United States: What's New For Medical Cannabis Facilities After The Cannabis Regulation And Tax Act

On June 25, 2019, Illinois Governor J.B. Pritzker signed into law the Illinois Cannabis Regulation and Tax Act ("CRTA"), making recreational cannabis use legal for adults 21 and older. Additionally, the CRTA addresses the following topics relevant to facilities currently operating under Illinois' 2013 Compassionate Use of Medical Cannabis Pilot Program Act (the "MCPPA"):

  • Early approval and secondary site applications for medical dispensaries;
  • Early approval applications for medical cultivation centers; and
  • The impact of the social equity component of CRTA on medical facilities.

Medical dispensaries

Existing medical cannabis dispensaries in good standing under the MCPPA as of the Effective Date of the CRTA – June 25, 2019 – may apply for an Early Approval Adult Use Dispensing Organization License ("Early Approval Dispensing License") which allows such dispensaries to sell cannabis for adult-use in the existing facility. Applications may be filed within 60 days of the Effective Date of the CRTA. Applications that comply with the below-listed requirements will receive an Early Approval Dispensing License within 14 days of the State's receipt of the completed application. Applications must include:

  • Payment of non-refundable $30,000 fee;
  • Proof of good standing as a registered medical cannabis dispensary;
  • Certification that applicant will comply with requirements of MCPPA;
  • Legal name and physical address of dispensing organization;
  • Certain personal information of each principal officer and board member;
  • Payment of a Cannabis Business Development fee equal to the lesser of 3% of applicant's total sales between June 1, 2018 and June 1, 2019, or $100,000; and
  • Identification of one of the listed social equity inclusion plans to be completed by March 31, 2021.

Applicants that fail to meet one of the above-listed requirements will receive a deficiency order, for which the applicant will have 10 calendar days to cure the deficiency and resubmit the application. Early Approval Dispensing Licenses are valid until March 31, 2021, by which time facilities must complete a renewal application.

In addition to Early Approval Dispensing Licenses, existing medical cannabis dispensaries may apply for licenses for a second adult-use-only facility. Unlike the Early Approval Dispensing License for existing facilities, applications for secondary sites are not required to be submitted within 60 days. Application requirements are the same as those listed above, except for the following additional requirements:

  • A copy of the current local zoning ordinance sections relevant to dispensary operations and documentation of approval;
  • A plot plan of the dispensary drawn to scale;
  • A statement that the dispensing organization agrees to respond to the State's supplemental requests for information;
  • Confirmation of ownership of the building or land to be used as the proposed dispensary or written certification from the property owner consenting to the operation of a dispensary on the premises;
  • A copy of the proposed operating bylaws, proposed business plans, proposed security plan, and inventory control plan; and
  • A $200,000 payment to the Cannabis Business Development Fund in lieu of the $100,000 or 3% payment required for existing medical facilities.

The State will release applications for secondary sites within 60 days of the Effective Date. Applicants for secondary sites will be required to submit proof that they have filed a zoning approval application. The State will award licenses for secondary sites based on a lottery including all applicants that submitted a complete application.

Medical cultivation centers

Like medical dispensaries, existing medical cultivation centers will receive priority in the application for Early Approval Adult Use Cultivation Center Licenses ("Early Approval Cultivation License"). Applications may be filed any time between 60 and 180 days after the Effective Date. Those approved for Early Approval Cultivation Licenses may begin sales on December 1, 2019. The application requirements are the same as for an Early Approval Dispensing License, except the application fee is $100,000, instead of $30,000, and the contribution to the Cannabis Business Development fund is the lesser of 5% of total sales between June 1, 2018 and June 1, 2019 or $750,000.

Applicants receiving an Early Approval Cultivation License must produce an adequate supply of cannabis for medical purchasers and if there is a shortage, purchasers of medical cannabis must be prioritized. Early Approval Cultivation Licenses are valid until March 31, 2021, by which time facilities must complete a renewal application.

Social equity component

As noted above, the CRTA has a social equity component which intends to reduce the barriers to ownership of cannabis business licenses. The program provides license application benefits and financial assistance to certain individuals. Additionally, existing medical dispensaries or cultivation centers seeking an early approval license must commit to completing one of the following Social Equity Inclusion Plans:

  1. Contribution of the lesser of 5% (or, in the case of dispensaries, 3%) of total sales from June 1, 2018 to June 1, 2019 or $100,000 to either:

    • The Cannabis Business Development Fund (in addition to any other fees required to be paid to the Cannabis Business development Fund);
    • A cannabis industry training or education program at an Illinois community college; or
    • A program that provides job training to those recently incarcerated or that operates in a Disproportionately Impacted Area (as defined in the CRTA);
  2. Participate as a host in a cannabis business incubator program for at least one year and provide mentorship and a loan of at least $100,000 to a licensee which qualifies as a Social Equity Applicant.

In addition to the above two options, holders of Early Approval Dispensing Licenses have the option of participating in a sponsorship program for at least two years in which the licensee provides an interest-free loan of at least $200,000 to a Social Equity Applicant.

Additional rules and regulations

The Illinois Department of Agriculture will finish administrative rules no later than January 1, 2020 and publish those rules by January 7, 2020. These rules will, inter alia, develop a system to score applications for subsequent licenses to be issued. Separately, the Illinois General Assembly has passed SB 2023, which aims to stabilize and make permanent the State's medical cannabis program. Among the changes that SB 2023 will bring upon the Governor's signing includes the addition of 11 new qualifying conditions for medical marijuana patients.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions