MOORE’S SUMMARY: Lawmakers are making a late play to pass an omnibus cannabis bill that’s eluded them for the past few years. It would create a new regulatory structure for low-THC, hemp-derived products. Mirroring an upcoming change in federal law, it would also narrow the definition of legal hemp and effectively move intoxicating products from general retail and to the state-regulated cannabis market.
WHY IT MATTERS: When federal lawmakers legalized hemp in 2018, hemp-derived intoxicants popped up in corner stores, gas stations and other places. Despite having similar intoxicating effects, these products have fallen outside the state’s cannabis regulatory structure. But efforts to change that have stalled in recent years amid equity concerns. Many hemp operators are people of color and from marginalized backgrounds who were unable to participate in the legal cannabis market due to high barriers to entry.
But federal lawmakers this year closed the loophole and intoxicating hemp products will be banned starting in November. As a result, there seems to be motivation to address the issue along with lingering social equity concerns in the legal cannabis industry, which is dominated by large, multi-state operators.
WHAT IT DOES: Here’s 10 things to know about the 556-page bill:
- It creates an on-ramp to legal status for hemp operators. Those that register with the state would be able to sell any product that’s considered hemp under the new federal guidelines if it complies with testing and labeling requirements. Only topical and consumable products would be allowed while smokable and inhalable products would be prohibited.
- Intoxicating hemp products would be removed from gas stations, smoke shops and general retail stores and only permitted for sale in licensed cannabis dispensaries.
- Cannabis social equity operators would be allowed to hire their own security staff rather than contract with a third party — a requirement that’s viewed as one of the largest regulatory costs on licensees.
- Canopy space allowed for craft growers would increase from 5,000 square feet to 14,000 square feet.
- Drive-through dispensing would be permitted and dispensaries would be allowed to stay open until 2 a.m. versus the current 10 p.m.
- Cannabis possession limits would double (from 30 grams to 60 grams for flower; 500 milligrams to 1,000 milligrams for infused products; and 5 grams to 10 grams for cannabis concentrate).
- Adult-use dispensaries would be able to apply for a medical marijuana license, which would give medical customers more places to purchase their products at a far lower tax rate.
- Home rule communities would be prohibited from making their own cannabis tax structures on a per-weight basis
- Dispensaries would have an additional six months to become operational. They currently have just under two years.
- The definition of “principal officer” would change from 1% to 10% in privately-held businesses. The idea is to help social equity operators attract minority investors who, under the current system, are subject to strenuous compliance burdens.
STATE OF PLAY: Identical bills have been introduced in the House and Senate, though neither has been assigned to a substantive committee. It’s unclear if they will move before lawmakers adjourn May 31.
But lawmakers expressed confidence that longtime divisions between the hemp and cannabis industries and, more recently, divides between the House and Senate won’t scuttle this effort.
“Rumors of the demise of House-Senate collaboration have been greatly exaggerated,” said Rep. Will Guzzardi, D-Chicago, in a statement. “I’m proud of the partnership that’s gone into drafting this bill, and I’m proud of the end product — legislation that will help keep our cannabis industry among the most vibrant and diverse in the nation.”
In short, stay tuned.
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