Illinois Cannabis legislation falls apart at the last minute – again
Two bills that passed the state Senate late last week never made it to a vote in the House of Representatives.
Somewhere on the long road to the finish line in Illinois, an effort to rein in hemp products and another to keep struggling new cannabis companies afloat both sputtered.
Two bills that passed the state Senate late last week never made it to a vote in the House of Representatives during the all-nighter that dragged into this morning and ended this year’s regular legislative session. It’s the second year in a row cannabis legislation has fallen apart at the end of the spring session. The result provides another sign there are still a lot of growing pains for a young industry that does more than $1.5 billion in annual sales.
Companies that produce and sell hemp-related products avoided new regulations, including those that the industry says would have put some players of out business.
But changes in the law that would have helped newcomers who have won licenses to grow and sell recreational marijuana also failed.
So-called social equity applicants who won conditional retail licenses two years ago would have received a six-month extension to find locations for dispensaries, as well as the ability to raise money from outsiders to get those stores open. Craft growers would have gotten the immediate ability to open up 14,000 square feet of cultivation space. Transporters would have gotten more flexibility to ship cannabis between dispensaries and manufacturers. Retailers would have gotten the OK for drive-thru and curbside sales.
“It was highly negotiated. We believed we had industry consensus,” says Scott Redman, president of the Illinois Independent Craft Growers Association. “I don’t know what happened.”
It’s clear the Senate bill to regulate hemp – a cousin of the cannabis plant associated with marijuana — touched off a flurry of lobbying from both sides that picked up over the weekend.
The cannabis industry pushed to tightly restrict hemp products, some of which also are known as Delta 8 or Delta 9, that are untested or regulated and sold at convenience stores or CBD shops. Under the Senate bill anything over the federal limit of 0.03% THC – the chemical associated with the “high” of marijuana — would have only been allowed to be sold by licensed cannabis dispensaries.
“We ran out of time to get a full understanding of what the two bills were about,” said state Rep. LaShawn Ford, D-Chicago, a sponsor of the cannabis bill who opposed the hemp-regulation bill, which he characterized as a ban. “People were confused about how much regulation we would have and who would regulate it.”
There was as little agreement on the outcome as the process.
“We are disappointed the House failed to pass needed reforms to our state’s cannabis laws and will continue to allow synthetic hemp products that are sickening children and adults to be sold with no oversight,” Tiffany Chappell Ingram, head of the Cannabis Business Association of Illinois, which represents cannabis growers and retailers, said in a statement.
Rachel Berry, a hemp farmer in central Illinois and president of Illinois Hemp Growers Association, characterized the Senate bill as a “vicious” attack on hemp. “We spent the day in Springfield with about 30 people to try to stop this from passing in the House,” she said. “Many legislators were unaware of what was going on with hemp.”
The battle isn’t over.
“Everything has its time,” Gov. J.B. Pritzker, who led the effort to legalize recreational marijuana during his first term, told reporters today in wrap-up of the legislative session.
“I hope that there’s some movement and thought about what this might look like in the new veto session,” he added.
Pritzker stopped short of laying out a road map but provided clear hints for a starting point. “I think (hemp) should be regulated. I believe that an unregulated product like this, which clearly has caused some health problems, ought to be regulated by the state.
“It’s clear that it is not for medicinal purposes. It’s not regulated the way that cannabis is, and yet it ends up on the market and . . . there’s no restriction on who gets it, how much they can get, etc. So I really believe we need to step back and ask: What is in the best interest of the health of kids and adults across the state? And I think regulating it is proper.”
Among the challenges is deciding the number of licenses, tax rates and testing requirements for hemp – which emerged from federal farm legislation – and balancing them against the health of the recreational cannabis industry created by the state that produced a half-billion dollars in tax revenue last year.
“There needs to be more time and conversations about the issue for everyone involved,” says Glenn McElfresh, co-founder of Plift, which sells hemp-infused beverages, and board member of the Hemp Beverage Alliance. “Everyone agrees there are some bad actors we need to get out of the space, but there are good actors who would have been harmed by the proposed legislation.”
In the meantime, social equity applicants who were hoping for more time and more options to raise capital to get stores and grow facilities open confront difficult choices. Retail license winners face deadlines starting in July to show they have lined up locations or risk losing them to the next applicant selected in the lotteries two years ago.
“It’s a very precarious situation,” says Edie Moore, a co-owner of Sway Dispensary at 3340 N. Halsted St., who is a partner in several other retail licenses that have not yet opened.
Growers also risk running out of cash before they can find capital to build out their operations.
“We haven’t seen too many people fail yet,” Redman says. “I fear there’s going to be a shakeout in ranks of license holders trying to make a go of it.”
