Illinois Becomes the First State to Legalize Cannabis Via Legislature


Ryan Allway

June 3rd, 2019

App, Policy


Illinois may be the eleventh state to legalize adult-use cannabis, but it’s the first to approve sales through the state legislature rather than a ballot measure.

Beginning on January 1, 2020, adults 21 and older will be able to purchase cannabis products in licensed stores and possess up to 30 grams of raw cannabis, 500 mg of THC, or five grams of concentrate. Non-residents can also purchase and possess half of that amount at any given time. With sixth largest population in the country, the market could be worth billions per year.

Medical cannabis patients will also be eligible to purchase cannabis seeds and grow up to five plants at their residence. These plants must be grown securely and outside of public view, while possession limits still apply outside of their residence. Obviously, the sale of home grown cannabis is prohibited unless part of a licensed cannabis business.

Cannabis Business Opportunities

The Illinois cannabis industry will issue several types of cannabis licenses, including a so-called ‘craft grower’ license for between 5,000 and 14,000 sq. ft. of canopy. The other licenses include dispensaries, processors, transporters, and cultivation centers that can grow up to 210,000 sq. ft. The state will review and process these licenses in March 2020.

By May 1, 2020, the state hopes to have new dispensary licenses issued before approving up to 40 craft growers and transporter licenses by July 1. Once the disparity and market study is complete, the state may issue additional licenses, if required, throughout the remainder of the year. These licenses must take into account the findings of the study.

Rather than taking a blanket tax approach to the industry, Illinois will charge a tax rate based on the relative potency of the cannabis and product type. Products that are more concentrated with THC will be subject to higher tax rates with a range of 10% tax for less than 35% THC to 25% tax for products with greater than 35% THC.

Criminal Justice Reform

The Illinois bill institutes sweeping criminal justice reform, including automatic clemency for convictions of up to 30 grams and review-dependent expungements for amounts of between 30 and 500 grams. State regulators estimate that around 770,000 cannabis-related cases will be eligible for expungement, which could save the state millions in legal costs.

In addition to these expungements, a social equity program will provide benefits for those that have suffered from the war on cannabis. Businesses owned or staffed by those that have been directly affected by the war on cannabis will be eligible for access to financial resources for startup costs and points for legal cannabis business applications.

The tax revenue from cannabis sales will also be diverted to several areas, such as 20% toward mental health services and substance abuse programs.

Ryan Allway

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.


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