Tag Archives: Illinois

A Survey of State CBD & Hemp Regulation Since The 2018 Farm Bill

By Brett Schuman, Jennifer Fisher, Brendan Radke, Gina Faldetta
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Since the December 20, 2018 enactment of the Agricultural Improvement Act of 2018, better known as the Farm Bill, we have seen a number of new state laws addressing both the legality of hemp and products derived therefrom, most noticeably cannabidiol, better known as CBD. This piece provides a brief overview of some of the more interesting state laws concerning hemp and CBD, as well as recent developments.

Legality of Hemp

Since the passage of the Farm Bill, the vast majority of states have legalized the cultivation and sale of hemp and hemp products. However, certain states maintain laws barring some or even most forms of hemp.

The most stringent of those states is Idaho, where hemp remains illegal. In March 2020, Senate Bill 1345 – legislation that would have allowed for the production and processing of industrial hemp – died in the House State Affairs Committee, due to concerns that legalizing hemp would be the first step toward legalizing “marijuana”; that the bill contained too much regulation and that it was otherwise unworkable. As a result, Idaho is currently the only state without a legal hemp industry. Hemp with any THC, even at or below the 0.3 percent threshold under the Farm Bill, is considered equivalent to “marijuana” in Idaho and is illegal (see below for a discussion of CBD in Idaho).

Indiana, Iowa, Louisiana, and Texas have enacted bans on smokable hemp. Indiana law prohibits hemp products “in a form that allows THC to be introduced into the human body by inhalation of smoke.” Iowa has amended its Hemp Act to ban products introduced to the body “by any method of inhalation.” Louisiana prohibits “any part of hemp for inhalation” except hemp rolling papers, and Texas law prohibits “consumable hemp products for smoking.”

Some of these bans have been challenged in court. In Indiana, a group of hemp sellers requested an injunction against the smokable hemp ban in federal court, on the grounds that the federal Farm Bill likely preempted the Indiana law. In September of 2019, the district court issued the requested injunction, but the U.S. Court of Appeals for the Seventh Circuit overturned that decision in July 2020, stating that the order “swept too broadly.” The Seventh Circuit noted that the 2018 Farm Bill “expressly provides that the states retain the authority to regulate the production of hemp” and remanded the case for further proceedings.

Similarly, in Texas, hemp producers have sued in state court over the smokable hemp ban, questioning its constitutionality and arguing that it would result in a loss of jobs and tax revenue for the state. According to those producers, smokable hemp comprises up to 50 percent of revenue from hemp products. On September 17, 2020, Travis County Judge Lora Livingston issued a temporary injunction blocking enforcement of the law until trial, which currently is set to commence on February 1, 2021. Judge Livingston had previously issued a temporary restraining order to that same effect.

State Laws Regulating CBD

State laws and regulation on hemp-derived CBD are varied, and the legality of a CBD product often comes down to its form and marketing.

FDAlogoAs an initial matter, it must be noted that notwithstanding the Farm Bill the FDA currently prohibits hemp-derived CBD from being be sold as dietary supplements, and food (including animal food or feed) to which CBD has been added cannot be introduced into interstate commerce. As discussed below, a substantial minority of states, including California, follow the FDA’s current position on the permissibility of putting hemp-derived CBD in food or dietary supplements.

Certain states include strict limitations on CBD, none more so than (once again) Idaho. Lacking any legal hemp industry, Idaho restricts CBD products to those having no THC whatsoever, rejecting the generally accepted threshold of not more than 0.3 percent THC. Idaho law also requires that hemp CBD be derived only from “(a) mature stalks of the plant, (b) fiber produced from the stalks, (c) oil or cake made from the seeds or the achene of such plant, (d) any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks, or (e) the sterilized seed of such plant which is incapable of germination.”

Kansas similarly prohibits CBD with any amount of THC, though the law is murkier than Idaho’s. While Senate Bill 282 allowed possession and retail sale of CBD effective May 24, 2018 by removing CBD oil from the definition of “marijuana,” this was broadly interpreted to apply to THC-free CBD only. Later legislation, Senate Substitute for HC 2167, effective July 2019, allowed the farming of hemp with THC levels aligned with the Farm Bill definition (i.e., 0.3 percent THC or lower), but expressly prohibited the use of industrial hemp in: cigars, cigarettes, chew, dip, or other smokeless forms of consumption; teas; liquids for use in vaporizing devices; or “[a] ny other hemp product intended for human or animal consumption containing any ingredient derived from industrial hemp that is prohibited pursuant to the Kansas Food, Drug and Cosmetic Act or the Kansas Commercial Feeding Stuffs Act,” though this final section provides that “[t] his does not otherwise prohibit the use of any such ingredient, including cannabidiol oil, in hemp products,” the law’s only reference to CBD. The Kansas Bureau of Investigation has reportedly made statements indicating that CBD with any level of THC remains illegal.

Just some of the many hemp-derived CBD products on the market today.

Mississippi only recently legalized the cultivation of hemp via Senate Bill 2725, the Mississippi Help Cultivation Act, which was signed into law on June 29, 2020. House Bill 1547, passed on April 16, 2019, imposed content requirements upon CBD products within Mississippi: to be legal in Mississippi, a CBD product must contain “a minimum ratio of twenty-to-one cannabidiol to tetrahydrocannabinol (20:1 cannabidiol:tetrahydrocannabinol), and diluted so as to contain at least fifty (50) milligrams of cannabidiol per milliliter, with not more than two and one-half (2.5) milligrams of tetrahydrocannabinol per milliliter.” Moreover, CBD products produced in Mississippi must be tested at the University of Mississippi’s lab. However, subject to these restrictions, Mississippi allows the sale of CBD products, including edibles, contrary to the restrictions of many of states considered friendlier to hemp.

Perhaps more surprising is Hawaii, which restricts the sale and distribution of CBD, aligning with the FDA’s guidance. In Hawaii it is illegal to add CBD to food, beverages, as well as to sell it as a dietary supplement or market it by asserting health claims. It is also illegal to add CBD to cosmetics, an uncommon restriction across the many states with CBD-specific laws and regulations. Unlike Idaho and Mississippi, which have no medical marijuana programs, Hawaii has long legalized marijuana for medical purposes and in January 2020 decriminalized recreational possession. Hawaii very recently enacted legislation allowing the production and sale of cannabis-infused consumable and topical products by medical cannabis licensees effective January 1, 2021, but this legislation did not address CBD. Given the foregoing, Hawaii’s restrictions on CBD stand out.

The structure of cannabidiol (CBD), one of 400 active compounds found in cannabis.

Beyond broad CBD restrictions, many more states prohibit the use of CBD within food, beverages, or as dietary supplements. For instance, twenty states – including California, Georgia, Illinois, Massachusetts, Michigan, New Jersey, New York, and Washington – prohibit the sale of CBD in food or beverage. In California, a bill to overhaul California’s hemp laws, Assembly Bill 2028, failed when the legislative session concluded on August 31, 2020 without a vote. AB 2028 would have allowed CBD in food, beverages, and dietary supplements (though, interestingly, it would have banned smokable hemp). As a result, California remains a relatively restrictive state when it comes to hemp-derived CBD, notwithstanding the legality of recreational marijuana.

New York allows the manufacture and sale of CBD, but requires CBD products to be labeled as “dietary supplements.” This mandate conflicts directly with the FDA’s position that CBD products are excluded from the definition of a dietary supplement. Further, despite the state’s categorization of CBD products as dietary supplements, New York prohibits the addition of CBD to food and beverages. These regulations have resulted in a confusing landscape for retailers and manufacturers in the Empire State.

Several states also have labeling requirements specific to CBD products. Batch numbers and ingredients are ubiquitous, but an increasingly common requirement is the inclusion of a scannable code that links to specific information about the product. States imposing this requirement include Florida, Indiana, Texas, and Utah. Indiana is viewed as having one of the more comprehensive labeling requirements for CBD products – or, depending upon your perspective, the most onerous.

The Hopes of Illinois Social Equity Applicants

By Taneeshia Thomas
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It is almost impossible to turn on the tv and not find a show or news conference or even live footage of an ongoing protest over “Black Lives Matter” or “Economic Equality.” The same situation exists with social media platforms, radio broadcast, etc. All sharing the common theme of social equity. While we all seek a solution, the state of Illinois is doing their part by awarding the coveted adult use cannabis business licenses for craft growing, infusion, transportation and dispensaries to social equity applicants by using a scoring system that favors the social equity applicant. We believe in this vision at TGC Group and our dream is to pay it forward.

Taneeshia Thomas and her husband, Christopher Lacy, who did 3.5 years in prison for growing cannabis in 2009.

We see the world, especially for minorities living in poverty, quite differently because of where we come from. “Black Lives Matter” is a movement to save the lives of all people and have human life viewed equally no matter the race of an individual. Economic equality is a totally different fight. Our communities that are impoverished need cash infusions. There needs to be financial infrastructure that recirculates the dollars from the poor communities and that comes from having business owners in the affected community to put their profits back into their community. There needs to be a system of lending that is not based on credit scores and criminal background checks because most people at the bottom will never qualify. An example would be my husband, Christopher Lacy: he went to prison for 3.5 years for growing cannabis back in 2009. He is not a violent man; he never even had a fight in prison. He spent much of his time in prison teaching inmates how to read, write and most importantly, he tried to teach them economics. He is educated about cannabis because he has been intimately involved with this plant and has been growing it for just about 20 years. Yet when he tried to apply for jobs in Illinois for growing cannabis, his invisible barrier starts with the resume. Just think about it, my husband, knows more about cannabis than most people in the industry today and could manage a facility with ease. No one could see his worth because of his background and work experience? This is the same situation with so many others in our poor communities. We know for a fact that there is hidden talent in the impoverished communities and prison system, and we intend to find it and empower these individuals to rebuild what was destroyed by the war on drugs. I speak for all the ghettos when I say this: give us access to the capital and we will get the rest done on our own. Conventional banks have their hands tied with this approach because they are regulated, but private funds have more flexibility. The excess capital needed to rebuild will not come from jobs, it only comes from ownership. Luckily, J.B. Pritzker and Toi Hutchinson are aware of this and hence created the social equity fund to help the social equity applicants fund their projects if and when they are awarded a license. We must find a way to give to the bottom so that the dollars can trickle up. Trickledown economics is kind of like that movie “Platform” on Netflix. There are never enough resources to get to the bottom because the people sending the resources down have no idea how to get them to the bottom floors of society. Trickle up economics can start at the very bottom rungs of society and still will reach to this highest level of the economic system because its built in such a way that it will inevitably get there.

State Sen. Toi Hutchinson (D-Park Forest), now The Illinois Cannabis Regulation Oversight Officer

These new licenses, literally pathways to financial freedom if operated correctly and efficiently, are revenue machines capable of changing our community. This change does not come from providing jobs (although jobs do help and will be available), but by providing capital to rebuild. These funds can provide scholarships, business loans, even small infrastructure projects can get accomplished via the tax revenue generated by the local governments. We have already made a written commitment to give a portion of net margins to the village. Capital in the right hands can make dreams come true. In theory, poverty can be solved. Poverty is not a prerequisite to the American way of life. That is why we were so proud to get zoning approval by our village. They see what we see. We can change neighborhoods like Beacon Hill. The dollars must recirculate in the community. Wherever you see high poverty rates you see high crime rates. This is not a coincidence. If you can lower the poverty rate you can lower the crime rates. This raises the quality of life for everyone. We see the state is on board, the county is on board, the Village of Park Forest is on board and the citizens of the community are on board. Now all we need is the license and capital to get the resurrection started.

Unlike other applicants, we were only capable of applying for one license for a craft grow facility. Some may see this as a disadvantage because only 40 licenses will be issued for this purpose. I wish we could have applied for more to increase our odds, but resources were scarce and applying was not cheap. We decided to stick with the efficient market theory and put all our eggs in the one basket that we know we can carry and be successful with. Without the help of Justice Grown, we would’ve never completed the application so shout out to them and anyone else that helped “true” social equity applicants apply.

The wheels are in motion so all we can do is wait to see who wins. I would hate to be on the team who must decide who wins these licenses. Everyone knows large corporations found ways to apply as social equity applicants because they only needed a certain number of “social equity” employees to qualify. But if you go ask the employees, not the owners, if they have been cured of their financial burdens and see if $15 has raised their quality of life to a middle-class level. The answer is emphatically NO. You cannot give out band-aids for heart attacks. If these large corporations are awarded the licenses, it will perpetuate the cycle of poverty. We do not personally have anything against the big companies. Like Toi Hutchinson said regarding the first round of dispensary and cultivation licenses: we needed the big company dollars to fund the next round of licenses. Well, the next round is here. Let’s do right by the communities that were truly affected by the war on drugs and on a more personal level and my reason for applying: let’s do right by my husband because he lost 3.5 years of his life and was excluded from participating with his family for doing what is now legal.

Cannabis Quality Conference & Expo Goes Virtual

By Cannabis Industry Journal Staff
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The prospect of large events with 50 or more people in Illinois taking place in 2020 seems highly unlikely. Illinois released a plan called Restore Illinois that consists of five phases for reopening the economy. Illinois entered into Phase 2 in early May;  it is not until Phase 5 that gatherings of 50 or more people are allowed, and only if there is a vaccine, or a highly effective treatment that is widely is available, or the elimination of new cases over a sustained period of time.

Regardless of federal and state guidance, we feel it would be irresponsible and premature to host a large gathering of people in a confined meeting space this year. That is why, instead of a three-day, in-person event, we will host a series of webcasts over the course of eight weeks in the Fall.

Every Tuesday, starting on September 8 and through Election Day, we will host two presentations and two Tech Talks, followed by a panel discussion. The Cannabis Quality Virtual Conference Series will culminate with a post-election analysis to take place November 10.

This will still be an interactive virtual conference, where attendees can ask questions and get in touch with speakers. We look forward to seeing everyone virtually there.

We are now accepting abstract submissions for the Cannabis Quality Virtual Conference Series. Below you’ll find a list of topic areas we are looking for abstract submissions on:

  • Government Policy, Reform & Legalization Efforts

    This will still be an interactive virtual conference, where attendees can ask questions and get in touch with speakers.
  • State Regulations, Licensing & Requirements
  • USDA Hemp Programs
  • Laboratory Testing
  • Quality & Safety in Manufacturing
  • Cultivation Best Practices
  • Marketing, Branding & Communications
  • Legal, Insurance & Data Analysis
  • Extraction & Infused Products Best Practices
  • Standards, Certifications & Accreditations
  • International Market Analysis

If you’d like to submit an abstract, click here. If you’re interested in sponsorship opportunities, please contact RJ Palermo at Rj@innovativepublishing.net. If you’re planning on attending, stay tuned for announcements to come when registration opens.

We will continue to monitor the situation, but in 2021 we are planning on bringing this event back to Illinois for a face-to-face conference. Until then, we look forward to joining everyone virtually.

The Cannabis Quality Conference & Expo

With the COVID-19 pandemic continuing to take a toll on live events, Innovative Publishing Company, Inc. has made the careful decision to convert the Cannabis Quality Conference, which historically has taken place in Schaumburg, IL, to a virtual conference. Every Tuesday, beginning on September 8 through November 10, the Cannabis Quality Virtual Conference Series will host two presentations and two sponsored Tech Talks, followed by a panel discussion with attendees. The abstract submission portal is open and registration will open soon.

Illinois Raises Over $10 Million of Tax Revenue in January

By Cannabis Industry Journal Staff
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After just one month of legalized recreational cannabis, Illinois is already seeing a massive return on their investment. According to the Chicago Sun Times, Illinois has raised roughly $10.4 million in tax revenue from their newly legal market ($7.3 million in cannabis tax revenue and $3.1 million in retails sales tax revenue).

When Illinois Governor J.B. Pritzker first announced their estimated budget before the market was legalized, he predicted that Illinois would generate about $28 million in tax revenue in the first six months. The totals from January more than doubling the predicted per month revenue indicates that his office’s estimates were significantly lower than reality.

Illinois Governor J.B. Pritzker

In total, dispensaries in the state did just under $40 million in sales in January, which makes it the second-largest first month rollout in the country. For reference, Illinois did $39.2 million total sales in their first month which, whereas Nevada took the #1 spot with $39.8 million.

About 35% of the tax revenue that Illinois generates will be used in the state’s general revenue fund, 10% will be spent on previous expenses, 25% goes to the Restore, Reinvest and Renew Program, an initiative for unemployment and preventing violence and recidivism, and the last 30% of that revenue goes towards mental health services, substance abuse services, public education and awareness campaigns as well as a police grant program.

Toi Hutchinson, senior adviser on cannabis control to Governor J.B. Pritzker, told the Chicago Sun Times that the tax revenue from legalization is to be spent on social equity and helping communities adversely impacted by the war on drugs. “Revenue raised in this first month will soon begin flowing back into those communities to begin repairing the damage done by the failed policies of the past and creating new opportunities for those who have been left behind for far too long,” says Hutchinson.

Moments from the 2019 Cannabis Quality Conference

By Cannabis Industry Journal Staff
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The 1st Annual Cannabis Quality Conference & Expo featured dynamic discussions both in the sessions as well as on the exhibit floor. Take a look at some of the highlights from this year’s conference and expo.

All image credit: amyBcreative

Andrew Kline, Director of Public Policy at NCIA, to Speak at 2019 Cannabis Quality Conference & Expo

By Cannabis Industry Journal Staff
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EDGARTOWN, MA, Aug. 6, 2019 – Innovative Publishing Co., publisher of Cannabis Industry Journal, has announced that Andrew Kline, Director of Public Policy at the National Cannabis Industry Association (NCIA), will serve as the keynote speaker at the 2019 Cannabis Quality Conference & Expo on October 2. The Cannabis Quality Conference & Expo (CQC) takes place October 1-3 in Schaumburg, IL (just outside Chicago). The CQC is an educational and networking event for cannabis safety and quality solutions. Serving the Midwest market with a unique focus on science, technology and compliance, the CQC enables attendees to engage in conversations that are critical for advancing careers and organizations alike.

Andrew Kline, Director of Public Policy at NCIA

To see the agenda for the CQC and registration pricing, click here.Kline’s keynote talk is titled “The Business of Cannabis: Why Public Policy Matters.” It will feature two discussions: First, a general update on public policy and government relations with respect to the cannabis industry. Second, Kline will discuss how cannabis should be regulated at the federal level once legalization happens.

Kline joined NCIA’s leadership team in April of this year and began his work with the organization swiftly. He led a coalition of CBD and hemp businesses to prepare public comments and testimony for the purpose of educating and influencing FDA rule-making. Prior to working with NCIA, he served as President of the National Association of Cannabis Businesses (NACB), the first self-regulatory organization for the cannabis industry.

Before joining the NACB, Kline was Special Counsel for the Federal Communications Commission’s (FCC) Enforcement Bureau where he was responsible for high-profile investigations and public policy negotiations affecting the telecommunications, internet, cable and satellite industries. He also served as Chief of Staff and Senior Advisor for Intellectual Property Enforcement in the Obama Administration.

Andrew Kline will be delivering the keynote talk on October 2. To learn more about the Cannabis Quality Conference & Expo, click here. 

Illinois Legalizes Cannabis

By Aaron G. Biros
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Illinois just became the first state to legalize and regulate adult use cannabis through the legislature.

Earlier this month, the House passed HB 1438 in a 66-47 vote, with bipartisan help. Roughly 24 hours before that, the same bill cleared the Senate in a sweeping 38-17 vote. Governor J.B. Pritzker signed the Cannabis Regulation and Taxation Act (CRTA) into law on Tuesday, making Illinois the 11th state in the nation to legalize adult use cannabis and the first to do so via the legislature.

Illinois Governor J.B. Pritzker campaigned and won the election on this issue and helped design HB 1438. Sponsors of the bill, Senator Heather Steans (Chicago-D) and Representative Kelly Cassidy (Chicago-D), along with Governor Pritzker, have been viewed as the architects of this piece of legislation.

Illinois Governor J.B. Pritzker

Back in January, the sponsors of the bill announced their plans, backed with full support from the Governor’s office. Then in early May, the coalition announced the formal introduction of the bill.

Some supporters say the state legalizing cannabis in this particular fashion will have shockwave effects throughout the rest of the country. Not only did Illinois pass this legislation, but they did so with social equity and public health in mind. Back when the sponsors of the bill announced their intentions in January this year, Sen. Steans told a town hall meeting in Springfield, “We have a huge opportunity in Illinois to do this right and carefully… If we don’t address the social-justice issues of this, if we don’t address the collateral consequences of the ‘war on drugs,’ we will have failed.”

The Marijuana Policy Project (MPP) has a handy overview of the legislation that breaks down exactly what was legalized. An MPP press release says this legislation is, “the most far-reaching social equity provisions ever included in a legalization law. It includes reinvestment in communities disproportionately harmed by cannabis prohibition, broad expungement provisions, and measures to ensure the industry includes communities that have been targeted by cannabis enforcement.”

You can find more information about the bill, proposed rules, licensing processes and regulations here.

Illinois Senate Passes Bill To Legalize Adult Use Cannabis

By Aaron G. Biros
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Illinois lawmakers came one step closer to legalizing adult use cannabis this week. The Illinois Senate voted 38-17 to pass HB 1438, which is now headed to the House for a vote. Sponsors of the bill, Senator Heather Steans (Chicago-D) and Representative Kelly Cassidy (Chicago-D), along with Governor J.B. Pritzker, have been viewed as the architects of this piece of legislation.

Illinois Governor J.B. Pritzker

This is not the first time that Democrats in the Illinois legislature have attempted to legalize adult use cannabis. Back in 2017, state Representative Kelly Cassidy and state Senator Heather Steans, the two lawmakers sponsoring this bill, sponsored a legalization bill that failed to garner support.

Governor Pritzker, who campaigned on cannabis legalization, has been vocal about his support to push this bill through the legislature. Back in January, the sponsors of the bill announced their plans with the bill, backed with full support from the Governor’s office. Then in early May, the coalition announced the formal introduction of the bill.

It is clear that Illinois is excited about cannabis, including the less-than-0.3%-THC variety, or legal hemp under the Farm Bill. Within two days of announcing the opening of license applications for growing hemp, the Illinois Department of Agriculture received roughly 350 applications.

Regarding the bill that just cleared the Senate, one particularly contentious issue raised was the allowance for “home grow.” The Senate approved the bill after a provision was added allowing just medical cannabis patients to grow their own, not everyone.

If this bill manages to pass through the House, Governor Pritzker is expected to sign the bill immediately. The bill would legalize and regulate sales of cannabis and cannabis products on January 1, 2020.

The Illinois Hemp Industry Is About To Explode

By Aaron G. Biros
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Within two days of announcing the opening of license applications for growing hemp, the Illinois Department of Agriculture received roughly 350 applications. According to the Lincoln Courier, that number has since grown to 575 applications in the past couple weeks. The Illinois Department of Agriculture has already issued 341 licenses for growing and 79 for processing, as of last Friday.

According to Jeff Cox, Chief of the Bureau of Medicinal Plants at the Illinois Department of Agriculture, a lot of this excitement comes from farmers wanting to branch out from the state’s traditional crops, such as corn and soybeans. “Corn and soybean prices have not been the best over the past few years, and so I think they see this as an opportunity to have a different source of income on their farm,” Cox told the Lincoln Courier.

Morgan Booth, spokeswoman for the Illinois Department of Agriculture told the Chicago Tribune that they were expecting this kind of enthusiasm among farmers. “We knew there was a lot of interest in it,” says Booth. “We were very pleasantly surprised.”

Back in late December of 2018, after the Farm Bill was signed into law, the Illinois Department of Agriculture was quick to jump on the hemp train. They announced their intentions to submit plans for a program to the federal Department of Agriculture, opened a 90-day public comment period, and finalized the rules in April. The state’s regulators hoped to expedite the process and have farmers growing hemp by June 1, which appears to be successful. Dozens of hemp farmers throughout the state are anticipating their first crops will be in the soil by the end of the month.