Following the Governor’s signature on June 25, 2019, Illinois is now the second Midwestern state to legalize adult use cannabis. The new law allows adults 21+ to possess up to 30 grams of cannabis, 500 mgs of THC-infused edibles, and 5 grams of cannabis concentrates, cumulatively, with out-of-state residents limited to half of those amounts.
The new law provides for 5 types of licenses: dispensary, producer, transporter, cultivator, and craft grower (small-scale cultivation operations that may operate an on-site dispensary). Dispensary and cultivation operators licensed under the current medical cannabis program can get early approval for adult use licenses to begin supplying the recreational market on January 1, 2020. Additionally, Illinois must issue 75 dispensary licenses by May 1, 2020 (application available by October 1, 2019; submissions accepted by January 1, 2020). After January 1, 2020, the Department is authorized to issue up to 500 licenses on a staggered basis through 2022. No person or entity will be allowed to own, or substantially control, more than 10 dispensary licenses, 3 cultivation center licenses, or 3 craft grower licenses.
One of the primary goals of this law is reinvesting in the communities that have been most heavily impacted by the drug war. Applicants who meet the requirements of a “Social Equity Applicant” (SEA) will have a significantly more competitive application than those who do not, as a SEA is awarded an additional 20% of the total available points in the application scoring system. SEAs may also be entitled to a 50% reduction in the licensing application fees and will have access to low interest loans from the state.
Local governments can exercise significant control over zoning, with the ability to prohibit or significantly limit the location of cannabis businesses through an ordinance. Further, local governments may impose limits on “time, place, manner, and number” of cannabis business by requiring conditional or special use permits. They will also have significant authority over on-premise consumption, by licensing dispensaries to permit smoking lounges as accessories to the business.
Finally, the new law sets tax rates on cannabis based on the concentration of THC in the product (10% flower, 20% edibles, 25% for THC concentrations >35%), in addition to the 6.25% state sales tax, as well as local/county taxes.
The lawyers at McAllister Garfield are available to discuss this development with you. Our Firm has extensive experience with national merit-based cannabis application work. We also have helped numerous clients expand to new states like Illinois with intellectual property licensing agreements. Contact us today to find out more about how we can help you in Illinois.