Pritzker’s pot revenue depends on unfiled legalization legislation

Pritzker’s pot revenue depends on unfiled legalization legislation

Senate sponsor hopes to introduce bill ‘in the next month or so,’ with aim for passage by May 31


Capitol News Illinois

SPRINGFIELD – Gov. J.B. Pritzker’s proposed budget for the 2020 fiscal year includes $170 million in new revenue from licensing fees for legalized recreational marijuana, but the details of such legislation are not yet finalized.

State Sen. Heather Steans and state Rep. Kelly Cassidy, both Chicago Democrats who have been working on marijuana legislation for two years, said they wouldn’t rush the process on behalf of revenue.

“Assuming that we want to have some revenue, I think we’d like to pass it by the end of May,” Steans said. “But I think both Representative Cassidy and I have been very clear that the revenue is not what is motivating or should drive this legislation, but obviously it's a side benefit piece that can also come.”

Cassidy and Steans both said they are waiting for information from a demand study before moving legislation forward. They also want to ensure minority inclusion for vendors and social justice for persons incarcerated for cannabis crimes which no longer would be illegal under the bill.

“We're still trying to find the best path forward for equity and inclusion, still looking at what's worked and not worked in other states and trying to put together a combination of solutions on that front,” Cassidy said. "We want to do this not by guess but by fact. That is why we've commissioned the study. We expect the results very, very shortly and that will inform how we grow the program.”

Steans said she would hope to have language filed for a Senate bill “in the next month or so,” and both said they would like to see it passed by May 31, provided they can iron out the final details. Neither would speak to the governor’s $170 million revenue projection for the fiscal year.

“I haven't gotten the details behind (the governor’s $170 million projection). So I really can't comment on that yet,” Steans said. “It seems like a reasonable approach. All the revenue estimates we've had so far, when you have a fully mature program in place, have been around $500 million. So this is clearly well below that and based much more on up-front licensing fees, not from receipts based on sales tax.”

The licensing fee structures for recreational marijuana are not yet clear. But for medicinal marijuana cultivation centers, a permit costs $200,000 up front with a $100,000 annual renewal fee and a $25,000 nonrefundable application fee, according to the Department of Agriculture.

Illinois allows 22 cultivation center licenses – one in each state police district. Steans said the legislation could add other licensing for smaller craft cultivators, and for the processing and transportation of cannabis products.

She said she would like the location and placement of craft cultivators to be up to local zoning boards and municipalities, rather than being subject to the same strict regulations as existing medicinal cultivation centers.

“Right now the cultivation centers really are all pretty rural and have very big footprints,” she said. “Craft growers could maybe be located in a manufacturing district if a local municipality wants it there.”

While the Department of Agriculture regulates cultivation centers, the Department of Financial and Professional Regulation is in charge of the state’s 60 dispensary licenses, five of which are unused, and fees are much lower. Dispensary licenses cost $30,000 initially with a $25,000 annual renewal fee and a $5,000 nonrefundable application fee.

Cassidy said she expects the state to need “more dispensaries very quickly” to meet recreational demand, but exact figures will not be available until the demand study is released.

Both senators also emphasized bipartisan support for the legislation, and newly-seated Democratic Attorney General Kwame Raoul has voiced his conditional support for legalization.

“I’m a proponent generally, but the devil is in the details,” Raoul said. “I’m particularly concerned about anything that’s done to target cannabis and legalization to children through flavoring or production of candies or products aimed toward kids.”

Cassidy said gummies and flavored products are already on the medicinal market, but there are regulations on packaging, dosage, shapes and coloring of such items.

She also said Illinois’ medicinal program is one of the best tracked and regulated in the country, and black market leakage of Illinois cannabis to other states is minimal to non-existent. There are slightly less than 30,000 active medical marijuana cardholders, she said.

“We have one of the smallest covered conditions lists in country, so it really limits who can get access,” she said, adding that separate legislation from Rep. Bob Morgan (D-Deerfield) could increase the reach of the medicinal conditions list as the pilot program sunsets.

Steans said her pending legislation could also mandate more transparency for marijuana facilities.

“We can’t even use (the Freedom of Information Act) to find out who actually owns the cultivations or dispensaries, so we want to fix that,” she said.

With all the moving parts, Cassidy said the earliest possible implementation would be Jan. 1, 2020, but that could be pushing it.

“That's a goal, but that involves everything going right,” she said.



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