade, and requires the state to automatically expunge prior cannabis convictions. The devil will be in the details as to how the state regulators will implement these concepts so as to create the intended equitable results.

Below are seven (7) things that cannabis businesses should know about Illinois’ cannabis legalization equity bill.

  • The bill requires the state authorities to automatically expunge cannabis convictions from the records within six (6) months of the law’s effective date.

  • The bill allows the personal possession, growth an transport of 24 mature plants. This limit is four times the 6 plant limit allowed in most states, and more than the two pound limit in New York’s recreational marijuana legalization bill.

  • The Department of Agriculture and the Department of Financial and Professional Regulation must adopt implementing rules within six (6) months of the law’s effective date, and begin accepting and processing applications within a year. This time frame seems quite aggressive, and probably unrealistic.

  • The Department of Agriculture and the Department of Financial and Professional Regulation must issue 51% of the cultivation and retail store licenses to persons in neighborhoods that have been negatively impacted by the war on drugs. These Departments are also prohibited from denying licenses for persons who are located in these areas. We question whether the licenses should be awarded to persons who were negatively impacted by prior cannabis policies rather than placing 51% of the cultivation and retail licenses in these neighborhoods.

  • A 10% excise tax will be added to the sales price on the sale or transfer of cannabis. The excise tax proceeds will be distributed to the General Fund, Illinois’ retirement systems, and to train state police on drug recognition.

  • A 10% local tax is charged on the net income of cultivation facilities, retail stores and on-site consumption facilities. Other states are sharing percentages of the excise tax charged on the gross sales with local municipalities. The proposed local tax on net income is not as generous.

  • Local municipalities may opt-in and permit marijuana establishments. The bill prescribes a robust approval process for municipalities including timelines for decision making. There are no caps on the application and license renewal fees charged by the municipalities.