SPRINGFIELD — Illinois House Democrats announced the formation of a cannabis working group Thursday that will aim to steer the burgeoning industry’s expansion in a business-friendly way while still satisfying the equity goals of the landmark 2019 legalization law.
The group is led by Rep. La Shawn Ford, D-Chicago, who has sponsored numerous cannabis-related bills and is an outspoken advocate for racial equity.
The working group’s main priority, according to Ford, is to make sure individuals who have invested in the newly-created industry are successful. A part of that is to address the disproportionate impact the war on drugs had on communities of color, particularly when it comes to cannabis-related arrests.
According to the ACLU, Black people in Illinois were 7.5 times more likely than white people to be arrested for cannabis-related offenses prior to the state’s decriminalization of the drug in 2016.
The same law that legalized recreational cannabis use in 2019 also made individuals previously charged with minor cannabis offenses eligible to have their records expunged. At the end of 2020, Gov. J.B. Pritzker announced 492,129 cannabis-related convictions had been expunged and 9,219 low-level cannabis convictions had been pardoned.
The recreational cannabis law was also designed to give “social equity” applicants — or those whose ownership consists of minorities, people with drug convictions or individuals hailing from disproportionately impacted areas — easier access to new dispensary licenses.
“Our goal was to make sure that those communities that were hardest hit by the war on drugs actually were able to benefit from this industry by having the ability to open up in those communities and hire people from those communities,” Ford said in an interview.
Ford was the sponsor of House Bill 1443 in the previous General Assembly, a measure that created 110 additional “social equity” dispensary licenses beyond the initial 75 created by the original legalization law.
Over 30 cannabis-related bills have already been filed in the current General Assembly which began in January, addressing areas including licensing, distribution of cannabis tax revenue and the expungement of past offenses. The working group will comb through these measures to more effectively address the industry’s most pertinent issues.
Illinois recorded a record-high $1.5 billion of recreational cannabis sales in Fiscal Year 2022, generating about $445 million in tax revenue. Under law, 25% of the taxes collected from recreational cannabis sales are to go to economically distressed communities or those impacted by the war on drugs. In Fiscal Year 2022, about $115 million in tax revenue went to the state’s General Revenue Fund.
Beyond an equity focus, Ford said the working group will also aim to make state policy more accommodating to the industry from a business perspective.
“We have to make sure that we legislate with the industry because they are the investors,” Ford said. “If we could empower the businesses, it’s going to mean more revenue, and we’re going to realize what we intended for the [cannabis legalization] law to do. And that is increase employment, develop communities, reduce crime in the state.”
Ford is joined on the working group by Assistant Majority Leader Marcus Evans, D-Chicago; Assistant Majority Leader Barbara Hernandez, D-Aurora; Assistant Majority Leader Bob Rita, D-Blue Island; Rep. Jennifer Gong-Gershowitz, D-Glenview; Rep. Sonya Harper, D-Chicago; and Rep. Bob Morgan, D-Deerfield.
They’ll work with other lawmakers, state agencies, businesses and associations that work directly with the cannabis industry.
One of the involved organizations is the Cannabis Business Association of Illinois, a statewide trade association for cannabis businesses.
The association’s legislative priorities include re-implementing curbside pickup and drive-thru services after pandemic-era measures expired, decoupling Illinois’ cannabis tax code from the federal tax code, and extending the right to work in the medical cannabis industry for those who have previous cannabis-related convictions.
“Currently, the recreational statute allows individuals with previous drug convictions to gain access to the cannabis industry,” Pamela Althoff, executive director at the Cannabis Business Association of Illinois, said in an interview. “That is prohibited in the compassionate and medical statute. We’d like to see both of them mirrored.”
The Cannabis Equity Illinois Coalition, a grassroots nonprofit that advocates for cannabis-related reform, has their own priorities for the legislative session, including expanding support for the craft grow industry, creating a singular cannabis oversight commission to streamline cannabis programs, and creating licenses for clubs and lounges so people other than homeowners are able to legally consume cannabis.
“The goal is moving away from having 13-plus state agencies who are not talking to each other,” Peter Contos, deputy director of the coalition, said in an interview. “We need one cannabis body who just does all the work, similar to what the state did with the liquor commission.”
Evans and Ford have both introduced bills — House Bills 1436 and 1498 — to create a cannabis oversight commission. Contos said the coalition is currently trying to work with both lawmakers to reach an agreement on the legislation.
Contos added they’re excited to be involved with the working group because it shows there’s a concerted effort to continue cannabis-related reforms.
“We have a long way to go in Illinois to get back to the goals we set a few years ago when we legalized [cannabis] but this is definitely the first step we need to take,” Contos said.
Recreational cannabis is now legal in two more states.
States with the highest revenue from cannabis taxes
States with the highest revenue from cannabis taxes
The Drug Enforcement Agency hasn’t seen any reason to remove cannabis from its list of Schedule I banned substances. Yet, cannabis in its myriad forms is pulling in billions of dollars in vital tax revenue for 11 states where it is legal to buy and use—$3 billion in 2022 alone.
The drug has sat in the Schedule I classification alongside heroin, peyote, and other substances the DEA considers to have a high potential for abuse since 1970, when Congress enacted the Controlled Substances Act, making it federally illegal to possess them. Two decades after the law passed, following intense social pressure that segued into the realization of a new tax opportunity, certain states began to make the drug available to residents, citing the medical benefits and relative safety compared with other substances.
While marijuana’s negative impacts on health, such as the potential to inhale harmful carcinogens when smoking, have been documented, there have never been any confirmed fatal overdoses resulting from marijuana use alone. In light of the rise in cannabis availability (to say nothing of popularity), the Biden administration passed a landmark law in December 2022, allowing the federal government to study its effects for the first time to a greater degree.
The first state to legalize marijuana use in a medical capacity was California, which did so in 1996. Today, marijuana is legal for medical use in 38 states and four territories, including Guam and the Virgin Islands, according to the nonprofit NORML, which advocates for marijuana legalization and regulation on par with that of alcohol.
In the intervening years, more states have made a move to legalize and regulate sales or, at the least, decriminalize cannabis use. In 2022, five states voted on recreational cannabis use, with two—Maryland and Missouri—approving such measures. The taxes generated by cannabis and cannabis-related sales benefits programs and state-level institutions, including education systems, correctional facilities, fire departments, and transportation initiatives.
Stacker used Urban Institute data to rank states by the share of 2022 tax revenue they collected through recreational-use cannabis excise taxes, breaking ties by total cannabis tax revenue. The data is limited to the 11 states that collected a cannabis excise tax from July 2021 through June 2022. An excise tax is paid on a manufactured good, like plant byproducts, at its point of sale. There are three ways cannabis products can be taxed: by a standard percentage of the price, by weight, and by the relative potency of the product.
Technically, levying cannabis taxes is still illegal under federal law, but 19 states have enacted cannabis tax legislation as of September 2022. Connecticut, New York, Rhode Island, Vermont, and Virginia have passed laws enacting cannabis taxes, but at the time of data collection, sales were not legal yet. Washington D.C. allows the legal sale of cannabis, but Congress prevents it from levying taxes on legal sales. Minnesota allows the purchase of some THC-infused products, but does not levy a cannabis tax.
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#11. Maine
– Share of tax revenue from cannabis excise taxes: 0.3%
– Statewide cannabis excise tax revenue: $18.2 million
— Per capita: $13
Maine legalized the recreational use of cannabis in 2016 for adults 21 years of age and older. Cannabis sales did not begin, however, until October 2018, and taxation did not pick up until November 2020.
#10. California
– Share of tax revenue from cannabis excise taxes: 0.3%
– Statewide cannabis excise tax revenue: $774.4 million
— Per capita: $20
California, forever the first state to dive into the wild world of cannabis legalization, collected more in cannabis sales taxes than any other state in 2022. One reason behind that is, despite the repeal of a weight-based tax, the state levies a 15% excise tax, and some local-level governments also add a gross receipts tax, which often carries down to the individual buyer.
#9. Massachusetts
– Share of tax revenue from cannabis excise taxes: 0.4%
– Statewide cannabis excise tax revenue: $156.7 million
— Per capita: $22
The state of Massachusetts last year became the first state to add lessons about marijuana-impaired driving to its driver’s license curriculum for new drivers. The state passed reforms to its marijuana laws in 2022 that will place 15% of marijuana excise taxes in a fund to support diversity in the marijuana retail industry, which white men dominate.
#8. Michigan
– Share of tax revenue from cannabis excise taxes: 0.4%
– Statewide cannabis excise tax revenue: $163.5 million
— Per capita: $16
In November 2018, Michigan became the first Midwestern state to legalize both medical and recreational marijuana use. The state sends millions of tax dollars from drug sales to its public schools and public transportation sectors.
#7. Arizona
– Share of tax revenue from cannabis excise taxes: 0.6%
– Statewide cannabis excise tax revenue: $132.8 million
— Per capita: $18
In March 2022 alone, marijuana sales generated more tax revenue for Arizona than tobacco and alcohol sales combined. Those taxes help fund public schools. The state also passed a law that has allowed people, as of 2021, with marijuana charges on their record to get them expunged.
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#6. Illinois
– Share of tax revenue from cannabis excise taxes: 0.8%
– Statewide cannabis excise tax revenue: $466.8 million
— Per capita: $37
Anyone 21 years of age or older has been able to buy recreational weed in Illinois since the start of 2020. The tax revenues fund social programs for housing and mental health. The state levies gross receipts and potency taxes.
#5. Oregon
– Share of tax revenue from cannabis excise taxes: 1.0%
– Statewide cannabis excise tax revenue: $170.6 million
— Per capita: $40
In Oregon, revenues from marijuana sales tax go to a number of places, including police budgets, municipalities, and health systems. The largest portion—40%—is devoted to the state’s school fund.
#4. Alaska
– Share of tax revenue from cannabis excise taxes: 1.2%
– Statewide cannabis excise tax revenue: $28.9 million
— Per capita: $39
More than 3% of all taxes collected in Alaska in 2021 came from marijuana sales. While that figure dropped the following year, the tax funds nonetheless benefited drug treatment programs and initiatives to keep the formerly incarcerated from ending up back in jail.
#3. Washington
– Share of tax revenue from cannabis excise taxes: 1.5%
– Statewide cannabis excise tax revenue: $517.0 million
— Per capita: $67
Washington State has enjoyed legal recreational marijuana for nearly an entire decade now. Those tax dollars fund health care, state police, and local government budgets.
#2. Nevada
– Share of tax revenue from cannabis excise taxes: 1.7%
– Statewide cannabis excise tax revenue: $152.3 million
— Per capita: $48
In 2019, Nevada passed a law directing all marijuana tax revenues to public education. The state still prevents the sale and use of marijuana at large events.
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#1. Colorado
– Share of tax revenue from cannabis excise taxes: 1.7%
– Statewide cannabis excise tax revenue: $353.7 million
— Per capita: $61
Colorado wins above all other states, bringing in the largest share of its taxes via marijuana excise taxes. The tax revenue goes toward housing, mental health care, rehabilitating older school buildings, and other social programs.
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February 24, 2023 at 04:57PM