Plans to create 150 new marijuana stores, allow cannabis tours and make it a crime to get a pet high are among proposals Illinois lawmakers are expected to consider this spring.
The proposed legislation comes as the state’s marijuana industry has undergone explosive growth, clearing $1 billion in sales in its first year, while minority and other new investors have gotten shut out of the process.
Even after proposed changes to promote minority ownership, sponsors say the industry will remain fundamentally slanted in favor of existing wealthy white owners, despite stated intentions to make up for disproportionate effects of the war on drugs.
As long as existing growers are allowed to remain far bigger than newcomers, and federal law prohibits bank loans for marijuana businesses, it will be nearly impossible for many entrepreneurs to compete on an equal footing, Democratic state Rep. La Shawn Ford of Chicago said.
“There could be no equity because this system does not even allow for common folks to get into the business,” he said.
As an example of the difference between established cannabis companies and new entrepreneurs, existing growers may grow up to 210,000 square feet of flowering plants, while new craft growers initially will be limited to 5,000 square feet. In addition, many of the state’s retail stores have been consolidated under the largest companies, and most new licenses so far will be concentrated among a few wealthy investors.
Other new legislative proposals would create a cannabis control commission, add cannabis to schools’ health education, redistribute cannabis tax revenue, tighten conflict-of-interest provisions and require disclosure of cannabis business ownership.
Proponents of expanded cannabis licensing have planned a news conference to introduce the legislation Tuesday. Details of the bill were still being worked out last week among lawmakers, Gov. J.B. Pritzker’s office and new and existing cannabis business owners.
The state law that legalized recreational cannabis sales beginning last year allowed 21 existing medical marijuana cultivation sites to have exclusive control of the market. Medical cannabis dispensaries were given exclusive permission to sell recreational pot at their existing locations, as well as at new second sites.
The law called for 75 new retail licenses to be issued before May 1, 2020 — but that never happened. The governor’s administration delayed issuing the new licenses, blaming the COVID-19 pandemic. In September, after regulators announced that just 21 new applicants out of hundreds qualified for a lottery for the licenses, losing applicants cried foul.
The process was designed to favor “social equity” applicants, including those who had been affected by past low-level marijuana convictions, or those who lived in poor, high-crime, mostly minority areas designated as those harmed most by the war on drugs.
But many applicants who qualified included wealthy and politically connected white investors who partnered with minorities, or who agreed to hire a majority of social equity workers. In addition, only those who had 51% or more ownership by military veterans got bonus points that earned perfect scores to qualify for the license lottery.
In response to lawsuits and complaints about the process, Pritzker agreed to give applicants a second chance to correct deficiencies in their applications, and to be rescored by contracted accounting firm KPMG. But that process has dragged out for months. Corrected applications were due this month, but officials still were in the process of reviewing them.
To address the debacle, Ford planned to introduce legislation this week to create 75 new licenses for the initial group of applicants. That round of applications, known as 1b, would create a minimum qualifying “cut” score, rather than having only perfect scores qualify, in effect doing away with the veteran ownership requirement.
Then, under Ford’s proposal, there would be a second round of new applications for another 75 licenses. That round would eliminate a clause that allows for those who hire social equity workers to qualify as social equity owners. The change is meant to ensure that more minority owners would qualify.
There was also a tentative proposal to allow customers to see and smell cannabis products in stores before any purchase. Currently, retailers may not display their stash.
Among some 300 cannabis-related bills introduced in Springfield, most of which are unlikely to pass, a few stand out.
One proposal provides that a county or municipality may allow the sale and consumption of cannabis at temporary events, clubs, and tours of cultivation centers.
Another bill would transfer cannabis business licensing and oversight from existing state regulators to a new Cannabis Control Commission to be appointed by the governor.
Yet another would require schools to teach the medical and legal ramifications of cannabis use, similar to warnings about alcohol and drug use.
And one measure provides that no one may knowingly allow an animal to ingest cannabis, including secondhand smoke, in a way that results in the animal’s sickness or death.
State Rep. Marty Moylan, a Democrat from Des Plaines, who initially opposed legalization, introduced bills to require disclosure of cannabis business owners, which the state now generally keeps secret. He also introduced a bill to prohibit lawmakers, state pot regulators and their immediate family members from having a financial or voting interest in a cannabis business.
“There are plenty of cracks in the system,” Moylan said, “and the result has greatly benefited a small number of wealthy individuals instead of a large and diverse number of local business owners.”
Asked about the licensing legislation, a spokeswoman for the governor, Charity Greene, issued a statement that Pritzker will issue licenses in a “fair, equitable” manner, and support laws to address equity issues and benefit communities hardest hit by the war on drugs.