In late 2014 and early 2015 we first began reporting on Illinois’ Compassionate Use of Medical Cannabis Pilot Program Act. Now that this Act has been in effect since January 1, 2015 and with the national uptick on the legalization of cannabis, both medicinally and recreationally, we thought it time for an update on where Illinois stands and where it is going.
For some background, you may recall that this legislation was passed as a “pilot” program, which means it has an expiration date. Initially set to expire on January 1, 2018, this was extended to July 1, 2020 simply because the program really did not get up and running until the early part of 2016 because of all of the regulations that had to be put in place and then the licenses that had to be approved for the growers, transporters and dispensaries. The Act allows for persons called “qualified registered patients” (QRP’s) with one or more of several qualifying conditions (which you can find at http://www.dph.illinois.gov/) to be authorized for the use of limited quantities of medicinal marijuana, which in turn can only be obtained from a limited number of dispensaries and only by prescription from a physician specifically licensed by the State to prescribe cannabis. It is a heavily regulated system with a limited number of regional growers, distributors and dispensaries throughout the State. Meanwhile, cannabis remains a Schedule 1 controlled substance under Federal law. This means that all cannabis must be purchased and consumed within the State of Illinois. Under the Act, Employees who become qualified registered patients are not required to inform Employers of this, but if a QRP Employee tests positive for THC (the primary ingredient in cannabis) in a post-accident or random drug test for a “zero tolerance” Employer, the Employer’s drug policy is not restricted from terminating that employee simply because she is a QRP. The Employer, however, if it learns of the QRP status of the Employee is not allowed to discriminate against that employee simply because of her QRP status. There are many more details and exceptions, but that is the Act in a nutshell.
So what’s new? We predicted back in 2015 that within the next five years, we should not be surprised to see Illinois follow the path of states such as Colorado and Washington in legalizing the use of cannabis for recreation. We are two plus years down the road, and the discussions have already begun fueled by an increasing number of other states (California, Nevada, Maine, Massachusetts, Oregon and Alaska) having legalized recreational use of cannabis and at least six more states likely to do so within the next year. The tax revenue reported in Washington and Colorado is enticing for any state in a debt crisis like it’s never seen before. While the federal government within the past couple of months refused to declassify cannabis as a Schedule 1 Controlled Substance (which makes the use, sale and transport of cannabis anywhere within the U.S. illegal), Washington D.C. also joined the ranks of the eight states that have now legalized the recreational use of cannabis. Ironic isn’t it that those that have decided not to declassify cannabis can actually light up a joint at their homes in our country’s capitol?
The U.S. Attorney General’s Office has issued a memorandum that allows the Federal Controlled Substance Act and the states’ cannabis acts to co-exist stating that it will not seek to prosecute those persons within the states where the use of cannabis has been legalized, either medicinally or recreationally. This does not mean it allows those residents to transport the goods across state lines or use cannabis in states where it is not legalized. That is still strictly forbidden. Bottom line, stay within the state where it is legalized and follow the rules for that state, and we (the feds) will not bother you.
Illinois has introduced legislation (HB 2353 and SB 316), but not spoken seriously at this point, about legalizing recreational cannabis. The legislation did receive committee hearings, but was rather summarily tabled this year. That said, the light is clearly turned on and there is discussion with some saying it could very well happen in 2018.
Bur for now, let’s start with the decriminalization of marijuana in Illinois in July 2016. Although not mainstream news, in July 2016 Governor Rauner signed into law a bill that reduced punishment for individuals that possess up to 10 grams of marijuana to fines of $100 to $200. Local governments can add other penalties as they choose, but state laws which would have previously treated such possession as a class B misdemeanor with up to six months in jail and fines of up to $1,500 have been removed. Additionally, the state will expunge records of these fines every six months, automatically. And, in addition to the possession, the law changed the DWI requirement from the presence of “any amount” of THC in driver thought to be intoxicated to require the presence of 5 nanograms of THC in the blood for a DWI conviction. Mind you, the possession of cannabis for anyone aside from the QRP’s and their registered caregivers in Illinois is still currently illegal, but this reduction in the illegality of it is a second step.
But what about the medical program? Where is that at, and how is it working? You can follow this program, including current updates and whether any new conditions are added to the list (PTSD was just recently approved to be on this list) at the website for Illinois Compassionate Use of Medical Cannabis Pilot Program Act found here: https://www.illinois.gov/gov/mcpp/Pages/default.aspx. You will find the following reported as of October 4, 2017: Retail sales in August 2017 alone totaled $7,765,672.87 (yes, that is millions of dollars) serving 15,650 patients who purchased a total of 390,553 grams of dry cannabis. There are currently 53 licensed dispensaries in Illinois serving those 15,650 current QRP’s, and total retail sales from November 2015 through September 30, 2017 from those dispensaries is $96,348,861.29. 30,000 applications for QRP status have been filed since November 2015.
Where are we going? Illinois currently collects 7% tax revenue on the wholesale of medical cannabis, which according to the link above has been $55,825,656.71 since November 2015. That is a total tax revenue in two years of $3,907,795.97 from a total of 15,650 people. The population of Illinois as of July 2016 was 12.8 million, approximately 23% of which are under the age of 18. So if we conservatively estimate 65% of the population is over 21 (the age used as the legal age for use of recreational cannabis) and then assume 30% of that population decides to use recreational cannabis regularly, we could see 15,650 purchasers increase to 2.5 million purchasers. Perhaps more than would actually use cannabis recreationally, but you get the idea. A State in a budget crisis looking for more revenue . . . We will hold to our prediction that by 2020, Illinois may very well join the ranks of other states legalizing the use of recreational cannabis.
Finally, we are seeing courts in other states find in favor of injured employees that medicinal marijuana is a “reasonable and necessary” medication for treatment of work injuries and ruling that the insurance company, third-party claims administrator or employer must reimburse the employee for money spent to pay for this. Because, again, the federal government does not condone the use of cannabis, federally regulated banks and insurance companies are having a hard time with this because it essentially means that these federal institutions could be considered laundering money for an illegal drug trade. Hmm. Regardless, the state courts in Maine, Connecticut and New Jersey have recently ruled that under their state laws the employer is liable for the payment of the costs for legally prescribed medicinal cannabis, and we do not see that this will be viewed any differently in any of the other states. Now how those payors work out the payment for this is another matter, but for the time being it will most likely be a reimbursement to the employee, who in most all cases is paying cash at the dispensaries for those medications.
This is still developing law across the country, and we encourage an open dialogue and further investigation into the merits, or lack thereof, of medicinal cannabis as well as a discussion into whether it should be declassified by the federal government as a Category 1 Controlled Substance. We will continue to follow these developments and keep our readers informed of any cases in Illinois that address medicinal cannabis.
Thanks to Partner G. Steven Murdock for the summary of these new developments. Steve works out of the Chicago and St. Louis offices of Inman and Fitzgibbons and chairs the Firm’s Legislative Watch Committee. .