Pritzker’s pot revenue depends on legalization bill not yet filed

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SPRINGFIELD — Gov. J.B. Pritzker’s proposed budget for the 2020 fiscal year includes $170 million in new revenue from licensing fees for legalized recreational marijuana, but the details of the legislation are not yet finalized.

State Sen. Heather Steans and state Rep. Kelly Cassidy, both Chicago Democrats who have been working on marijuana legislation for two years, said they wouldn’t rush the process on behalf of revenue.

“Assuming that we want to have some revenue, I think we’d like to pass it by the end of May,” Steans said. “But I think both Rep. Cassidy and I have been very clear that the revenue is not what is motivating or should drive this legislation, but obviously it’s a side benefit piece that can also come.”

Cassidy and Steans both said they are waiting for information from a demand study before moving legislation forward. They also want to ensure minority inclusion for vendors and social justice for people incarcerated for cannabis crimes that no longer would be illegal under the bill.

“We want to do this not by guess but by fact, said Cassidy. “That is why we’ve commissioned the study. We expect the results very, very shortly and that will inform how we grow the program.”

Steans said she would hope to have language filed for a Senate bill “in the next month or so,” and both said they would like to see it passed by May 31, provided they can iron out the final details. 

“I haven’t gotten the details behind (the governor’s $170 million projection). So I really can’t comment on that yet,” Steans said. “It seems like a reasonable approach. All the revenue estimates we’ve had so far, when you have a fully mature program in place, have been around $500 million. So this is clearly well below that and based much more on up-front licensing fees, not from receipts based on sales tax.”

The licensing fee structures for recreational marijuana are not yet clear. But for medicinal marijuana cultivation centers, a permit costs $200,000 up front with a $100,000 annual renewal fee and a $25,000 nonrefundable application fee, according to the state Department of Agriculture.

Illinois allows 22 cultivation center licenses, one in each state police district. Steans said the legislation could add other licensing for smaller craft cultivators, and for the processing and transportation of cannabis products.

She said she would like the location and placement of craft cultivators to be up to local zoning boards and municipalities, rather than being subject to the same strict regulations as existing medicinal cultivation centers.

While the Department of Agriculture regulates cultivation centers, the Department of Financial and Professional Regulation is in charge of the state’s 60 dispensary licenses, five of which are unused, and fees are much lower. Dispensary licenses cost $30,000 initially with a $25,000 annual renewal fee and a $5,000 nonrefundable application fee.

Cassidy said she expects the state to need “more dispensaries very quickly” to meet recreational demand, but exact figures will not be available until the demand study is released.

Both senators also emphasized bipartisan support for the legislation, and newly-seated Democratic Attorney General Kwame Raoul has voiced his conditional support for legalization.

With all the moving parts, Cassidy said the earliest possible implementation would be Jan. 1, 2020, but that could be pushing it.






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February 25, 2019 at 07:17AM

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