The equity program built into the law means that Illinois has the potential to create one of the most progressive cannabis industries in the country.
This morning, surrounded by lawmakers and activists in a community center on the west side of Chicago, Gov. J.B. Pritzker signed into law a bill that makes Illinois the 11th state in America to legalize adult-use cannabis.
The Cannabis Regulation and Tax Act will go into effect on Jan. 1, 2020 and will allow for the licensed growth, sales, possession and consumption of cannabis for people over 21 years of age. So, on New Year’s Eve this year, Illinois residents can plan to join in the sort of stoney legalization celebrations that 10 other states have seen so far — though it might be too cold in Chicago to copy Portland’s midnight free weed and seed party on a bridge that took place on “legalization eve” on July 2015.
Lawmakers say that the state’s 55 medical marijuana dispensaries already in operation can apply to serve as recreational dispensaries and can open a second location, which means they’re expecting over 100 adult-use storefronts to be open come Jan. 1, 2020.
Illinois is only the second state to legalize the consumption of adult-use cannabis through the legislature and not through a voter referendum. Vermont was the first to legalize cannabis through the legislature in January 2018, but it did not set up a legal system for cannabis sales, thereby granting Illinois the distinction of being the first state to construct a legal cannabis market through the legislature.
“Illinoisans have had enough,” Pritzer said at the bill signing ceremony, according to the Chicago Tribune. “The time for change has long since passed… This legislation brings an important and overdue change to our state, and it’s the right thing to do.”
The fact that Pritzker signed the bill did not come as a surprise. Pritzker ran for governor in 2018 on a platform that included support for cannabis legalization, and helped support the bill on its path this year through both houses of the Illinois state legislature.
Like most other states with legal adult-use cannabis, Illinois has set limits on how much cannabis a state resident can possess: 30 grams of cannabis flower (about one pound), 500 mg of THC in infused form (such as with edibles and tinctures) and 5 grams of cannabis concentrates. For visitors from out of state, the limits are halved.
Illinois law also follows the general model that other states have set out for the cannabis marketplace: high taxes, strict licensing rules and revenue directed to educational and rehabilitative programs.
However, there are a few key places where Illinois’ new cannabis law differs from what other states have done so far.
Illinois’ Equity Approach
First and foremost, Illinois has built equity into the state’s legal cannabis law from the ground up. The two other states that have cannabis equity programs, California and Massachusetts, started working to build those programs after pressure from activists following legalization.
Like the rest of the country, Illinois has a problem with racist policing, spurred by the War on Drugs. A 2013 report from the American Civil Liberties Union analyzed data from cannabis arrests nationwide and found that Illinois had the fifth highest per capita arrests for marijuana in the country, with the fourth largest disparities between black and white arrest numbers. Black people in Illinois were 7.56 times more likely to be arrested for having pot.
So the state is working to do what it can to amend for those past sins. Under the Cannabis Regulation and Tax Act, arrests for cannabis possession under 30 grams will be automatically expunged, and people may go to court to get cases expunged involving up to 500 grams of cannabis. (Pritzker has also promised that he will pardon people with convictions for possessing up to 30 grams of cannabis.)
In terms of making sure the cannabis industry isn’t disproportionally dominated by white businessmen, the state is setting up a “social equity” applicant system. These “social equity applicants” are defined as living for at least five of the past 10 years in a neighborhood that was disproportionally policed for drugs or who have been arrested and convicted of a cannabis crime that is now qualified to be expunged.
The state plans to set up a “Cannabis Business Development Fund” to help these social equity applicants, using an initial infusion of $12 million dollars of the revenue the state has generated from its medical cannabis program. The fund will provide low-interest loans and grants to the social equity applicants, will waive the fees for equity applicants, will help with job training and expungement proceedings and will research the barriers that people are facing in entering the cannabis industry.
According to the Tribune, Pritzker said that “25% of the revenue garnered from marijuana taxes will go to marijuana businesses in black and brown communities that were disproportionately affected by the War on Drugs.”
Taxing Based on THC Percentage
Another unique approach Illinois is taking to legal cannabis is to tax cannabis products based upon their THC percentage.
According to the law, cannabis products with less than 35% THC will be taxed at 10% of the purchase price, while products with more than 35% THC will be taxed at a rate of 25%. Cannabis-infused products (defined as a beverage, food, oil, ointment or topical that “is not intended to be smoked”) will be taxed at 20%.
In short, this seems like a sure way to inhibit the consumption of cannabis concentrates, which have often made lawmakers wary, given their strong potency and the increased manufacturing hazards of their production.
Canada has also taken this THC-tax approach in regards to edibles, extracts and topicals, which are subject to an excise tax of one cent per milligram of total THC.
Home Grow Only for Medical Card Holders
Before it passed the legislature, the Illinois adult-use cannabis bill contained a provision that allowed adults to grow five plants each at home. However, the Tribune reports, law enforcement groups lobbied against the provision and struck the homegrow stipulation from the law.
Those patients who are approved through the state’s medical marijuana program will still be allowed to grow five cannabis plants at home.
Given the fact that homegrow will not be allowed, more pressure will be placed on the state’s dispensaries and storefronts to provide citizens with the cannabis they are seeking.
State Sen. Heather Steans, the Chicago Democrat who co-sponsored the bill, told the Tribune that the biggest challenge she thinks the state will face in the next few months is making sure there’s enough product on the shelves and not a cannabis shortage.
“The biggest challenge will be, what will the (customer) lines be like?” Steans said. “In other states we’ve seen long lines and not enough product.”