After weeks of wrangling on which items to include and exclude, the cannabis omnibus could not be agreed upon and was not brought up for a vote today, essentially killing all included items. Three items from the omnibus, though, escaped into the State budget.
The three cannabis items in Illinois’ budget that should pass just after midnight include:
The State Comptroller shall direct the State Treasurer to transfer the sum of $40,000,000 from the Compassionate Use of Medical Cannabis Fund to the Cannabis Business Development Fund.
Section 280e of the Internal Revenue Code uncoupling for “state tax deductions” for any cannabis establishment operating in this State and licensed under the Cannabis Regulation and Tax Act or any cannabis cultivation center or medical cannabis dispensing organization operating in this State and licensed under the Compassionate Use of Medical Cannabis Program Act.
An extension from 180 to 720 days for Conditional Adult Use Dispensing Organization Licensees to find a location within the BLS Region in which the license was awarded.
A ban of Delta-8 products, led by support from Verano, Cresco Labs, NGW, and Pharmacann, played a significant role in the disagreement on the omnibus between the Illinois House and Senate. The proponents of the ban argued that Delta-8 is a dangerous synthetic drug and needed to be banned to protect children. The supporters of the ban would not take less than a total ban in negotiations. In addition, the coalition of advocates supporting items in the omnibus could not agree amongst themselves, creating splits and ill will amongst some of the coalition members.
The $40,000,000 transferred from the Compassionate Use of Medical Cannabis Fund into Cannabis Business Development Fund was increased from $12,000,000. The added language states, “In addition to any other transfers that may be provided for by law, on July 1, 2023, or as soon thereafter as practical, the State Comptroller shall direct and the State Treasurer shall transfer the sum of $40,000,000 from the Compassionate Use of Medical Cannabis Fund to the Cannabis Business Development Fund.”
The Compassionate Use of Medical Cannabis Fund was originally created in the State treasury “to be used exclusively for the direct and indirect costs associated with the implementation, administration, and enforcement of this Act. Funds in excess of the direct and indirect costs associated with the implementation, administration, and enforcement of this Act shall be used to fund crime prevention programs.” The law originally stated, “Notwithstanding any other law to the contrary, the Compassionate Use of Medical Cannabis Fund is not subject to sweeps, administrative charge-backs, or any other fiscal or budgetary maneuver that would in any way transfer any amounts from the Compassionate Use of Medical Cannabis Fund into any other fund of the State.”
All moneys collected under Early Approval Adult Use Dispensing Organization Licenses issued before January 1, 2021 and remunerations made as a result of transfers of permits awarded to Qualified Social Equity Applicants shall be deposited into the Cannabis Business Development Fund. The Cannabis Business Development Fund was a special fund created in the State treasury, which shall be held separate and apart from all other State moneys, to be known as the Cannabis Business Development Fund. The Cannabis Business Development Fund shall be exclusively for the following purposes:
To provide low-interest rate loans to Qualified Social Equity Applicants to pay for ordinary and necessary expenses to start and operate a cannabis business establishment permitted by this Act;
To provide grants to Qualified Social Equity Applicants to pay for ordinary and necessary expenses to start and operate a cannabis business establishment permitted by this Act;
To compensate the Department of Commerce and Economic Opportunity for any costs related to the provision of low-interest loans and grants to Qualified Social Equity Applicants;
To pay for outreach that may be provided or targeted to attract and support Social Equity Applicants and Qualified Social Equity Applicants;
To conduct any study or research concerning the participation of minorities, women, veterans, or people with disabilities in the cannabis industry, including, without limitation, barriers to such individuals entering the industry as equity owners of cannabis business establishments; and
To assist with job training and technical assistance for residents in Disproportionately Impacted Areas.
The “state tax deductions” item states, “Section 280e of the Internal Revenue Code for state tax deductions for years beginning on or after January 1, 2023, for any cannabis establishment operating in this State and licensed under the Cannabis Regulation and Tax Act or any cannabis cultivation center or medical cannabis dispensing organization operating in this State and licensed under the Compassionate Use of Medical Cannabis Program Act, an amount equal to the deductions that were disallowed under Section 280E of the Internal Revenue Code for the taxable year and that would not be added back under this subsection. The provisions of this subparagraph (JJ) are exempt from the provisions of Section 250.”
The extended deadline item states, “If, within 720 180 days of being awarded a Conditional Adult Use Dispensing Organization License, a dispensing organization is unable to find a location within the BLS Region in which it was awarded a Conditional Adult Use Dispensing Organization License because no jurisdiction within the BLS Region allows for the operation of an Adult Use Dispensing Organization, the Department may authorize the Conditional Adult Use Dispensing Organization License holder to transfer its Conditional Adult Use Dispensing Organization License to a BLS Region specified by the Department.”
All other items in the omnibus failed to get a vote, including increasing craft growers canopy space, drive-through and curbside operations, permits telehealth medical exams for licensed health care providers, prohibiting the use of pesticides during the flowering stage, placed a moratorium on New Transporter License, standardize employee badging, vault definition, updated HVAC requirements, and deferral for transporting license fees. Earlier deletions from the cannabis omnibus also included the how to weight illegal cannabis by subtracting legal cannabis weight, licenses for testing facilities, packaging standards, transporting depots, and BLS Region transfer.
The Illinois Senate adjourned today, and the House will be in session until just after midnight so members can officially pass the bill one minute after midnight so it passes on Saturday. For more details on these articles, visit here.
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