As the Illinois General Assembly’s fall veto session gets underway this week, advocates for independent cannabis operators are hoping to pass a list of rule changes they say would help ensure entrepreneurs of color finally get a foothold in the industry.
It’s been four years since lawmakers legalized recreational pot sales in Illinois, but many business owners from disadvantaged backgrounds have struggled to gain momentum. As of Oct. 17, state records show that 52 social equity dispensaries and 10 independent craft growers were operating, just a fraction of the nearly 300 combined licenses the state has awarded to date.
Earlier this year, a legislative effort aimed at jump-starting social equity in Illinois’ cannabis industry fizzled just short of the finish line. Now, social equity advocates and their allies in Springfield are trying again to loosen restrictions on independent growers, streamline background checks for job applicants and prevent large-scale cannabis transporters from monopolizing business, among other priorities.
“We’re not trying to move mountains with these policies — these are some very straightforward rule changes proposed by folks who work in this space,” said Peter Contos, deputy director of the Illinois Cannabis Equity Coalition. “It could be a complete catastrophe if we continue to deny people these basic opportunities.”
State Rep. La Shawn Ford (D-Chicago), who authored the failed omnibus cannabis bill during the spring legislative session, told Illinois Answers he hopes to revive those policies and to pass two additional bills that he says would push forward social equity in the cannabis industry.
But passing any pot-related legislation will be a heavy lift during the six-day veto session that began Tuesday. Gov. JB Pritzker has downplayed efforts to revisit state funding for migrant resettlement, predicting that the veto session will instead revolve around a rewrite of a nuclear energy bill he vetoed over the summer.
And Ford’s bills depend on cooperation from large-scale, multistate cannabis firms represented by the Cannabis Business Association of Illinois.
1. Lifting Cap on Grow Space
Craft growers are channeling their energy into one priority for veto session: a rule change raising the cap on their allowed canopy space.
The state’s 2019 cannabis legalization law already sets a maximum of 14,000 square feet for craft growers, but it requires them to first reach 5,000 square feet before asking regulators for permission to expand further.
The lower limit has been an albatross around the necks of growers as they look for investors, said Scott Redman, founder of the Illinois Independent Craft Growers’ Association.
“The amount of infrastructure you have to build — the offices, the transport bay, the vaults — is the same whether you have 5,000 or 14,000 square feet to grow,” Redman said. “And all of that costs millions of dollars.”
Giving licensed growers automatic access to up to 14,000 square feet of canopy space would make it much easier for them to pitch investors on higher revenue estimates, he said.
2. Restrictions on Hemp-Based Cannabinoids
Ford’s omnibus proposal stumbled in the spring after the Cannabis Business Association of Illinois, which represents large, multi-state cannabis firms, raised an alarm over a lack of restrictions on delta-8, a psychoactive cannabinoid derived from hemp. Many in the industry argue purveyors of delta-8 have an unfair advantage because the substance is not regulated as heavily as cannabis due to a federal loophole.
This month, Ford introduced a bill that would regulate hemp-based cannabinoid products like delta-8 . His proposal would require businesses to register with state agencies before they can sell, grow or manufacture those products.
“Prohibition didn’t work for alcohol, it didn’t work for cannabis, and it won’t work for delta-8,” Ford said. “So we want to regulate, tax it and make sure it’s as safe for consumption as possible.”
A spokesperson for the Cannabis Business Association of Illinois, whose organizers raised objections in the spring that ultimately tanked the bill, said last week it was still reviewing Ford’s proposals.
“We acknowledge that these are complicated issues,” said Jeremy Unruh, the association’s spokesman who is also a senior executive with the interstate cannabis firm PharmaCann. “Our goal will be to work through the nuances of these policy proposals with legislators to come up with responsible solutions that foster small business and protect consumers.”
3. Employee Badge Policy Reform
Social equity organizers are also pushing to make it easier for employees to pass background checks to get state-approved ID badges to handle cannabis. Currently, applicants with felony records are automatically excluded from being licensed to work in the industry. Ford’s proposal would open a path for them to get cannabis jobs.
Background checks have been convoluted and inconsistently applied, which has excluded many people from the industry because of their criminal backgrounds, said Contos, of the Illinois Cannabis Equity Coalition. That has undermined the state’s goal of welcoming people into the cannabis industry who have been harmed by drug prohibition, he argued.
“If you have a [criminal] record, it is still far too difficult to get a job in the industry,” Contos said. “The longer we wait to update the background check system, the fewer people that can actually work in this industry.”
4. Curbside Access for Medicinal Patients
As the COVID-19 pandemic threw Illinois’ new legal cannabis industry into a tailspin, state regulators implemented temporary rules that allowed curbside pickup and drive-thru options for people who have medicinal cannabis cards.
It “immediately became apparent” that those accommodations should have been allowed all along, said Katie Sullivan, a nurse practitioner and co-founder of the counseling practice Modern Compassionate Care.
“It’s not just needed for people who are physically disabled,” Sullivan said. “How about parents who need to pick up their medicine? They can go through the drive-thru at Walgreens, but they can’t bring a child into a dispensary.”
State regulators have repeatedly extended the pandemic-era rule, partially in response to pressure from advocates like Sullivan. But she and other members of the Cannabis Equity Illinois Coalition say curbside pickup and drive-thru allowances should be written into the law.
5. Anti-Monopoly Rules for Transporters
As social equity dispensaries and craft growers struggle to open, advocates have complained of a growing backlog of social equity applicants who have received cannabis transporter licenses but can’t yet drum up business. Meanwhile, they have to keep paying fees to the state or risk losing their licenses.
Part of the problem, Ford and Contos say, is that a June 2020 executive order let large-scale cannabis cultivators transport their own products, which allowed those firms to dominate the industry and avoid doing business with license holders all together. A second bill proposed by Ford this month would change that.
Ford’s proposal would require all cannabis growers and dispensary owners use “third-party transporters” licensed by the state. It would only allow them to transport their own goods if they’ve exhausted all attempts to work with third parties.
“If the transporters can’t gain business from the big operators, they’re going to go away,” Ford said. “They’ll have wasted their money.”
The same will be true of social equity dispensary owners and craft growers if Ford’s other proposals are overlooked and kicked to next year’s legislative session, he said.
“If we don’t provide real, intentional help for these social equity dreamers, we’re going to let them down as a state,” he said.