Cannabis regulatory reform bill fails to advance in spring legislative session

By NIKA SCHOONOVER
Capitol News Illinois
[email protected]

SPRINGFIELD – A proposed cannabis reform bill won’t get further consideration until at least the General Assembly’s fall veto session after stakeholders failed to come to an agreement during the spring session’s final stretch.

Rep. La Shawn Ford, a Chicago Democrat and the bill’s sponsor, told Capitol News Illinois last week that Senate Bill 1559 didn’t pass in part due to disagreements around delta-8 THC, a synthetic psychoactive substance typically manufactured from hemp-derived CBD.

“We need to regulate it, make it safe, make sure that it’s taxed and treat it just like cannabis,” Ford said in an interview.

But advocates for the cannabis industry are pushing for a full ban. Ford said he refused to rewrite the bill to include a ban “without any serious dialogue from the public and from the state regulators.”

Delta-8, found in small traces of hemp and cannabis plants, is an easily accessible substance that can be purchased in licensed dispensaries but also in convenience stores that otherwise are prohibited from selling cannabis. Unlike the more well-known form of THC, delta-8 is often derived from CBD and causes a much milder high. But concerns over the substance’s safety have arisen across the country because it remains unregulated, and consumers of delta-8 have gotten sick after consumption.

On the federal level, the substance’s legal standing is murky. In response to a cannabis industry attorney’s inquiry about the substance’s legal status, the U.S. Drug Enforcement Administration issued a letter in February saying delta-8 should be considered an illegal controlled substance because it can only be obtained synthetically.

But last year the U.S. Court of Appeals for the Ninth Circuit ruled that delta-8 is generally legal because is derived from the cannabis plant, classifying it as hemp.

While the substance’s legal status remains uncertain, several states have moved to regulate or ban the drug because of safety concerns. The FDA received 104 reports of adverse events in patients who consumed delta-8 THC products between Dec. 1, 2020, and Feb. 28, 2022. In 55 percent of those reports, the individual needed some type of medical intervention.

Pamela Althoff, executive director of the Cannabis Business Association of Illinois, said she supports a ban because, in addition to its synthetic nature, it could be detrimental to the industry.

“To allow those types of products to proliferate undermines the cannabis industry,” Althoff said in an interview. “It will have a devastating effect on any new license holder who was trying to establish themselves, either from a cultivation craft grow side or from opening up a dispensary.”

Althoff added that her association will support regulating the substance eventually but wants to ban the drug immediately while regulation measures are finalized.

Peter Contos, deputy director of the Cannabis Equity Illinois Coalition, said they’ve been pushing for lawmakers to regulate delta-8 for over two years but they’re opposed to banning the substance.

“This needs to be regulated,” Contos said. “A ban is not going to get us any closer to the solution and it’s really key that we regulate this with intention and care so that we can ultimately expand this industry…but also ensure that products are safe and tested.”

Ford argued that banning it while trying to decriminalize cannabis and reform the industry would be hypocritical.

“If we ban it the way cannabis was banned, then we’re going to have a new crop of people that’s going to be entered into our criminal justice system,” Ford said.

Ford said negotiations would continue on the wide-ranging bill that was only introduced on what was scheduled to be the final day of the spring legislative session.

The measure as drafted would address multiple areas of the state’s burgeoning cannabis industry, including reforms for craft growers, dispensary operations and licensing procedures. The stalled bill did not include any language on delta-8.

Among other things, the bill would have increased canopy space for craft growers from 5,000 square feet to 14,000 square feet. That measure, Ford said, could help those businesses grow to be more competitive in the industry.

Ron Holmes, a lobbyist for CBAI, said in a committee hearing that they’re concerned about expanding the allowed amount of space for craft growers.

“What we’re going to have is scenario where we let 14,000-square-foot out the door for every license holder that exists in the state and that we’re going to have no room for new licensees,” Holmes said.

The measure also would have allowed dispensaries to operate drive-thru windows and offer curbside pick-up services, making sure they prioritize medical patients. It also would have amended licensing procedures by allowing conditional adult-use dispensary license holders an extra year to find a physical address.

Two smaller cannabis-related measures were able to pass this session, including a measure in the budget implementation bill that allows the Illinois Department of Financial and Professional Regulation to extend the deadline for conditional adult-use dispensary license holders to secure a physical location and become operational. The current deadline is July 1, but once Gov. JB Pritzker signs the budget package, the new deadline will be July 2023 – a 540-day extension.

Additionally, beginning Jan. 1, 2023, calendar year, cannabis businesses will be allowed to deduct ordinary and necessary business expenses from their income for state tax purposes.

Capitol News Illinois is a nonprofit, nonpartisan news service covering state government. It is distributed to hundreds of print and broadcast outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation, along with major contributions from the Illinois Broadcasters Foundation and Southern Illinois Editorial Association.