This past Saturday, Illinois Governor J.B. Pritzker released the plan for full cannabis legalization which is set to begin on January 1, 2020. Companies that currently had medical cannabis licenses would get a jump on other companies with regards to applying for licenses.
According to the plan, new licenses for dispensaries would begin on May 1 and processors, craft growers and transporters would begin licensing on July 1. It wouldn’t be until late 2021, that the next round of businesses would receive licenses.
The proposed law for adult-use cannabis would legalize possession of up to 30 grams for residents over the age of 21. Non-residents are only approved for about half that amount. Municipalities could ban retail stores within their boundaries within the first year of the program.
Expungement is a key part of the new legislation as those with misdemeanor or Class 4 felony cannabis convictions would see their records wiped clean. It is expected that at least 800,000 people will benefit from this move. In addition to that, a $20 million low-interest loan program will be established to encourage diversity in cannabis business ownership.
"DCEO will administer a low-interest loan program to qualified “social equity applicants” to help defray the start-up costs associated with entering the licensed cannabis industry."
Under the proposed rules, no new large-scale commercial growers would be permitted at this time. The focus would be on small “craft” growers, with an emphasis on creating diversity. Residents will be allowed to grow up to five plants as long as the plants are out of public view.
“We have to ensure it’s not a small group of people getting very rich,” said Rep. Kelly Cassidy, D-Chicago, one of the measure’s sponsors. “We want to make a lot of new business leaders in the state through this process.”
The fees are as follows:
Cultivation organizations: • Non-refundable permit fee: $100,000 • Cannabis business development fund fee: 5% of total sales between July 1, 2018 to July 1, 2019 or $500,000, whichever is less. § Dispensing organizations: • License 1 o Non-refundable permit fee: $30,000 o Cannabis business development fund fee: 3% of total sales between July 1, 2018 to July 1, 2019 or $100,000, whichever is less. • License 2 o Non-refundable permit fee: 30,000 o Cannabis business development fund fee: $200,000
Licensing costs for new entrants to the market § Craft growers • Non-refundable application fee $5,000 • License fee $40,000 § Processors • Non-refundable application fee $5,000 • License fee $40,000 § Transporting organizations • Non-refundable application fee $5,000 • License fee $10,000 § Dispensing organizations • Non-refundable application fee $5,000 • License fee $30,000
The taxes are as follows:
Cannabis purchaser excise tax: o 10% of the purchase price – Cannabis with a THC level at or below 35% o 20% of the purchase price – All cannabis infused products o 25% of the purchase price – Cannabis with a THC level above 35% o These taxes shall be in addition to all other occupation, privilege, or excise taxes impose by the State of Illinois or by any municipal corporation or political subdivision. • Municipal purchaser excise tax: o Municipalities may enact a purchaser excise tax up to 3% in increments of 0.25% o Counties may enact a purchaser excise tax up to 0.5% in incorporated areas in increments of 0.25% o Unincorporated areas may adopt a purchaser excise tax up to 3.5% in increments of 0.25%
Revenue would go toward paying for program costs and, after that, would fund the Restoring Our Communities grant program, substance abuse services, law enforcement grants, and the general state fund.
Green Market Summit
The Green Market Report is hosting its first Chicago Green Market Summit on May 7. Located in downtown Chicago, the event is focused on the emerging market in Illinois and features many local businesses.