Two Things that Stand out About Illinois’ Landmark New Legislation Legalizing Cannabis

Jesse HudsonOperations, Startup Tips & Resources

illinois-legalizing-cannabis

On Friday, May 31st the Illinois House approved a law legalizing recreational cannabis, or marijuana, in the state, making Illinois the 11th of the United States to do so. The law, referred to as the Cannabis Regulation and Tax Act (“CRTA” or the “Illinois law”) is on the desk of Illinois Governor J.B. Pritzker, who has championed legalization, to sign and then will go into effect January 1st, 2020. Two things make the Illinois law stand out from the rest of the nation’s cannabis legalization legislation.

First, the Illinois law contains provisions focused on cannabis businesses owned by social equity applicants. Such applicants have been arrested or convicted of a minor cannabis offence or are related to someone who was. They may live in or have ties to communities with high rates of poverty, disproportionately affected by law enforcement activities during the drug war against cannabis that the Illinois law sunsets. The law gives social equity applicants discounts on application fees and other fees and enables them to access state-sponsored startup capital through low-interest business loans from the Cannabis Business Development Fund, currently stocked with $30 million. Social equity applicants get a significant points advantage over all other applicants for cannabis business licenses, the first crop of which will open in October of 2019. Business licenses for 75 additional dispensaries, 40 new craft growers, and 40 processers making extracts and other products are up for grabs.

Second, the Illinois law came not from direct democracy in the form of ballot initiatives like those in Michigan and Colorado, but from within the state legislature. Illinois elected officials engaged with the national dialogue on the reform of cannabis laws, tuning in and taking decisive action.

Illinois’ progress with cannabis legalization legislation comes at an opportune time. On May 28, the USDA issued a legal opinion interpreting the 2018 Farm Bill, which legalized hemp (defined as cannabis containing less than 0.3% THC) production nationwide, and the 1971 Controlled Substances Act (“CSA”), which made cannabis illegal nationwide, putting it in Schedule I. The USDA’s opinion clarified that hemp and hemp extracts are removed from Schedule I of the CSA and should be part of the free flow of interstate commerce, thereby resolving pending public questions about interstate shipping of hemp and hemp oils such as CBD in the industry’s favor.

With this spate of new laws, the cannabis industry has a legal framework in which it will continue to bloom and blossom. Ziliak Law is best positioned to bring your cannabis business to life, keeping it up to speed with the new law and helping prepare it for its next rounds of financing.

Email info@ziliak.com to be among the first to receive Ziliak Law’s full guide to Illinois’ new cannabis law and stay tuned for more updates here on our blog.