CBA Record Sept-Oct 2019

Y O U N G L A W Y E R S J O U R N A L

What You Need to Know about Illinois’ New Cannabis Regulation and Tax Act By Tony Traina

O n May 31, 2019, the Illinois Gen- eral Assembly blazed a new trail for cannabis in Illinois when the House of Representatives followed the Senate in passing HB 1438, known as the Cannabis Regulation andTax Act (CRTA).The CRTA was signed into law by Governor Pritzker on June 25, 2019. While cannabis for medical use has been legal in Illinois since 2013, and decriminalized since 2016, the new legislation makes Illinois the 11th state (and second in the Midwest, after Michigan) to legalize cannabis for adult use (those 21 years of age and older). Further, it is the first state to legalize cannabis through the legislature as opposed to a ballot initiative. With 13 million residents andmore than 100million estimated tourists annually, Illinois is set to become one of the largest markets for legal cannabis in the United States. No longer solely the province of stoners and hippies, the cannabis industry is ramp- ing up hiring and operations in Illinois in the wake of the legislation. With that comes a host of new legal and compliance ques- tions ripe for lawyers to answer. In addition to introducing a slew of regulations for businesses and individuals who engage in cannabis commerce, the new legislation will impact other areas of state law, such as the Illinois tax code and criminal code, leaving lawyers from a variety of specialties to make sense of what is to come. The legislation is sure to make Illinois a hotbed of cannabis activity. The open ques- tion is whether the law has done enough to balance the commercial interests of bringing legitimacy and regulation to the cannabis market with the social interests of ensuring communities that have been traditionally targeted by discriminatory drug policies are not victimized by the law, and can reap the benefits of money flowing into the newly legal industry. Below is a guide for what to know about the CRTA.

Rauner signed a law that decriminalized possession of up to 10 grams of cannabis, making it a civil offense punishable by a fine of $100 to $200. Unlawful possession of greater amounts may still be classified as a misdemeanor, with felony classification for possession of larger amounts of cannabis. Public consumption of cannabis is still against the law (as it is in most states that have legalized cannabis purchase and sale). But, there is precedent for the government to pave the way for “social consumption” of cannabis in designated areas; for example, in May 2019, Colorado’s governor signed a law that will eventually allow businesses there to apply for licenses to become “marijuana hospitality spaces” where cannabis may be sold and consumed on site. Whether that will occur in Illinois is an open question. Finally, the CRTAmakes clear that noth- ing will prohibit employers from adopting “reasonable” zero tolerance or drug free employment policies, or policies related to drug testing or the smoking, consumption, use, or storage of cannabis in the workplace. This includes disciplining or terminating an employee for violating the employer’s poli- cies. Expunging Criminal Records Governor Pritzker and other advocates of the CRTA touted the bill’s sweeping criminal justice reform measures, not least of which are its expungement provisions. Illinois will be the first state to provide for automatic expungement of certain past cannabis-related convictions. The legisla-

CRTA Details Beginning January 1, 2020, the CRTA will legalize possession and sale of up to 30 grams of cannabis, expunge past cannabis- related convictions, and create a compre- hensive tax structure for sales of cannabis, all while being decidedly focused on bringing social justice to historically disadvantaged communities. Cannabis Possession and Sale Under the CRTA, Illinois residents 21 years of age and older will be allowed to legally possess and purchase up to: (1) 30 grams of cannabis flower, (2) cannabis-infused products containing up to 500 mg of tetra- hydrocannabinol (THC), and (3) five grams of cannabis product in concentrated form. Non-residents will be able to purchase and possess half these amounts. The act clarifies that these are cumulative amounts, mean- ing an individual can legally buy 30 grams of raw cannabis flower, 500 mg of THC cannabis-infused products, and five grams of concentrated cannabis all in one transaction. The legislation establishes the requisite mens rea for obtaining or possessing an amount over these limits, providing that “no person shall knowingly obtain, seek to obtain, or possess an amount of cannabis … that would cause him or her to exceed the possession limits.” Low-level unlawful pos- session of cannabis in excess of the amounts provided for in the new law will continue to be punishable by fines, furthering Illi- nois’ decriminalization efforts originally passed in 2016, when then-Governor Bruce

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