HB3503 102ND GENERAL ASSEMBLY

LRB102 13959 CPF 19311 b

102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB3503

Introduced 2/22/2021, by Rep. Sonya M. Harper

SYNOPSIS AS INTRODUCED:

410 ILCS 705/5-45
410 ILCS 705/7-30
410 ILCS 705/15-25
410 ILCS 705/15-35
410 ILCS 705/20-5
410 ILCS 705/25-40
410 ILCS 705/30-5
410 ILCS 705/35-5
410 ILCS 705/35-31

Amends the Cannabis Regulation and Tax Act. Removes references to the Illinois Cannabis Regulation Oversight Officer and replaces them with references to the Office of Cannabis Regulation and Oversight. Makes conforming changes throughout the Act. Removes language providing that the Illinois Cannabis Regulation Oversight Officer is within the Department of Financial and Professional Regulation under the Secretary of Financial and Professional Regulation. Provides that the Director of the Office of Cannabis Regulation and Oversight shall be appointed by the Governor with the advice and consent of the Senate. Transfers all powers, duties, rights, responsibilities, personnel, and property of the Illinois Cannabis Regulation Oversight Officer to the Office of Cannabis Regulation and Oversight.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning regulation.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Cannabis Regulation and Tax Act is amended by changing Sections 5-45, 7-30, 15-25, 15-35, 20-5, 25-40, 30-5, 35-5, and 35-31 as follows:

(410 ILCS 705/5-45)

Sec. 5-45. Office of Cannabis Regulation and Oversight Illinois Cannabis Regulation Oversight Officer.

(a) The Office of Cannabis Regulation and Oversight position of Illinois Cannabis Regulation Oversight Officer is created within the Department of Financial and Professional Regulation under the Secretary of Financial and Professional Regulation. The Director of the Office of Cannabis Regulation and Oversight Illinois Cannabis Regulation Oversight Officer shall be appointed by the Governor with the advice and consent of the Senate. The term of office of the Director Officer shall expire on the third Monday of January in odd-numbered years provided that he or she shall hold office until a successor is appointed and qualified. In case of vacancy in office during the recess of the Senate, the Governor shall make a temporary appointment until the next meeting of the Senate, when the Governor shall nominate some person to fill the office, and any person so nominated who is confirmed by the Senate shall hold office during the remainder of the term and until his or her successor is appointed and qualified.

(b) Subject to appropriation, the Office of Cannabis Regulation and Oversight The Illinois Cannabis Regulation Oversight Officer may:

(1) maintain a staff;

(2) make recommendations for policy, statute, and rule changes;

(3) collect data both in Illinois and outside Illinois regarding the regulation of cannabis;

(4) compile or assist in the compilation of any reports required by this Act;

(5) ensure the coordination of efforts between various State agencies involved in regulating and taxing the sale of cannabis in Illinois; and

(6) encourage, promote, suggest, and report best practices for ensuring diversity in the cannabis industry in Illinois.

(c) The Office of Cannabis Regulation and Oversight Illinois Cannabis Regulation Oversight Officer shall not:

(1) participate in the issuance of any business licensing or the making of awards; or

(2) participate in any adjudicative decision-making process involving licensing or licensee discipline.

(d) Any funding required for the Office of Cannabis Regulation and Oversight Illinois Cannabis Regulation Oversight Officer, its staff, or its activities shall be drawn from the Cannabis Regulation Fund.

(e) The Illinois Cannabis Regulation Oversight Officer created under Public Act 101-27 shall commission and publish a disparity and availability study by March 1, 2021 that: (1) evaluates whether there exists discrimination in the State's cannabis industry; and (2) if so, evaluates the impact of such discrimination on the State and includes recommendations to the Department of Financial and Professional Regulation and the Department of Agriculture for reducing or eliminating any identified barriers to entry in the cannabis market. The Illinois Cannabis Regulation Oversight Officer shall forward a copy of its findings and recommendations to the Department of Financial and Professional Regulation, the Department of Agriculture, the Department of Commerce and Economic Opportunity, the General Assembly, and the Governor. The Office of Cannabis Regulation and Oversight shall carry out any duties that remain under this subsection on the effective date of this amendatory Act of the 102nd General Assembly.

(f) The Office of Cannabis Regulation and Oversight Illinois Cannabis Regulation Oversight Officer may compile, collect, or otherwise gather data necessary for the administration of this Act and to carry out the Officer's duty relating to the recommendation of policy changes. The Office of Cannabis Regulation and Oversight Illinois Cannabis Regulation Oversight Officer may direct the Department of Agriculture, Department of Financial and Professional Regulation, Department of Public Health, Department of Human Services, and Department of Commerce and Economic Opportunity to assist in the compilation, collection, and data gathering authorized pursuant to this subsection. The Office of Cannabis Regulation and Oversight Illinois Cannabis Regulation Oversight Officer shall compile all of the data into a single report and submit the report to the Governor and the General Assembly and publish the report on its website.

(g) On the effective date of this amendatory Act of the 102nd General Assembly, all powers, duties, rights, and responsibilities of the Illinois Cannabis Regulation Oversight Officer within the Department of Financial and Professional Regulation are transferred to the Office of Cannabis Regulation and Oversight. The personnel of the Illinois Cannabis Regulation Oversight Officer are transferred to the Office of Cannabis Regulation and Oversight. The status and rights of such personnel under the Personnel Code are not affected by the transfer. The rights of the employees and the State of Illinois and its agencies under the Personnel Code and applicable collective bargaining agreements or under any pension, retirement, or annuity plan are not affected by this amendatory Act of the 102nd General Assembly. All books, records, papers, documents, property (real and personal), contracts, causes of action, and pending business pertaining to the powers, duties, rights, and responsibilities transferred by this amendatory Act of the 102nd General Assembly from the Illinois Cannabis Regulation Oversight Officer to the Office of Cannabis Regulation and Oversight, including, but not limited to, material in electronic or magnetic format and necessary computer hardware and software, are transferred to the Office of Cannabis Regulation and Oversight. The powers, duties, rights, and responsibilities relating to the Illinois Cannabis Regulation Oversight Officer transferred by this amendatory Act of the 102nd General Assembly are vested in the Office of Cannabis Regulation and Oversight. Whenever reports or notices are required to be made or given or papers or documents furnished or served by any person to or upon the Illinois Cannabis Regulation Oversight Officer in connection with any of the powers, duties, rights, and responsibilities transferred by this amendatory Act of the 102nd General Assembly, the Office of Cannabis Regulation and Oversight shall make, give, furnish, or serve them. This amendatory Act of the 102nd General Assembly does not affect any act done, ratified, or canceled, any right occurring or established, or any action or proceeding had or commenced in an administrative, civil, or criminal cause by the Illinois Cannabis Regulation Oversight Officer before the effective date of this amendatory Act of the 102nd General Assembly. Such actions or proceedings may be prosecuted and continued by the Office of Cannabis Regulation and Oversight. Any rules that relate to the powers, duties, rights, and responsibilities of the Illinois Cannabis Regulation Oversight Officer and are in force on the effective date of this amendatory Act of the 102nd General Assembly become the rules of the Office of Cannabis Regulation and Oversight. This amendatory Act of the 102nd General Assembly does not affect the legality of any such rules. Any proposed rules filed with the Secretary of State by the Department of Financial and Professional Regulation that are pending in the rulemaking process on the effective date of this amendatory Act of the 102nd General Assembly and pertain to the transferred powers, duties, rights, and responsibilities are deemed to have been filed by the Office of Cannabis Regulation and Oversight. As soon as practicable, the Office of Cannabis Regulation and Oversight shall revise and clarify the rules transferred to it under this amendatory Act of the 102nd General Assembly to reflect the reorganization of powers, duties, rights, and responsibilities affected by this amendatory Act of the 102nd General Assembly, using the procedures for recodification of rules available under the Illinois Administrative Procedure Act, except that existing title, part, and section numbering for the affected rules may be retained. The Office of Cannabis Regulation and Oversight may propose and adopt under the Illinois Administrative Procedure Act other rules of the Department of Financial and Professional Regulation pertaining to this amendatory Act of the 102nd General Assembly that are administered by the Office of Cannabis Regulation and Oversight.

(Source: P.A. 101-27, eff. 6-25-19.)

(410 ILCS 705/7-30)

Sec. 7-30. Reporting. By January 1, 2021, and on January 1 of every year thereafter, or upon request by the Office of Cannabis Regulation and Oversight Illinois Cannabis Regulation Oversight Officer, each cannabis business establishment licensed under this Act shall report to the Office of Cannabis Regulation and Oversight Illinois Cannabis Regulation Oversight Officer, on a form to be provided by the Office of Cannabis Regulation and Oversight Illinois Cannabis Regulation Oversight Officer, information that will allow it to assess the extent of diversity in the medical and adult use cannabis industry and methods for reducing or eliminating any identified barriers to entry, including access to capital. The information to be collected shall be designed to identify the following:

(1) the number and percentage of licenses provided to Social Equity Applicants and to businesses owned by minorities, women, veterans, and people with disabilities;

(2) the total number and percentage of employees in the cannabis industry who meet the criteria in (3)(i) or (3)(ii) in the definition of Social Equity Applicant or who are minorities, women, veterans, or people with disabilities;

(3) the total number and percentage of contractors and subcontractors in the cannabis industry that meet the definition of a Social Equity Applicant or who are owned by minorities, women, veterans, or people with disabilities, if known to the cannabis business establishment; and

(4) recommendations on reducing or eliminating any identified barriers to entry, including access to capital, in the cannabis industry.

(Source: P.A. 101-27, eff. 6-25-19.)

(410 ILCS 705/15-25)

Sec. 15-25. Awarding of Conditional Adult Use Dispensing Organization Licenses prior to January 1, 2021.

(a) The Department shall issue up to 75 Conditional Adult Use Dispensing Organization Licenses before May 1, 2020.

(b) The Department shall make the application for a Conditional Adult Use Dispensing Organization License available no later than October 1, 2019 and shall accept applications no later than January 1, 2020.

(c) To ensure the geographic dispersion of Conditional Adult Use Dispensing Organization License holders, the following number of licenses shall be awarded in each BLS Region as determined by each region's percentage of the State's population:

(1) Bloomington: 1

(2) Cape Girardeau: 1

(3) Carbondale-Marion: 1

(4) Champaign-Urbana: 1

(5) Chicago-Naperville-Elgin: 47

(6) Danville: 1

(7) Davenport-Moline-Rock Island: 1

(8) Decatur: 1

(9) Kankakee: 1

(10) Peoria: 3

(11) Rockford: 2

(12) St. Louis: 4

(13) Springfield: 1

(14) Northwest Illinois nonmetropolitan: 3

(15) West Central Illinois nonmetropolitan: 3

(16) East Central Illinois nonmetropolitan: 2

(17) South Illinois nonmetropolitan: 2

(d) An applicant seeking issuance of a Conditional Adult Use Dispensing Organization License shall submit an application on forms provided by the Department. An applicant must meet the following requirements:

(1) Payment of a nonrefundable application fee of $5,000 for each license for which the applicant is applying, which shall be deposited into the Cannabis Regulation Fund;

(2) Certification that the applicant will comply with the requirements contained in this Act;

(3) The legal name of the proposed dispensing organization;

(4) A statement that the dispensing organization agrees to respond to the Department's supplemental requests for information;

(5) From each principal officer, a statement indicating whether that person:

(A) has previously held or currently holds an ownership interest in a cannabis business establishment in Illinois; or

(B) has held an ownership interest in a dispensing organization or its equivalent in another state or territory of the United States that had the dispensing organization registration or license suspended, revoked, placed on probationary status, or subjected to other disciplinary action;

(6) Disclosure of whether any principal officer has ever filed for bankruptcy or defaulted on spousal support or child support obligation;

(7) A resume for each principal officer, including whether that person has an academic degree, certification, or relevant experience with a cannabis business establishment or in a related industry;

(8) A description of the training and education that will be provided to dispensing organization agents;

(9) A copy of the proposed operating bylaws;

(10) A copy of the proposed business plan that complies with the requirements in this Act, including, at a minimum, the following:

(A) A description of services to be offered; and

(B) A description of the process of dispensing cannabis;

(11) A copy of the proposed security plan that complies with the requirements in this Article, including:

(A) The process or controls that will be implemented to monitor the dispensary, secure the premises, agents, and currency, and prevent the diversion, theft, or loss of cannabis; and

(B) The process to ensure that access to the restricted access areas is restricted to, registered agents, service professionals, transporting organization agents, Department inspectors, and security personnel;

(12) A proposed inventory control plan that complies with this Section;

(13) A proposed floor plan, a square footage estimate, and a description of proposed security devices, including, without limitation, cameras, motion detectors, servers, video storage capabilities, and alarm service providers;

(14) The name, address, social security number, and date of birth of each principal officer and board member of the dispensing organization; each of those individuals shall be at least 21 years of age;

(15) Evidence of the applicant's status as a Social Equity Applicant, if applicable, and whether a Social Equity Applicant plans to apply for a loan or grant issued by the Department of Commerce and Economic Opportunity;

(16) The address, telephone number, and email address of the applicant's principal place of business, if applicable. A post office box is not permitted;

(17) Written summaries of any information regarding instances in which a business or not-for-profit that a prospective board member previously managed or served on were fined or censured, or any instances in which a business or not-for-profit that a prospective board member previously managed or served on had its registration suspended or revoked in any administrative or judicial proceeding;

(18) A plan for community engagement;

(19) Procedures to ensure accurate recordkeeping and security measures that are in accordance with this Article and Department rules;

(20) The estimated volume of cannabis it plans to store at the dispensary;

(21) A description of the features that will provide accessibility to purchasers as required by the Americans with Disabilities Act;

(22) A detailed description of air treatment systems that will be installed to reduce odors;

(23) A reasonable assurance that the issuance of a license will not have a detrimental impact on the community in which the applicant wishes to locate;

(24) The dated signature of each principal officer;

(25) A description of the enclosed, locked facility where cannabis will be stored by the dispensing organization;

(26) Signed statements from each dispensing organization agent stating that he or she will not divert cannabis;

(27) The number of licenses it is applying for in each BLS Region;

(28) A diversity plan that includes a narrative of at least 2,500 words that establishes a goal of diversity in ownership, management, employment, and contracting to ensure that diverse participants and groups are afforded equality of opportunity;

(29) A contract with a private security contractor that is licensed under Section 10-5 of the Private Detective, Private Alarm, Private Security, Fingerprint Vendor, and Locksmith Act of 2004 in order for the dispensary to have adequate security at its facility; and

(30) Other information deemed necessary by the Illinois Cannabis Regulation Oversight Officer to conduct the disparity and availability study referenced in subsection (e) of Section 5-45.

(e) An applicant who receives a Conditional Adult Use Dispensing Organization License under this Section has 180 days from the date of award to identify a physical location for the dispensing organization retail storefront. Before a conditional licensee receives an authorization to build out the dispensing organization from the Department, the Department shall inspect the physical space selected by the conditional licensee. The Department shall verify the site is suitable for public access, the layout promotes the safe dispensing of cannabis, the location is sufficient in size, power allocation, lighting, parking, handicapped accessible parking spaces, accessible entry and exits as required by the Americans with Disabilities Act, product handling, and storage. The applicant shall also provide a statement of reasonable assurance that the issuance of a license will not have a detrimental impact on the community. The applicant shall also provide evidence that the location is not within 1,500 feet of an existing dispensing organization. If an applicant is unable to find a suitable physical address in the opinion of the Department within 180 days of the issuance of the Conditional Adult Use Dispensing Organization License, the Department may extend the period for finding a physical address another 180 days if the Conditional Adult Use Dispensing Organization License holder demonstrates concrete attempts to secure a location and a hardship. If the Department denies the extension or the Conditional Adult Use Dispensing Organization License holder is unable to find a location or become operational within 360 days of being awarded a conditional license, the Department shall rescind the conditional license and award it to the next highest scoring applicant in the BLS Region for which the license was assigned, provided the applicant receiving the license: (i) confirms a continued interest in operating a dispensing organization; (ii) can provide evidence that the applicant continues to meet all requirements for holding a Conditional Adult Use Dispensing Organization License set forth in this Act; and (iii) has not otherwise become ineligible to be awarded a dispensing organization license. If the new awardee is unable to accept the Conditional Adult Use Dispensing Organization License, the Department shall award the Conditional Adult Use Dispensing Organization License to the next highest scoring applicant in the same manner. The new awardee shall be subject to the same required deadlines as provided in this subsection.

(e-5) If, within 180 days of being awarded a Conditional Adult Use Dispensing Organization License, a dispensing organization is unable to find a location within the BLS Region in which it was awarded a Conditional Adult Use Dispensing Organization License because no jurisdiction within the BLS Region allows for the operation of an Adult Use Dispensing Organization, the Department of Financial and Professional Regulation may authorize the Conditional Adult Use Dispensing Organization License holder to transfer its license to a BLS Region specified by the Department.

(f) A dispensing organization that is awarded a Conditional Adult Use Dispensing Organization License pursuant to the criteria in Section 15-30 shall not purchase, possess, sell, or dispense cannabis or cannabis-infused products until the person has received an Adult Use Dispensing Organization License issued by the Department pursuant to Section 15-36 of this Act.

(g) The Department shall conduct a background check of the prospective organization agents in order to carry out this Article. The Department of State Police shall charge the applicant a fee for conducting the criminal history record check, which shall be deposited into the State Police Services Fund and shall not exceed the actual cost of the record check. Each person applying as a dispensing organization agent shall submit a full set of fingerprints to the Department of State Police for the purpose of obtaining a State and federal criminal records check. These fingerprints shall be checked against the fingerprint records now and hereafter, to the extent allowed by law, filed in the Department of State Police and Federal Bureau of Identification criminal history records databases. The Department of State Police shall furnish, following positive identification, all Illinois conviction information to the Department.

(Source: P.A. 101-27, eff. 6-25-19; 101-593, eff. 12-4-19.)

(410 ILCS 705/15-35)

Sec. 15-35. Conditional Adult Use Dispensing Organization License after January 1, 2021.

(a) In addition to any of the licenses issued in Sections 15-15, Section 15-20, or Section 15-25 of this Act, by December 21, 2021, the Department shall issue up to 110 Conditional Adult Use Dispensing Organization Licenses, pursuant to the application process adopted under this Section. Prior to issuing such licenses, the Department may adopt rules through emergency rulemaking in accordance with subsection (gg) of Section 5-45 of the Illinois Administrative Procedure Act. The General Assembly finds that the adoption of rules to regulate cannabis use is deemed an emergency and necessary for the public interest, safety, and welfare. Such rules may:

(1) Modify or change the BLS Regions as they apply to this Article or modify or raise the number of Adult Conditional Use Dispensing Organization Licenses assigned to each region based on the following factors:

(A) Purchaser wait times;

(B) Travel time to the nearest dispensary for potential purchasers;

(C) Percentage of cannabis sales occurring in Illinois not in the regulated market using data from the Substance Abuse and Mental Health Services Administration, National Survey on Drug Use and Health, Illinois Behavioral Risk Factor Surveillance System, and tourism data from the Illinois Office of Tourism to ascertain total cannabis consumption in Illinois compared to the amount of sales in licensed dispensing organizations;

(D) Whether there is an adequate supply of cannabis and cannabis-infused products to serve registered medical cannabis patients;

(E) Population increases or shifts;

(F) Density of dispensing organizations in a region;

(G) The Department's capacity to appropriately regulate additional licenses;

(H) The findings and recommendations from the disparity and availability study commissioned under by the Illinois Cannabis Regulation Oversight Officer in subsection (e) of Section 5-45 to reduce or eliminate any identified barriers to entry in the cannabis industry; and

(I) Any other criteria the Department deems relevant.

(2) Modify or change the licensing application process to reduce or eliminate the barriers identified in the disparity and availability study commissioned under subsection (e) of Section 5-45 by the Illinois Cannabis Regulation Oversight Officer and make modifications to remedy evidence of discrimination.

(b) After January 1, 2022, the Department may by rule modify or raise the number of Adult Use Dispensing Organization Licenses assigned to each region, and modify or change the licensing application process to reduce or eliminate barriers based on the criteria in subsection (a). At no time shall the Department issue more than 500 Adult Use Dispensing Organization Licenses.

(Source: P.A. 101-27, eff. 6-25-19; 101-593, eff. 12-4-19.)

(410 ILCS 705/20-5)

Sec. 20-5. Issuance of licenses. On or after July 1, 2021, the Department of Agriculture by rule may:

(1) Modify or change the number of cultivation center licenses available, which shall at no time exceed 30 cultivation center licenses. In determining whether to exercise the authority granted by this subsection, the Department of Agriculture must consider the following factors:

(A) The percentage of cannabis sales occurring in Illinois not in the regulated market using data from the Substance Abuse and Mental Health Services Administration, National Survey on Drug Use and Health, Illinois Behavioral Risk Factor Surveillance System, and tourism data from the Illinois Office of Tourism to ascertain total cannabis consumption in Illinois compared to the amount of sales in licensed dispensing organizations;

(B) Whether there is an adequate supply of cannabis and cannabis-infused products to serve registered medical cannabis patients;

(C) Whether there is an adequate supply of cannabis and cannabis-infused products to serve purchasers;

(D) Whether there is an oversupply of cannabis in Illinois leading to trafficking of cannabis to any other state;

(E) Population increases or shifts;

(F) Changes to federal law;

(G) Perceived security risks of increasing the number or location of cultivation centers;

(H) The past security records of cultivation centers;

(I) The Department of Agriculture's capacity to appropriately regulate additional licensees;

(J) The findings and recommendations from the disparity and availability study commissioned under by the Illinois Cannabis Regulation Oversight Officer referenced in subsection (e) of Section 5-45 to reduce or eliminate any identified barriers to entry in the cannabis industry; and

(K) Any other criteria the Department of Agriculture deems relevant.

(2) Modify or change the licensing application process to reduce or eliminate the barriers identified in the disparity and availability study commissioned under subsection (e) of Section 5-45 commission by the Illinois Cannabis Regulation Oversight Officer and shall make modifications to remedy evidence of discrimination.

(Source: P.A. 101-27, eff. 6-25-19.)

(410 ILCS 705/25-40)

(Section scheduled to be repealed on July 1, 2026)

Sec. 25-40. Study. By December 31, 2025, the Office of Cannabis Regulation and Oversight Illinois Cannabis Regulation Oversight Officer, in coordination with the Board, must issue a report to the Governor and the General Assembly which includes, but is not limited to, the following:

(1) Number of security incidents or infractions at each licensee and any action taken or not taken;

(2) Statistics, based on race, ethnicity, gender, and participating community college of:

(A) students enrolled in career in cannabis classes;

(B) successful completion rates by community college students for the Certificate;

(C) postgraduate job placement of students who obtained a Certificate, including both cannabis business establishment jobs and non-cannabis business establishment jobs; and

(3) Any other relevant information.

(Source: P.A. 101-27, eff. 6-25-19.)

(410 ILCS 705/30-5)

Sec. 30-5. Issuance of licenses.

(a) The Department of Agriculture shall issue up to 40 craft grower licenses by July 1, 2020. Any person or entity awarded a license pursuant to this subsection shall only hold one craft grower license and may not sell that license until after December 21, 2021.

(b) By December 21, 2021, the Department of Agriculture shall issue up to 60 additional craft grower licenses. Any person or entity awarded a license pursuant to this subsection shall not hold more than 2 craft grower licenses. The person or entity awarded a license pursuant to this subsection or subsection (a) of this Section may sell its craft grower license subject to the restrictions of this Act or as determined by administrative rule. Prior to issuing such licenses, the Department may adopt rules through emergency rulemaking in accordance with subsection (gg) of Section 5-45 of the Illinois Administrative Procedure Act, to modify or raise the number of craft grower licenses and modify or change the licensing application process to reduce or eliminate barriers. The General Assembly finds that the adoption of rules to regulate cannabis use is deemed an emergency and necessary for the public interest, safety, and welfare. In determining whether to exercise the authority granted by this subsection, the Department of Agriculture must consider the following factors:

(1) the percentage of cannabis sales occurring in Illinois not in the regulated market using data from the Substance Abuse and Mental Health Services Administration, National Survey on Drug Use and Health, Illinois Behavioral Risk Factor Surveillance System, and tourism data from the Illinois Office of Tourism to ascertain total cannabis consumption in Illinois compared to the amount of sales in licensed dispensing organizations;

(2) whether there is an adequate supply of cannabis and cannabis-infused products to serve registered medical cannabis patients;

(3) whether there is an adequate supply of cannabis and cannabis-infused products to serve purchasers;

(4) whether there is an oversupply of cannabis in Illinois leading to trafficking of cannabis to states where the sale of cannabis is not permitted by law;

(5) population increases or shifts;

(6) the density of craft growers in any area of the State;

(7) perceived security risks of increasing the number or location of craft growers;

(8) the past safety record of craft growers;

(9) the Department of Agriculture's capacity to appropriately regulate additional licensees;

(10) the findings and recommendations from the disparity and availability study commissioned under subsection (e) of Section 5-45 by the Illinois Cannabis Regulation Oversight Officer to reduce or eliminate any identified barriers to entry in the cannabis industry; and

(11) any other criteria the Department of Agriculture deems relevant.

(c) After January 1, 2022, the Department of Agriculture may by rule modify or raise the number of craft grower licenses and modify or change the licensing application process to reduce or eliminate barriers based on the criteria in subsection (b). At no time may the number of craft grower licenses exceed 150. Any person or entity awarded a license pursuant to this subsection shall not hold more than 3 craft grower licenses. A person or entity awarded a license pursuant to this subsection or subsection (a) or subsection (b) of this Section may sell its craft grower license or licenses subject to the restrictions of this Act or as determined by administrative rule.

(Source: P.A. 101-27, eff. 6-25-19; 101-593, eff. 12-4-19.)

(410 ILCS 705/35-5)

Sec. 35-5. Issuance of licenses.

(a) The Department of Agriculture shall issue up to 40 infuser licenses through a process provided for in this Article no later than July 1, 2020.

(b) The Department of Agriculture shall make the application for infuser licenses available on January 7, 2020, or if that date falls on a weekend or holiday, the business day immediately succeeding the weekend or holiday and every January 7 or succeeding business day thereafter, and shall receive such applications no later than March 15, 2020, or, if that date falls on a weekend or holiday, the business day immediately succeeding the weekend or holiday and every March 15 or succeeding business day thereafter.

(c) By December 21, 2021, the Department of Agriculture may issue up to 60 additional infuser licenses. Prior to issuing such licenses, the Department may adopt rules through emergency rulemaking in accordance with subsection (gg) of Section 5-45 of the Illinois Administrative Procedure Act, to modify or raise the number of infuser licenses and modify or change the licensing application process to reduce or eliminate barriers. The General Assembly finds that the adoption of rules to regulate cannabis use is deemed an emergency and necessary for the public interest, safety, and welfare.

In determining whether to exercise the authority granted by this subsection, the Department of Agriculture must consider the following factors:

(1) the percentage of cannabis sales occurring in Illinois not in the regulated market using data from the Substance Abuse and Mental Health Services Administration, National Survey on Drug Use and Health, Illinois Behavioral Risk Factor Surveillance System, and tourism data from the Illinois Office of Tourism to ascertain total cannabis consumption in Illinois compared to the amount of sales in licensed dispensing organizations;

(2) whether there is an adequate supply of cannabis and cannabis-infused products to serve registered medical cannabis patients;

(3) whether there is an adequate supply of cannabis and cannabis-infused products to serve purchasers;

(4) whether there is an oversupply of cannabis in Illinois leading to trafficking of cannabis to any other state;

(5) population increases or shifts;

(6) changes to federal law;

(7) perceived security risks of increasing the number or location of infuser organizations;

(8) the past security records of infuser organizations;

(9) the Department of Agriculture's capacity to appropriately regulate additional licenses;

(10) the findings and recommendations from the disparity and availability study commissioned under subsection (e) of Section 5-45 by the Illinois Cannabis Regulation Oversight Officer to reduce or eliminate any identified barriers to entry in the cannabis industry; and

(11) any other criteria the Department of Agriculture deems relevant.

(d) After January 1, 2022, the Department of Agriculture may by rule modify or raise the number of infuser licenses, and modify or change the licensing application process to reduce or eliminate barriers based on the criteria in subsection (c).

(Source: P.A. 101-27, eff. 6-25-19; 101-593, eff. 12-4-19.)

(410 ILCS 705/35-31)

Sec. 35-31. Ensuring an adequate supply of raw materials to serve infusers.

(a) As used in this Section, "raw materials" includes, but is not limited to, CO₂ hash oil, "crude", "distillate", or any other cannabis concentrate extracted from cannabis flower by use of a solvent or a mechanical process.

(b) The Department of Agriculture may by rule design a method for assessing whether licensed infusers have access to an adequate supply of reasonably affordable raw materials, which may include but not be limited to: (i) a survey of infusers; (ii) a market study on the sales trends of cannabis-infused products manufactured by infusers; and (iii) the costs cultivation centers and craft growers assume for the raw materials they use in any cannabis-infused products they manufacture.

(c) The Department of Agriculture shall perform an assessment of whether infusers have access to an adequate supply of reasonably affordable raw materials that shall start no sooner than January 1, 2022 and shall conclude no later than April 1, 2022. The Department of Agriculture may rely on data from the Office of Cannabis Regulation and Oversight Illinois Cannabis Regulation Oversight Officer as part of this assessment.

(d) The Department of Agriculture shall perform an assessment of whether infusers have access to an adequate supply of reasonably affordable raw materials that shall start no sooner than January 1, 2023 and shall conclude no later than April 1, 2023. The Department of Agriculture may rely on data from the Office of Cannabis Regulation and Oversight Cannabis Regulation Oversight Officer as part of this assessment.

(e) The Department of Agriculture may by rule adopt measures to ensure infusers have access to an adequate supply of reasonably affordable raw materials necessary for the manufacture of cannabis-infused products. Such measures may include, but not be limited to (i) requiring cultivation centers and craft growers to set aside a minimum amount of raw materials for the wholesale market or (ii) enabling infusers to apply for a processor license to extract raw materials from cannabis flower.

(f) If the Department of Agriculture determines processor licenses may be available to infuser organizations based upon findings made pursuant to subsection (e), infuser organizations may submit to the Department of Agriculture on forms provided by the Department of Agriculture the following information as part of an application to receive a processor license:

(1) experience with the extraction, processing, or infusing of oils similar to those derived from cannabis, or other business practices to be performed by the infuser;

(2) a description of the applicant's experience with manufacturing equipment and chemicals to be used in processing;

(3) expertise in relevant scientific fields;

(4) a commitment that any cannabis waste, liquid waste, or hazardous waste shall be disposed of in accordance with 8 Ill. Adm. Code 1000.460, except, to the greatest extent feasible, all cannabis plant waste will be rendered unusable by grinding and incorporating the cannabis plant waste with compostable mixed waste to be disposed of in accordance with Ill. Adm. Code 1000.460(g)(1); and

(5) any other information the Department of Agriculture deems relevant.

(g) The Department of Agriculture may only issue an infuser organization a processor license if, based on the information pursuant to subsection (f) and any other criteria set by the Department of Agriculture, which may include but not be limited an inspection of the site where processing would occur, the Department of Agriculture is reasonably certain the infuser organization will process cannabis in a safe and compliant manner.

(Source: P.A. 101-27, eff. 6-25-19; 101-593, eff. 12-4-19.)