When Illinois joined 22 other states to legalize the use of medical marijuana, we began informing our readers that this could be the first step on a slippery slope down which Colorado and Washington, and now Alaska, have already gone – legalization for recreational use. We can certainly debate the pro’s and con’s of legalization of marijuana for recreational use, making it as available to the general public as cigarettes or alcohol, but the primary catalyst to the discussion of whether to take that next step has always been money. The State of Illinois is in economic crisis and it needs revenue. We have yet to see what additional revenue the State has collected from the implementation of the “Compassionate Use of Medical Cannabis Pilot Program Act,” which was signed into law by Governor Pat Quinn in August 2013, because the Act has not been fully implemented until this year. But if we look to some of the other states that are ahead of us, you can see why state legislators have put forward legislation to legalize recreational marijuana in Illinois . Yes, there IS a bill introduced in Springfield.
Reports indicate that Colorado, one of the first to legalize recreational marijuana (and give new meaning to John Denver’s “Rocky Mountain High”) is bringing in approximately $11,000,000 per month in sales and excise taxes on marijuana. Yes, that is $11MM per month! One source has estimated that if you adjust the numbers to the higher population in Illinois, that number in Illinois could result in monthly income as high as $26.8MM per month, or about $321.5MM per year! Similarly, Washington, which also legalized recreational marijuana in time for the Superbowl between the Denver Broncos and the Seattle Seahawks (ironic really), is averaging $2,400,000 per month. Using their taxation model and recalculating to Illinois population, you’ll see numbers still around $300MM per year. Easy money is very tempting.
House Bill 4276 (HB4276) sponsored by Rep. Kenneth Dunkin (D – 5th Dist. Chicago) is quite simply titled, “CANNABIS REGULATION&TAXATION.” The bill would create the Cannabis Regulation and Taxation Act. It would permit, for persons 21 years of age or older: (1) possessing, consuming, using, displaying, purchasing, or transporting cannabis accessories; (2) possessing, growing, processing, or transporting no more than 8 cannabis plants and possession of the cannabis produced by the plants on the premises where the plants were grown; (3) transferring 30 grams or less of cannabis or up to 6 immature cannabis plants to a person who is 21 years of age or older without remuneration; and (4) assisting another person who is 21 years of age or older in any of these acts.
This bill would also create an excise tax imposed at the rate of 10% of the sale price of the sale or transfer of cannabis from a cannabis cultivation facility to a retail cannabis store or cannabis product manufacturing facility. It would also amend the Unified Code of Corrections to create a new regulatory offense classification of offense, which is not to be considered a criminal offense, but a fine only for the amount specified in the offense or for which community service may be imposed for violations of this Act, and it would change various currently existing penalties for the possession of more than 30 grams of cannabis and for producing or possessing more than 8 cannabis sativa plants. According to the Illinois General Assembly website as of May 20, 2016, this bill had been referred to the Rules Committee back in August 2015 and advanced no further. While it did pass out of both House and Senate last year, Governor Rauner used his veto power to put it to rest. In a nutshell, this bill has died in the initial planting stage.
But, there is another bill currently active that decriminalizes the possession of 10 grams or less of marijuana. Senate Bill 2228 (SB2228) has bipartisan sponsorship in both the Senate (14 sponsors) and the House (9 sponsors). This bill, while not setting up a more formalized legalization and taxation of recreational marijuana, is a first step in that direction and has gained some traction. In short, the bill will amend the Cannabis Control Act, providing that that the possession of 10 grams or less of cannabis will be a civil law violation punishable by a minimum fine of $100 and a maximum fine of $200. (Currently marijuana possession of up to 10 grams is a class B misdemeanor punishable by fines up to $1,500 and up to six months in jail.) The law will also create the offense of unlawful use of cannabis-based product manufacturing equipment as a Class 2 felony. It will continue to permit any municipality or unit of local government to impose a fine for the possession of cannabis and not invalidate or affect those local ordinances. It will also amend the Illinois Vehicle Code by providing that a person shall not drive or be in actual physical control of any vehicle, snowmobile, or watercraft within this State when the person has, within 2 hours thereof, a tetrahydrocannabinol (THC) concentration in the person’s whole blood or other bodily substance of 5 nanograms or more of delta-9-tetrahydrocannabinol per milliliter of whole blood or 10 nanograms or more of delta-9-tetrahydrocannabinol per milliliter of other bodily substance from the unlawful consumption of cannabis (rather than a cannabis THC concentration in any amount as currently exists in the Illinois Vehicle Code). It will also amend various other Acts to so as to conform with this new law, and it would take effect immediately upon being signed into law. This more recent bill incorporates the changes that Rauner wanted to see in HB4276 (i.e. lower allowed possession and higher fines). With that being the case, it is strongly anticipated that Governor Rauner will sign off on the bill should it make its way to his desk.
On May 18, 2016, SB 2228 passed in both the House and the Senate. Next stop? Governor Rauner’s desk. It may be a very happy Memorial Day Weekend for some.
Thanks to I&F Partner Steve Murdock for this timely reporting. Steve has counseled Illinois businesses on this issue since it arose and we encourage Illinois employers and insurers to reach out to him with any questions as to how this might affect the workplace.