Starting the first of next year, adults 21 and older would be able to purchase cannabis for recreational use and pay at least a 10 percent tax under legislation lawmakers are now poised to consider.
After working on legislation for over two years, state Sen. Heather Steans, D-Chicago, and state Rep. Kelly Cassidy, D-Chicago, joined Gov. J.B. Pritzker in Chicago to announce the amendment to Senate Bill 7. The governor’s budget for the fiscal year that starts July 1 includes $170 million in licensing fees from legal marijuana, but not any sales tax revenue.
“Years of work by stakeholders across Illinois means that today we are putting forward a framework for the General Assembly to move forward this session to legalize adult use cannabis, and we welcome additional feedback and insight during this debate,” Pritzker, who campaigned on legalizing cannabis, said in a statement.
“This bill stems from an inclusive process that entailed community meetings, town halls, and legislative working groups,” Steans said. “In spite of having a wide variety of views, most of us wanted the same basic things – social justice, safety for our kids, and revenue for our state. I think we’ve done a good job of balancing these three goals.”
A summary released by Pritzker’s office Saturday outlines the various provisions, including sales to start Jan. 1, 2020. It also summarized how much adults can possess and in what forms, the various tax rates, provisions letting local governments prohibit the sale in their jurisdiction, and controlling zoning provisions in relation to production and distribution, expungement of certain previous cannabis criminal offenses, and measures to “ensure the most equitable marketplace in the country.”
Adults would be allowed to possess 30 grams of cannabis flower, 5 grams of cannabis concentrate, and 500 milligrams of THC-infused products.
The tax rates would vary depending on the product. Buyers would pay 10 percent of the purchase price for cannabis with THC levels below 35 percent. All cannabis infused products would have a 20 percent tax. Cannabis products with 35 percent or higher levels of THC would pay 25 percent tax. All funds would go into the Cannabis Regulation Fund.
Before such tax rates were revealed, estimates on how much the state could bring in ranged from $350 million to $700 million a year.
Under the proposed framework released Saturday, more than a third of the revenue would go into the General Revenue Fund, a quarter would go to the Restoring Our Communities Fund for community reinvestment. A fifth, 20 percent, of the revenue would go to support mental health and substance abuse services at local health departments. Ten percent of the revenue would to the Budget Stabilization Fund to pay down backlogged bills. There would also be 8 percent for the Law Enforcement Training and Standards Board and two percent for the Drug Treatment Fund for public education and awareness.
The proposed measure also would allow adults to possess more than 30 grams of cannabis if it is grown and secured in their residence under certain conditions, the summary said.
One sticking point has been the home grow aspect. Various law enforcement groups have opposed the idea saying it would be difficult to police. The summary says Illinois households can grow up to five cannabis plants if the adult 21 and older owns the house, have it kept separately locked away from minors, and it can’t be grown in public view.
Before Saturday, some groups like the NAACP opposed the idea of legalization, worrying about social costs to certain communities but also critical of the possibility that minority entrepreneurs, or people with previous cannabis convictions, would be left out of getting involved in the legal marketplace.
The summary released by the governor says it creates a $20 million low-interest loan program for “social equity applicants” which would be applicants that have certain qualifications, including having “resided for at least 5 of the preceding 10 years in a disproportionately impacted area,” applicants who may have ownership and control by “one or more individuals who have been arrested for, convicted of, or adjudged to be a ward of the juvenile court for any offense that is eligible for expungement under this act.” There are various other qualification for the loan program spelled in the proposed law.
“For too many years, criminalization of marijuana possession has damaged lives and communities across Illinois. It is time for rational policy,” said Khadine Bennett, Advocacy and Intergovernmental Affairs Director of the American Civil Liberties Union of Illinois. “Today’s announcement is another step toward securing passage of marijuana regulation legislation in Illinois that is centered on fairness and equity.”
The summary says there would be two waves with the first in May 2020 with the state awarding 75 new dispensing organizations. For the the new licensees being proposed, there would be 40 for producers and up to 40 licenses for craft growers, and licenses for transportation organizations, all in the first wave.
The second wave would be December 2021, when 110 new dispensary licenses would be awarded. There would also be 60 additional licenses awarded for craft growers.
Licenses for craft growers would be $40,000 with a non-refundable application fee of $5,000. Producer licenses would cost the same. Transportation organizations would pay $10,000 per license with a non-refundable $5,000 application fee. Dispensing organizations would have the same non-refundable application fee with $30,000 licenses.
"There are lots of things I like with this bill but there are other things that I am not as fond of, however that is usually the sign of a good bill that addresses all the stakeholders' issues," said National Organization to Reform Marijuana Laws Illinois Chapter’s Dan Linn. "My biggest concern is that there will be supply issues, specifically with the very limited number of cultivation center and craft grow licenses that would be able to have an adequate amount of product available for market when the first legal sales start."
Others were more critical. Smart Approaches to Marijuana President and founder Kevin Sabet said in a statement there are far-reaching consequence to the proposed measure that “will have devastating impacts on citizens, communities and youth.”
“Numerous studies and data from other states have shown that this is not a good move for Illinois,” Sabet said. “It won’t bring in the revenue promised, while ushering in new, costly regulatory burdens, more hospitalizations, increased drugged-driving incidents and unregulated, highly potent pot products.”
The measure could come up for consideration in the Senate as early as next week, when lawmakers return to the capitol. The end of session is May 31. The next budget is set to begin July 1. There are no changes to the state’s medical cannabis pilot program in the bill.