On May 4, 2019, Governor
Pritzker and key legislators unveiled a long-anticipated proposal to legalize
the use of cannabis for adults over the age of 21 under Illinois law (Amendment No. 1 to SB 7). The
proposed law would allow residents over the age of 21 to possess up to 30 grams
of cannabis and grow up to five plants per household. The Act prohibits the use
of cannabis in public places including government buildings.
While the draft legislation might be amended and still has to be approved by the General Assembly, it is not
too early for local governments to prepare for the proposed law's
sweeping changes affecting cannabis business establishments, including land use/zoning, tax revenues, employee policies, expungement obligations, among others. We can't possibly go into everything that is in the 533 page bill, but we have provided a brief summary of some of the provisions that affect units of local government below.
One Year to Prohibit Cannabis Business
Establishments
The draft legislation
contains a provision that will allow local governments to "opt-out"
or entirely prohibit cannabis business establishments in their jurisdiction,
including dispensaries, cultivation centers, craft growers, processing
organizations, and transportation organizations. However, any
"measure prohibiting or significantly limiting" the location of
cannabis businesses has to be adopted within one year of the effective date of
the Act. After this one-year period has expired, local governments will have to
seek approval by referendum to adopt any prohibition or significant limitation
on cannabis businesses.
Regulate Cannabis Businesses
The current bill allows
local governments to regulate cannabis businesses but only to a certain extent.
The bill allows local governments to adopt (1) reasonable zoning ordinances
that do not conflict with the Act or unreasonably prohibit home cultivation and
use of cannabis; (2) ordinances and rules governing the time, place, manner,
and number of cannabis businesses; and (3) regulations on the consumption of
cannabis in a manner consistent with the Act.
This language would
permit local governments to impose distance restrictions between cannabis
businesses and other sensitive uses and locations, limit the hours of operation
of cannabis businesses, or set a cap on the number of cannabis businesses
allowed within the jurisdiction. The current bill also expressly allows local
governments to regulate cannabis businesses through the use of conditional
(special) use permits. While the bill allows local governments some regulatory
authority, the bill prohibits local governments from regulating cannabis
businesses in a more restrictive manner than allowed under the Act.
Importantly, this prohibition includes an express home rule preemption.
Employment Policies and Workplace Drug Policies
Under the current bill,
employers will have the authority to adopt reasonable and nondiscriminatory
employment policies concerning drug testing, smoking, consumption, storage or
use of cannabis in the workplace. In addition, employers will have the power to
discipline or terminate employment of an employee for violating an employer's
employment policies or workplace drug policy. The Act also establishes when an
employer may consider an employee to be under the influence of cannabis.
Municipal Cannabis Sales Tax
Under the current bill, both home rule and non-home rule municipalities can
adopt ordinances to impose a local tax on the operation of a cannabis
dispensary. The rate of tax cannot exceed 3% of the dispensary's gross receipts
from the sale of non-medical cannabis. If imposed, the tax may only be
imposed in 0.25% increments.
Expungement of Local Records and Offenses
The initial procedure
for expunging criminal records will be handled by the Illinois State Police
(ISP) as well as the State's Attorneys Office. However, local law
enforcement will have to automatically expunge records pertaining to arrests
for minor violations identified by the Department of State Police within 60
days of notice from ISP.
SB 7 is only a proposal at this time and still needs to pass
both the Illinois House and Senate and be signed by the Governor before it
becomes law. However, it is important to note that the current draft state
budget includes cannabis revenue, so, it is expected that the General Assembly
will move fairly quickly to consider passing legislation.
