The Cannabis Business Association of Illinois (CBAI) touted in a press release today five years of regulated adult-use cannabis. CBAI, which serves as the voice of Illinois’ cannabis industry, celebrated the milestone by reflecting on challenges and opportunities. CBAI listed five key points, including increasing diversity, regulating intoxicating hemp, lowering taxes, regulatory changes, and expanding access.

INCREASING DIVERSITY

Illinois’ cannabis program is unique in that it centers diversity and equity. While the number of women and minority owners has increased in recent years, more can be done. A major hurdle is securing capital, especially for social equity license holders. In the absence of federal banking standards for the cannabis industry, the Illinois Department of Commerce and Economic Opportunity (DCEO) has grant and loan programs to support small businesses, but it’s not sufficient to support needed growth. A Disparity Study conducted by the Cannabis Regulation Oversight Office recommended broadening the availability of financing through DCEO’s Cannabis Business Development Fund, which serves as an important revenue stream for social equity license holders.

REGULATE INTOXICATING HEMP

The proliferation of intoxicating hemp products is undermining Illinois’ carefully crafted legal cannabis market. State licensed cannabis dispensaries adhere to strict protocols for cultivation, processing, and distribution to ensure the safety and well-being of consumers. The unregulated market faces no such rules. By evading regulatory oversight and taxation, unlicensed operators can undercut prices and unfairly compete with legitimate cannabis businesses, undermining the economic viability of the cannabis industry. Lawmakers can act by passing HB4293, which will license and regulate hemp consumer products such as CBD while banning the sale of dangerous synthetic hemp-derived intoxicants like Delta-8 that are sickening children and adults.

LOWERING TAXES

Cannabis taxes in Illinois are among the highest in the nation. As neighboring states legalize adult use cannabis, Illinois consumers are crossing state lines to purchase cannabis in states like Missouri and Michigan where lower tax rates result in more affordable products. Illinois should focus on ways to lower taxes to keep sales within our state’s economy without sacrificing the support that the industry provides to so many state programs.

REGULATORY CHANGES

More than a dozen agencies regulate the cannabis industry in Illinois, creating a burdensome patchwork of policies and procedures. This can be streamlined by creating one body charged with oversight of the industry. Other changes should focus on reducing barriers of entry to employment; adoption of alcohol-model for vendor non-payment, which would require dispensaries to pay growers for product within 30 days or deliveries would be suspended; as well as other changes related to regulations on growing operations.

EXPANDING ACCESS

Too many consumers do not have easy access to legal cannabis dispensaries. Focus should be placed on expanding access to consumers, including licensing dispensaries in cannabis deserts, allowing curbside pickup and drive thru purchases for adult use cannabis, as well as allowing medical patients to make purchases at any licensed dispensary. Consideration should also be given to streamlining licensing procedures to expand lounges allowing for social consumption.

According to the press release, adult-use cannabis sales “now account for nearly 80 percent of cannabis sales in Illinois, with the remainder sold for medical use. Statewide, there are now more than 230 dispensaries operating across Illinois, including 100 dispensaries operated by social equity license holders. There are also licensed cultivators, infusers, craft growers, transporters and numerous ancillary cannabis businesses that support the industry.” As of a couple months ago, according to the Department of Agriculture, 87 licenses were awarded to craft grow businesses, 21 have been approved for construction, and only 16 of those businesses are operational.

In Fiscal Year 2024, adult-use cannabis sales generated more than $457 million in state tax revenue. Tax dollars generated by those sales help support numerous state initiatives, including the Restore Reinvest Renew grant program, which supports organizations that work on violence prevention, economic development, youth development and citizen reentry in communities impacted by the War on Drugs. CBAI also states, “Illinois has led the nation on expungements for cannabis offenses, recognizing the negative impact of cannabis criminalization, especially in Black communities. Illinois’ efforts led to pardons of federal marijuana convictions and calls for other states to pardon those convicted for marijuana possession at the state level.”

“Like all new programs, there have been challenges in establishing the state’s legal cannabis market, but there have also been great successes,” said Tiffany Chappell Ingram, Executive Director of the Cannabis Business Association of Illinois. “While there is more that can be done to strengthen the industry in Illinois, we have come a long way in five years, especially when it comes to reducing the stigma around cannabis. We look forward to working collaboratively with Gov. JB Pritzker and members of the General Assembly to ensure the state’s cannabis industry can realize its full potential.”

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