Illinois Cannabis Legislation Fizzles at Finish Line

This story was republished with permission from Crain’s Chicago and written by John Pletz.

Hopes for wide-ranging legislation that would fix a bunch of nagging issues in the Illinois marijuana industry fizzled at the last minute.

Instead, the state General Assembly made just a few changes.

• Social-equity applicants who won licenses for new retail shops got another year to find locations for their stores. They were at risk of losing those licenses starting in July if they hadn’t come up with locations.
• The state also will have another $40 million to lend to new license holders to help them get started in a business where capital has dried up quickly.
• Marijuana companies will be able to deduct typical business expenses from their state income taxes, something they can’t do on federal taxes because cannabis is illegal under federal law. Tax issues are a huge burden for an industry that’s struggling to become profitable.

But some other big changes that were expected as part of a broader bill that had been under discussion for months went up in smoke at the very end of the session.

Among them:

• A provision that would have helped craft marijuana growers to start with 14,000 feet of grow space, rather than 5,000 square feet.
• Drive-through and curbside service at dispensaries.
• The ability for retail license winners to raise money from investors, albeit with restrictions, to get their stores off the ground.

“We got some of what we wanted,” said Rep. La Shawn Ford, D-Chicago, who led the group that worked for months on the legislation. “Unfortunately, we didn’t allow social equity (license winners) to bring in the investors that they need.”

Ford said a last-minute proposal to ban delta-8 THC, a hemp-based product similar to marijuana that’s often sold at CBD retailers but isn’t regulated, “blew up the passage of the omnibus bill.”

He opposed the ban, which would have been associated with legislation whose underlying goal has been decriminalizing cannabis.

The Cannabis Business Association of Illinois, a trade group that represents companies in the marijuana industry, said it “was just as surprised as anyone that the cannabis omnibus bill was not called for a vote. It was very disappointing to get that close.”

Expect both sides to be back again in the fall veto session.