Illinois has the potential to become an extremely lucrative opportunity for cannabis entrepreneurs. Since the state’s medical cannabis program was initiated, sales of medical marijuana have topped $260 million — far more than originally projected.
The early stages of the state’s medical cannabis program were highly restrictive. As a result, demand for medical cannabis was very low in the beginning. But with the state’s medical marijuana program officially making headway, combined with recent expansions of the program, and a high likelihood of the state legalizing adult recreational use of cannabis, things are looking up for stakeholders in the Illinois cannabis industry.
In the long run, Illinois, considered to be the “Capitol of the Midwest” is expected to become a major player in both the recreational and medical marijuana markets in North America.
Green Thumb Industries
Tidal Royalty Corp.
Cresco Labs, which also operates in Ohio and Pennsylvania, plans to expand two of its three facilities in Illinois and has expanded its Illinois workforce from 60 employees in early 2018 to more than 140 since recent expansions were signed into law. Green Thumb Industries has increased its workforce by nearly 50 percent since the beginning of 2018 and now employs more than 160. And cannabis investment firm Tidal Royalty Corp. is investing tens of millions of dollars to expand strategic acquisitions.
In this document, we’ll cover a brief history of the evolution of Illinois cannabis regulations including the new hemp pilot program. We’ll also go over the Illinois government agencies responsible for regulating the state’s cannabis industry. And we’ll provide a comprehensive list of links to valuable resources for cannabis entrepreneurs in Illinois.
The Compassionate Use of Medical Cannabis Pilot Program Act (HB 1) was first enacted in Illinois in 2013 and went into effect on January 1, 2014. The measure created a state-regulated cannabis cultivation, distribution, and retail sales program.
Under the Compassionate Use Act, patients are permitted to obtain up to 5 ounces of cannabis per month. The act called for the licensing of 60 dispensaries (just over 200,000 residents per dispensary) and 22 cultivation centers. Qualifying medical conditions in Illinois include ALS, cancer, Crohn’s disease, epilepsy, glaucoma, cancer, and many others. One glaring omission in the initial list of 35 qualifying conditions was chronic pain which is the most common complaint for which patients seek out medical cannabis.
The state’s current medical marijuana program is actually just a pilot program which is scheduled to expire in 2020 but is widely expected to be renewed.
Recent Changes and Expansions
Some of the big changes to the medical marijuana program which were enacted in 2018 include a streamlining of the medical use approval process, the elimination of fingerprinting requirements, the addition of certain medical conditions, and implementation of a separate.
As of mid-2018 Illinois had around 44,000 registered medical marijuana patients. That number is now expected to increase rapidly. In 2018 two new bills were signed by sitting Governor Bruce Rauner. One of them, in an attempt to step the state’s opioid addiction and overdose epidemic created the Opioid Alternative Pilot Program which now permits Illinois residents who have been prescribed opioids to replace them with medical marijuana. Along with the expansion, a fingerprinting and background check requirement was dropped.
The addition of the opioid replacement program and the loosening of patient regulations is expected to dramatically increase the demand for medical marijuana in the state. And because existing players will have a head start should recreational cannabis be legalized, the values of those licenses are expected to rival those in larger states such as Florida and New York.
Information on the Compassionate Use of Medical Cannabis Pilot Program Act, including the full text can be found on the Illinois General Assembly website.
Illinois lawmakers are in the process of fine-tuning legislation to end marijuana prohibition in Illinois. Illinois Governor J.B. Pritzker is a vocal supporter of legalizing, regulating, and taxing adult recreational cannabis.
According to a 2018 Paul Simon Public Policy Institute poll, more than two-thirds of Illinois voters are in favor of recreational legalization. And, thanks to Illinois Gov. Pritzker, voters may soon get their way. Shortly after his inauguration, Pritzker called for the swift legalization of recreational marijuana.
Although the governor is pushing to have legislation drafted in the first half of 2019, recreational sales are not expected to be implemented until 2020 at the earliest.
Currently, Illinois’ medical marijuana program only allows for 60 dispensary licenses to serve the state’s 13 million residents. That number will have to greatly increase if recreational use is legalized.
Stakeholders with a foothold in the state’s current medical program will have a comfortable head start over incoming competitors.
Also in 2018, Governor Rauner signed The Illinois Industrial Hemp Act, a bill legalizing the cultivation hemp and the product of CBD oil. The bill passed by unanimous vote of the state’s Senate, and by a vote of 106-3 in the House. Under the measure, the state Department of Agriculture is issuing licenses to farmers while regulators work to hash out rules for variables such as lab testing. Experts believe that hemp legalization will create hundreds of jobs and provide up to $100 million in annual revenue.
The regulation of the Compassionate Use of Medical Cannabis Pilot Program Act falls under three state agencies:
The Illinois Department of Financial and Professional Regulation
The Illinois Department of Financial and Professional Regulation (IDFPR) includes the operations of the following agencies:
In addition to being responsible for licensing for cannabis operations, IDFPR oversees the regulation and licensure of banks and financial institutions, real estate businesses, and professionals, and various licensed professions. It also enforces standards of professional practice and protects the rights of Illinois residents in their transactions with regulated industries.
The stated mission of the Illinois Department of Financial and Professional Regulation is “to utilize responsive, innovative, transparent, and efficient (R.I.T.E.) governance to create an ideal regulatory environment that (1) allows economic growth to flourish, and (2) effectively optimizes consumer choice.”
Department of Agriculture
The Illinois Department of Agriculture is responsible for registering and regulating up to 22 cultivation centers allowed under the Compassionate Use program.
The application period is currently closed [last updated 2/19/19].
The Illinois Department of Agriculture regulates various facets of the agriculture industries of Illinois.
Oversees soil and water conservation
Supervises the weights and measures of various commodity products, including gasoline
Supervises the Illinois State Fair.
Supervises the production of livestock
DOA Adopted Rules can be found here.
Department of Public Health
The Illinois Department of Public Health (IDPH) is responsible for preventing and controlling disease and injury, regulating medical practitioners, and promoting sanitation. The department is tasked with assuring that cultivators, processors, and dispensaries are conforming to cannabis safety regulations including implementing on-site inspections and handing out citations and fines for non-compliance in this area.
Furthermore, patients and caregivers must register with the state of Illinois via the Illinois Department of Public Health (IDPH). The agency also issues identification cards for patients and caregivers.
Requirements for prospective cannabis business owners are strict in Illinois. All applicants must undergo a background check. Applicants must also release full disclosure of past bankruptcies, defaults on student loans, and child support or alimony payments. They must also provide full tax returns for previous years.
Requirements for Illinois Cannabis Business Applications
Below is a partial list of the information that you’ll be required to provide along with your application and fees. Particular provisions might apply only to dispensaries or to cultivators.
Fingerprint background check
Full disclosure of past bankruptcies and loan defaults
Child support and alimony payments
Full tax returns for previous years
Ownership structure including an organizational chart
Articles of incorporation/organization
Operating or partnership agreements
Agreements relating to profit/loss sharing
A complete disclosure of anyone with a direct or indirect interest in a cannabis business
Inventory and tracking plans
Zoning of the proposed location
Additional information that can improve the chances of being awarded a permit:
Certified woman- or minority-owned business
Plans for environmentally friendly operations
Plans for facilitating medical cannabis research
Plans to positively impact your local community
Plans to combat substance abuse
Background Check Consent Forms
Background check consent forms (called “fingerprint content forms”) for the Department of Agriculture, Department of Financial and Professional Regulation, and Department of Public Health are available here:
The application window for cultivation center permits has closed. The Department will not accept any additional applications for cultivation center permits.
A single entity can own a maximum of 3 cultivation permits. Furthermore, an individual is prohibited from being an owner, partner, officer, director, shareholder, or member of more than 3 cultivation centers in the state.
The state law has provisions for up to 60 dispensary licenses on the condition that there are sufficient qualified and geographically dispersed applicants.
Applicants must demonstrate that they have at least $400,000 in liquid assets and $50,000 in escrow in order to apply.
The first round of applications for cannabis dispensaries has ended.
All cannabis products produced in Illinois must undergo laboratory testing to test cannabis for cannabinoid concentration and contaminants prior to entering the consumer market. Furthermore, all products are required to undergo in-house Quality Assurance testing.
Established medical laboratories and cultivation centers in the state of Illinois can use the application below to apply for a cannabis lab permit.
All cannabis operations in the state of Illinois are required to implement a seed-to-sale cannabis tracking system to monitor cultivation, testing, production, distribution, and sales. Furthermore, the state has chosen BioTrackTHC as its tracking platform.
If you have comments, suggestions or more detailed inquiries you can email these regulatory agencies:
Further information about the act and the roles of the Department of Public Health and the Department of Financial and Professional Regulation may be found at mcpp.illinois.gov .
An ongoing list of updates to the Illinois medical cannabis pilot program can be found here:
For those unable to attend the three Town Hall meetings, the state has posted the transcripts of those three meetings.
Below are links to the actual rules and regulations that apply to the Illinois cannabis industry.
Definitions and terms used in connection with the medical cannabis pilot program act administered by the Illinois Department Of Financial and Professional Regulation can be found here:
The following information pertaining to the rules and regulations has been provided by the General Assembly:
The General Assembly’s Illinois Administrative Code database includes only those rulemakings that have been permanently adopted. This menu will point out the Sections on which an emergency rule (valid for a maximum of 150 days, usually until replaced by a permanent rulemaking) exists. The emergency rulemaking is linked through the notation that follows the Section heading in the menu.
Updating the database of the Illinois Compiled Statutes (ILCS) is an ongoing process. Recent laws may not yet be included in the ILCS database, but they are found on this site as Public Acts soon after they become law. For information concerning the relationship between statutes and Public Acts, refer to the Guide.
Because the statute database is maintained primarily for legislative drafting purposes, statutory changes are sometimes included in the statute database before they take effect. If the source note at the end of a Section of the statutes includes a Public Act that has not yet taken effect, the version of the law that is currently in effect may have already been removed from the database and you should refer to that Public Act to see the changes made to the current law.