Illinois has the potential to become an extremely lucrative opportunity for cannabis entrepreneurs. Since the state’s medical cannabis program was initiated, sales of medical marijuana have topped $260 million — far more than originally projected.

The early stages of the state’s medical cannabis program were highly restrictive. As a result, demand for medical cannabis was very low in the beginning. But with the state’s medical marijuana program officially making headway, combined with recent expansions of the program, and a high likelihood of the state legalizing adult recreational use of cannabis, things are looking up for stakeholders in the Illinois cannabis industry.

In the long run, Illinois, considered to be the “Capitol of the Midwest” is expected to become a major player in both the recreational and medical marijuana markets in North America.

Some of the more prominent cannabis operations already staking a claim in the Illinois cannabis market include:

• Cresco Labs

• Green Thumb Industries

• Tidal Royalty Corp.

Cresco Labs, which also operates in Ohio and Pennsylvania, plans to expand two of its three facilities in Illinois and has expanded its Illinois workforce from 60 employees in early 2018 to more than 140 since recent expansions were signed into law. Green Thumb Industries has increased its workforce by nearly 50 percent since the beginning of 2018 and now employs more than 160. And cannabis investment firm Tidal Royalty Corp. is investing tens of millions of dollars to expand strategic acquisitions.

In this document, we’ll cover a brief history of the evolution of Illinois cannabis regulations including the new hemp pilot program. We’ll also go over the Illinois government agencies responsible for regulating the state’s cannabis industry. And we’ll provide a comprehensive list of links to valuable resources for cannabis entrepreneurs in Illinois.

• Medical Cannabis Pilot Program FAQ

• Satutes: Compassionate Use of Medical Cannabis Pilot Program Act.

A Brief History of Illinois Cannabis Regulations

While the history of cannabis regulations in the US has been fraught with controversy, Illinois is evolving the way they look at cannabis.

The Compassionate Use of Medical Cannabis Pilot Program Act (HB 1) was first enacted in Illinois in 2013 and went into effect on January 1, 2014. The measure created a state-regulated cannabis cultivation, distribution, and retail sales program.

Under the Compassionate Use Act, patients are permitted to obtain up to 5 ounces of cannabis per month. The act called for the licensing of 60 dispensaries (just over 200,000 residents per dispensary) and 22 cultivation centers. Qualifying medical conditions in Illinois include ALS, cancer, Crohn’s disease, epilepsy, glaucoma, cancer, and many others. One glaring omission in the initial list of 35 qualifying conditions was chronic pain which is the most common complaint for which patients seek out medical cannabis.

The state’s current medical marijuana program is actually just a pilot program which is scheduled to expire in 2020 but is widely expected to be renewed.

Recent Changes and Expansions

Some of the big changes to the medical marijuana program which were enacted in 2018 include a streamlining of the medical use approval process, the elimination of fingerprinting requirements, the addition of certain medical conditions, and implementation of a separate.

As of mid-2018 Illinois had around 44,000 registered medical marijuana patients. That number is now expected to increase rapidly. In 2018 two new bills were signed by sitting Governor Bruce Rauner. One of them, in an attempt to step the state’s opioid addiction and overdose epidemic created the Opioid Alternative Pilot Program which now permits Illinois residents who have been prescribed opioids to replace them with medical marijuana. Along with the expansion, a fingerprinting and background check requirement was dropped.

The addition of the opioid replacement program and the loosening of patient regulations is expected to dramatically increase the demand for medical marijuana in the state. And because existing players will have a head start should recreational cannabis be legalized, the values of those licenses are expected to rival those in larger states such as Florida and New York.

Information on the Compassionate Use of Medical Cannabis Pilot Program Act, including the full text can be found on the Illinois General Assembly website.

• Compassionate Use of Medical Cannabis Pilot Program Act

• Rules for Administration of the Compassionate Use of Medical Cannabis Pilot Program

Recreational Marijuana In Illinois?

Illinois lawmakers are in the process of fine-tuning legislation to end marijuana prohibition in Illinois. Illinois Governor J.B. Pritzker is a vocal supporter of legalizing, regulating, and taxing adult recreational cannabis.

According to a 2018 Paul Simon Public Policy Institute poll, more than two-thirds of Illinois voters are in favor of recreational legalization. And, thanks to Illinois Gov. Pritzker, voters may soon get their way. Shortly after his inauguration, Pritzker called for the swift legalization of recreational marijuana.

Although the governor is pushing to have legislation drafted in the first half of 2019, recreational sales are not expected to be implemented until 2020 at the earliest.

Currently, Illinois’ medical marijuana program only allows for 60 dispensary licenses to serve the state’s 13 million residents. That number will have to greatly increase if recreational use is legalized.

Stakeholders with a foothold in the state’s current medical program will have a comfortable head start over incoming competitors.

Further reading:

• JB Pritzker on Legalizing Marijuana

• VIDEO: JB Pritzker: "It's Time"

Hemp Pilot Program

Also in 2018, Governor Rauner signed The Illinois Industrial Hemp Act, a bill legalizing the cultivation hemp and the product of CBD oil. The bill passed by unanimous vote of the state’s Senate, and by a vote of 106-3 in the House. Under the measure, the state Department of Agriculture is issuing licenses to farmers while regulators work to hash out rules for variables such as lab testing. Experts believe that hemp legalization will create hundreds of jobs and provide up to $100 million in annual revenue.

Further reading:

• Gov. Bruce Rauner signs bill legalizing industrial hemp

Regulatory Agencies

The regulation of the Compassionate Use of Medical Cannabis Pilot Program Act falls under three state agencies:

• The Illinois Department of Financial and Professional Regulation — Responsible for the licensing and regulation of all cannabis operations in the state.

• The Illinois Department of Agriculture — Responsible for the licensing of medical cannabis cultivation facilities.

• The Illinois Department of Public Health — Responsible for the Medical Cannabis Patient Registry program.

The Illinois Department of Financial and Professional Regulation

The Illinois Department of Financial and Professional Regulation (IDFPR) includes the operations of the following agencies:

• Division of Banking

• Division of Financial Institutions

• Division of Professional Regulation

• Division of Real Estate

In addition to being responsible for licensing for cannabis operations, IDFPR oversees the regulation and licensure of banks and financial institutions, real estate businesses, and professionals, and various licensed professions. It also enforces standards of professional practice and protects the rights of Illinois residents in their transactions with regulated industries.

The stated mission of the Illinois Department of Financial and Professional Regulation is “to utilize responsive, innovative, transparent, and efficient (R.I.T.E.) governance to create an ideal regulatory environment that (1) allows economic growth to flourish, and (2) effectively optimizes consumer choice.”

Department of Agriculture

The Illinois Department of Agriculture is responsible for registering and regulating up to 22 cultivation centers allowed under the Compassionate Use program.

The application period is currently closed [last updated 2/19/19].

The Illinois Department of Agriculture regulates various facets of the agriculture industries of Illinois.

• Oversees soil and water conservation

• Supervises the weights and measures of various commodity products, including gasoline

• Supervises the Illinois State Fair.

• Supervises the production of livestock

DOA Adopted Rules can be found here.

Department of Public Health

The Illinois Department of Public Health (IDPH) is responsible for preventing and controlling disease and injury, regulating medical practitioners, and promoting sanitation. The department is tasked with assuring that cultivators, processors, and dispensaries are conforming to cannabis safety regulations including implementing on-site inspections and handing out citations and fines for non-compliance in this area.

Furthermore, patients and caregivers must register with the state of Illinois via the Illinois Department of Public Health (IDPH). The agency also issues identification cards for patients and caregivers.

• IDPH laws and rules related to cannabis can be found here.

Illinois Cannabis Business Licensing

Requirements for prospective cannabis business owners are strict in Illinois. All applicants must undergo a background check. Applicants must also release full disclosure of past bankruptcies, defaults on student loans, and child support or alimony payments. They must also provide full tax returns for previous years.

Requirements for Illinois Cannabis Business Applications

Below is a partial list of the information that you’ll be required to provide along with your application and fees. Particular provisions might apply only to dispensaries or to cultivators.

• Fingerprint background check

• Full disclosure of past bankruptcies and loan defaults

• Child support and alimony payments

• Full tax returns for previous years

• Ownership structure including an organizational chart

• Articles of incorporation/organization

• Operating or partnership agreements

• Agreements relating to profit/loss sharing

• A complete disclosure of anyone with a direct or indirect interest in a cannabis business

• Operating plans

• Security plans

• Inventory and tracking plans

• Zoning of the proposed location

Additional information that can improve the chances of being awarded a permit:

• Certified woman- or minority-owned business

• Plans for environmentally friendly operations

• Plans for facilitating medical cannabis research

• Plans to positively impact your local community

• Plans to combat substance abuse

• Employee-friendly policies

Background Check Consent Forms

Background check consent forms (called “fingerprint content forms”) for the Department of Agriculture, Department of Financial and Professional Regulation, and Department of Public Health are available here:

• Department of Agriculture Fingerprint Consent Form

• Department of Financial and Professional Regulation Fingerprint Consent Form

• Department of Public Health Fingerprint Consent Form
  
  

Illinois Cultivation Center Applications and Licensing

The application window for cultivation center permits has closed. The Department will not accept any additional applications for cultivation center permits.

A single entity can own a maximum of 3 cultivation permits. Furthermore, an individual is prohibited from being an owner, partner, officer, director, shareholder, or member of more than 3 cultivation centers in the state.

• Application for License and Operations Approval

• Cultivation Center Application Instructions

• Suitability of the Proposed Facility

More Information on Cultivation

• Authorized Pesticide Active Ingredients

• Cultivation Center Laboratory Application Form

• Medical Cannabis Cultivation Center Product Registration

• SCHEDULE 8 Permit Modification Final Form

• Construction Approval Cover Final Form

• Waste Hauler Information Form

• Cultivation Center Surety Bond Production Form

Illinois Cannabis Dispensary Licensing and Applications

The state law has provisions for up to 60 dispensary licenses on the condition that there are sufficient qualified and geographically dispersed applicants.

Applicants must demonstrate that they have at least $400,000 in liquid assets and $50,000 in escrow in order to apply.

The first round of applications for cannabis dispensaries has ended.

Cannabis Dispensary Licensing and Applications Fees

• Non-refundable application fee: $5,000

• Permit fee for the first year: $30,000

• Annual permit renewal: $100,000

• Dispensary Registration Renewal Fee: $25,000

Dispensary Documentation and Forms

• Application for License and Operations Approval

• Dispensary Application Instructions

• Medical Cannabis Dispensary Registration Renewal Application

• Application for Proposed Principal Officer Medical Cannabis Dispensing Organization

• Proposed Principal Officer Criminal History Form

• Fingerprint Consent Form

• Out-of-State Fingerprint Consent Form

• Out-of-State Fingerprint Instructions

• Registration Form

• Request to Change Dispensary Location Form

• Dispensary Zoning Form

• Dispensary Documentation of Property Ownership Form

• Medical Cannabis Dispensary Registration Materials

• Principal Officer Attestation Form for Registration

• Dispensary Agent - Attestation Form

• Bond Form

• Application to classify records as confidential

• List of licensed dispensaries

• Resources & Publications

• Dispensing Organization Districts

• DFPR Licensed Livescan Vendor List

Cannabis Testing Laboratory Licensing and Applications

All cannabis products produced in Illinois must undergo laboratory testing to test cannabis for cannabinoid concentration and contaminants prior to entering the consumer market. Furthermore, all products are required to undergo in-house Quality Assurance testing.

Laboratories are licensed by the Illinois Department of Agriculture.

• Application for Laboratory Approval Form

Established medical laboratories and cultivation centers in the state of Illinois can use the application below to apply for a cannabis lab permit.  

• Application for Laboratory Approval to Handle, Test, or Analyze Medical Cannabis in Illinois

• Application for Cultivation Center to Approval to Handle, Test, or Analyze Medical Cannabis in Illinois

Illinois Seed-to-sale tracking system requirements

All cannabis operations in the state of Illinois are required to implement a seed-to-sale cannabis tracking system to monitor cultivation, testing, production, distribution, and sales. Furthermore, the state has chosen BioTrackTHC as its tracking platform.

Contacts:

If you have comments, suggestions or more detailed inquiries you can email these regulatory agencies:

• Department of Agriculture: agr.medicalcannabis@illinois.gov.

• Department of Public Health: DPH.MedicalCannabis@illinois.gov

• Department of Revenue: Rev.MCPP@illinois.gov

Additional Information:

Further information about the act and the roles of the Department of Public Health and the Department of Financial and Professional Regulation may be found at mcpp.illinois.gov .

An ongoing list of updates to the Illinois medical cannabis pilot program can be found here:

• Medical cannabis program updates

Town Hall Transcripts

For those unable to attend the three Town Hall meetings, the state has posted the transcripts of those three meetings.

• Collinsville Town Hall, 8/14/14

• Peoria Town Hall, 8/18/14

• Chicago Town Hall, 8/20/14

Further Reading

• JB Pritzker on Legalizing Marijuana

• VIDEO: JB Pritzker: "It's Time"

• Gov. Bruce Rauner signs bill legalizing industrial hemp

• Pot Topics: Rauner signs ‘Ashley’s Law;’ More cannabis jobs in Illinois

• Rauner OKs medical marijuana to replace opioids, passes on recreational pot

• NORML: Election Night: Gubernatorial Victories Bode Well For 2019 Statewide Reform Prospects

• These Two States Are Poised To Be The Next Big Marijuana Markets

• Steans seeks to mend budget woes by legalizing marijuana

• With Illinois medical pot market poised to expand, high-profile national chain is buying Oak Park dispensary

• Marijuana In The Governor's Mansion: Record Number Of Candidates Say Legalize It

Illinois Cannabis Laws and Regulations

Below are links to the actual rules and regulations that apply to the Illinois cannabis industry.

Definitions and terms used in connection with the medical cannabis pilot program act administered by the Illinois Department Of Financial and Professional Regulation can be found here:

• https://www.idfpr.com/MC/IDFPRMedicalCannabisNoticeofTerms2015.pdf

The following information pertaining to the rules and regulations has been provided by the General Assembly:

The General Assembly's Illinois Administrative Code database includes only those rulemakings that have been permanently adopted. This menu will point out the Sections on which an emergency rule (valid for a maximum of 150 days, usually until replaced by a permanent rulemaking) exists. The emergency rulemaking is linked through the notation that follows the Section heading in the menu.

Updating the database of the Illinois Compiled Statutes (ILCS) is an ongoing process. Recent laws may not yet be included in the ILCS database, but they are found on this site as Public Acts soon after they become law. For information concerning the relationship between statutes and Public Acts, refer to the Guide.

Because the statute database is maintained primarily for legislative drafting purposes, statutory changes are sometimes included in the statute database before they take effect. If the source note at the end of a Section of the statutes includes a Public Act that has not yet taken effect, the version of the law that is currently in effect may have already been removed from the database and you should refer to that Public Act to see the changes made to the current law.

SUBPART A: GENERAL PROVISIONS

• Section 1290.10 Definitions

EMERGENCY - portions of emergency amdendment (42 Ill. Reg. 23202) not specifically required by P.A. 100-1114 suspended at 42 Ill. Reg. 24277

SUBPART B: DISPENSING ORGANIZATION DISTRICTS

• Section 1290.20 Dispensing Organization Districts

SUBPART C: APPLICATION REQUIREMENTS FOR A MEDICAL CANNABIS DISPENSARY REGISTRATION AUTHORIZATION

• Section 1290.30 Dispensing Organization Principal Officers

• EMERGENCY - portions of emergency amdendment (42 Ill. Reg. 23202) not specifically required by P.A. 100-1114 suspended at 42 Ill. Reg. 24277Section 1290.40 Dispensing Organization Authorization Process

• EMERGENCY - portions of emergency amdendment (42 Ill. Reg. 23202) not specifically required by P.A. 100-1114 suspended at 42 Ill. Reg. 24277Section 1290.50 Dispensing Organization - Application Requirements for Authorization

• EMERGENCY - portions of emergency amdendment (42 Ill. Reg. 23202) not specifically required by P.A. 100-1114 suspended at 42 Ill. Reg. 24277Section 1290.60 Selection Process

• Section 1290.70 Selection Criteria

• EMERGENCY - portions of emergency amdendment (42 Ill. Reg. 23202) not specifically required by P.A. 100-1114 suspended at 42 Ill. Reg. 24277Section 1290.80 Fees

SUBPART D: DISPENSARY REGISTRATION

• Section 1290.100 Dispensing Organization - Registration Process

• EMERGENCY - portions of emergency amdendment (42 Ill. Reg. 23202) not specifically required by P.A. 100-1114 suspended at 42 Ill. Reg. 24277Section 1290.110 Dispensing Organization - Registration Requirements

• EMERGENCY - portions of emergency amdendment (42 Ill. Reg. 23202) not specifically required by P.A. 100-1114 suspended at 42 Ill. Reg. 24277Section 1290.120 Dispensing Organization - Registration Bond

• EMERGENCY - portions of emergency amdendment (42 Ill. Reg. 23202) not specifically required by P.A. 100-1114 suspended at 42 Ill. Reg. 24277Section 1290.130 Changes to a Dispensing Organization Registration

• Section 1290.140 Request to Relocate a Dispensary

• EMERGENCY - portions of emergency amdendment (42 Ill. Reg. 23202) not specifically required by P.A. 100-1114 suspended at 42 Ill. Reg. 24277Section 1290.150 Dispensing Organization Renewals

SUBPART E: REGISTRATION OF DISPENSING ORGANIZATION AGENTS

• Section 1290.200 Dispensing Organization Agent-in-Charge

• EMERGENCY - portions of emergency amdendment (42 Ill. Reg. 23202) not specifically required by P.A. 100-1114 suspended at 42 Ill. Reg. 24277Section 1290.210 Dispensing Organization Agents

• EMERGENCY - portions of emergency amdendment (42 Ill. Reg. 23202) not specifically required by P.A. 100-1114 suspended at 42 Ill. Reg. 24277Section 1290.220 Persons with Significant Influence or Control; Disassociation

• Section 1290.230 State and Federal Criminal History Records Check

EMERGENCY - portions of emergency amdendment (42 Ill. Reg. 23202) not specifically required by P.A. 100-1114 suspended at 42 Ill. Reg. 24277

SUBPART F: DISPENSARY OPERATION

• Section 1290.300 Operational Requirements

EMERGENCY - portions of emergency amdendment (42 Ill. Reg. 23202) not specifically required by P.A. 100-1114 suspended at 42 Ill. Reg. 24277

SUBPART G: SECURITY AND RECORDKEEPING

• NEW SECTION - Dispensing Access Overnight EMERGENCY - portions of emergency amdendment (42 Ill. Reg. 23202) not specifically required by P.A. 100-1114 suspended at 42 Ill. Reg. 24277

• Section 1290.400 Inventory Control System

• EMERGENCY - portions of emergency amdendment (42 Ill. Reg. 23202) not specifically required by P.A. 100-1114 suspended at 42 Ill. Reg. 24277Section 1290.405 Storage Requirements

• EMERGENCY - portions of emergency amdendment (42 Ill. Reg. 23202) not specifically required by P.A. 100-1114 suspended at 42 Ill. Reg. 24277Section 1290.410 Security Requirements

• EMERGENCY - portions of emergency amdendment (42 Ill. Reg. 23202) not specifically required by P.A. 100-1114 suspended at 42 Ill. Reg. 24277Section 1290.415 Recordkeeping

• EMERGENCY - portions of emergency amdendment (42 Ill. Reg. 23202) not specifically required by P.A. 100-1114 suspended at 42 Ill. Reg. 24277Section 1290.420 Cleaning and Sanitation

• EMERGENCY - portions of emergency amdendment (42 Ill. Reg. 23202) not specifically required by P.A. 100-1114 suspended at 42 Ill. Reg. 24277Section 1290.425 Administration

• EMERGENCY - portions of emergency amdendment (42 Ill. Reg. 23202) not specifically required by P.A. 100-1114 suspended at 42 Ill. Reg. 24277Section 1290.430 Dispensing Medical Cannabis

• NEW SECTION - Dispensing Medical Cannabis to Opioid Alternative Pilot Program Participants EMERGENCY - portions of emergency amdendment (42 Ill. Reg. 23202) not specifically required by P.A. 100-1114 suspended at 42 Ill. Reg. 24277

• Section 1290.435 Signage

• EMERGENCY - portions of emergency amdendment (42 Ill. Reg. 23202) not specifically required by P.A. 100-1114 suspended at 42 Ill. Reg. 24277Section 1290.440 Recall of Medical Cannabis

• EMERGENCY - portions of emergency amdendment (42 Ill. Reg. 23202) not specifically required by P.A. 100-1114 suspended at 42 Ill. Reg. 24277Section 1290.445 Report of Loss or Theft of Cannabis

• EMERGENCY - portions of emergency amdendment (42 Ill. Reg. 23202) not specifically required by P.A. 100-1114 suspended at 42 Ill. Reg. 24277Section 1290.450 Destruction and Disposal

• EMERGENCY - portions of emergency amdendment (42 Ill. Reg. 23202) not specifically required by P.A. 100-1114 suspended at 42 Ill. Reg. 24277Section 1290.455 Dispensary Advertisements

• Section 1290.460 Closure of a Dispensary

• Section 1290.465 Zoning Rules Related to Dispensary

SUBPART H: DISCIPLINE

• Section 1290.500 Investigations

• EMERGENCY - portions of emergency amdendment (42 Ill. Reg. 23202) not specifically required by P.A. 100-1114 suspended at 42 Ill. Reg. 24277Section 1290.510 Grounds for Discipline

• EMERGENCY - portions of emergency amdendment (42 Ill. Reg. 23202) not specifically required by P.A. 100-1114 suspended at 42 Ill. Reg. 24277Section 1290.520 Temporary Suspension

• Section 1290.530 Consent to Administrative Supervision Order

• Section 1290.540 Subpoenas; Oaths; Attendance of Witnesses

• EMERGENCY - portions of emergency amdendment (42 Ill. Reg. 23202) not specifically required by P.A. 100-1114 suspended at 42 Ill. Reg. 24277Section 1290.550 Request for Hearing

• EMERGENCY - portions of emergency amdendment (42 Ill. Reg. 23202) not specifically required by P.A. 100-1114 suspended at 42 Ill. Reg. 24277Section 1290.560 Findings and Recommendations

• Section 1290.570 Restoration of Registration from Discipline

• Section 1290.575 Appointment of a Hearing Officer

• Section 1290.580 Transcript; Record of Proceedings

• Section 1290.590 Certification of Record; Receipt

SUBPART I: GENERAL

• Section 1290.600 Intergovernmental Cooperation

• Section 1290.610 Variances

• Section 1290.620 Administrative Decisions