SB1968 102ND GENERAL ASSEMBLY

LRB102 16602 CPF 21999 b

102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB1968

Introduced 2/26/2021, by Sen. Adriane Johnson

SYNOPSIS AS INTRODUCED:

410 ILCS 705/15-15

Amends the Cannabis Regulation and Tax Act. Allows specified medical cannabis dispensing organizations to change locations within the same medical district and BLS Region as the location of the existing registered medical cannabis dispensary associated with the Early Approval Adult Use Dispensing Organization License. Provides conditions for relocation and requirements for the applicant to submit to the Department of Public Health. Requires the Department to approve any application provided under the provisions upon receipt by the Department of the materials that meet the requirements. Contains other provisions. Effective immediately.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning health.

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 Section 15-15 as follows:

(410 ILCS 705/15-15)

Sec. 15-15. Early Approval Adult Use Dispensing Organization License.

(a) Any medical cannabis dispensing organization holding a valid registration under the Compassionate Use of Medical Cannabis Program Act as of the effective date of this Act may, within 60 days of the effective date of this Act, apply to the Department for an Early Approval Adult Use Dispensing Organization License to serve purchasers at any medical cannabis dispensing location in operation on the effective date of this Act, pursuant to this Section.

(b) A medical cannabis dispensing organization seeking issuance of an Early Approval Adult Use Dispensing Organization License to serve purchasers at any medical cannabis dispensing location in operation as of the effective date of this Act shall submit an application on forms provided by the Department. The application must be submitted by the same person or entity that holds the medical cannabis dispensing organization registration and include the following:

(1) Payment of a nonrefundable fee of $30,000 to be deposited into the Cannabis Regulation Fund;

(2) Proof of registration as a medical cannabis dispensing organization that is in good standing;

(3) Certification that the applicant will comply with the requirements contained in the Compassionate Use of Medical Cannabis Program Act except as provided in this Act;

(4) The legal name of the dispensing organization;

(5) The physical address of the dispensing organization;

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

(7) A nonrefundable Cannabis Business Development Fee equal to 3% of the dispensing organization's total sales between June 1, 2018 to June 1, 2019, or $100,000, whichever is less, to be deposited into the Cannabis Business Development Fund; and

(8) Identification of one of the following Social Equity Inclusion Plans to be completed by March 31, 2021:

(A) Make a contribution of 3% of total sales from June 1, 2018 to June 1, 2019, or $100,000, whichever is less, to the Cannabis Business Development Fund. This is in addition to the fee required by item (7) of this subsection (b);

(B) Make a grant of 3% of total sales from June 1, 2018 to June 1, 2019, or $100,000, whichever is less, to a cannabis industry training or education program at an Illinois community college as defined in the Public Community College Act;

(C) Make a donation of $100,000 or more to a program that provides job training services to persons recently incarcerated or that operates in a Disproportionately Impacted Area;

(D) Participate as a host in a cannabis business establishment incubator program approved by the Department of Commerce and Economic Opportunity, and in which an Early Approval Adult Use Dispensing Organization License holder agrees to provide a loan of at least $100,000 and mentorship to incubate, for at least a year, a Social Equity Applicant intending to seek a license or a licensee that qualifies as a Social Equity Applicant. As used in this Section, "incubate" means providing direct financial assistance and training necessary to engage in licensed cannabis industry activity similar to that of the host licensee. The Early Approval Adult Use Dispensing Organization License holder or the same entity holding any other licenses issued pursuant to this Act shall not take an ownership stake of greater than 10% in any business receiving incubation services to comply with this subsection. If an Early Approval Adult Use Dispensing Organization License holder fails to find a business to incubate to comply with this subsection before its Early Approval Adult Use Dispensing Organization License expires, it may opt to meet the requirement of this subsection by completing another item from this subsection; or

(E) Participate in a sponsorship program for at least 2 years approved by the Department of Commerce and Economic Opportunity in which an Early Approval Adult Use Dispensing Organization License holder agrees to provide an interest-free loan of at least $200,000 to a Social Equity Applicant. The sponsor shall not take an ownership stake in any cannabis business establishment receiving sponsorship services to comply with this subsection.

(c) The license fee required by paragraph (1) of subsection (b) of this Section shall be in addition to any license fee required for the renewal of a registered medical cannabis dispensing organization license.

(d) Applicants must submit all required information, including the requirements in subsection (b) of this Section, to the Department. Failure by an applicant to submit all required information may result in the application being disqualified.

(e) If the Department receives an application that fails to provide the required elements contained in subsection (b), the Department shall issue a deficiency notice to the applicant. The applicant shall have 10 calendar days from the date of the deficiency notice to submit complete information. Applications that are still incomplete after this opportunity to cure may be disqualified.

(f) If an applicant meets all the requirements of subsection (b) of this Section, the Department shall issue the Early Approval Adult Use Dispensing Organization License within 14 days of receiving a completed application unless:

(1) The licensee or a principal officer is delinquent in filing any required tax returns or paying any amounts owed to the State of Illinois;

(2) The Secretary of Financial and Professional Regulation determines there is reason, based on documented compliance violations, the licensee is not entitled to an Early Approval Adult Use Dispensing Organization License; or

(3) Any principal officer fails to register and remain in compliance with this Act or the Compassionate Use of Medical Cannabis Program Act.

(g) A registered medical cannabis dispensing organization that obtains an Early Approval Adult Use Dispensing Organization License may begin selling cannabis, cannabis-infused products, paraphernalia, and related items to purchasers under the rules of this Act no sooner than January 1, 2020.

(h) A dispensing organization holding a medical cannabis dispensing organization license issued under the Compassionate Use of Medical Cannabis Program Act must maintain an adequate supply of cannabis and cannabis-infused products for purchase by qualifying patients, caregivers, provisional patients, and Opioid Alternative Pilot Program participants. For the purposes of this subsection, "adequate supply" means a monthly inventory level that is comparable in type and quantity to those medical cannabis products provided to patients and caregivers on an average monthly basis for the 6 months before the effective date of this Act.

(i) If there is a shortage of cannabis or cannabis-infused products, a dispensing organization holding both a dispensing organization license under the Compassionate Use of Medical Cannabis Program Act and this Act shall prioritize serving qualifying patients, caregivers, provisional patients, and Opioid Alternative Pilot Program participants before serving purchasers.

(j) Notwithstanding any law or rule to the contrary, a person that holds a medical cannabis dispensing organization license issued under the Compassionate Use of Medical Cannabis Program Act and an Early Approval Adult Use Dispensing Organization License may permit purchasers into a limited access area as that term is defined in administrative rules made under the authority in the Compassionate Use of Medical Cannabis Program Act.

(k) An Early Approval Adult Use Dispensing Organization License is valid until March 31, 2021. A dispensing organization that obtains an Early Approval Adult Use Dispensing Organization License shall receive written or electronic notice 90 days before the expiration of the license that the license will expire, and that informs the license holder that it may apply to renew its Early Approval Adult Use Dispensing Organization License on forms provided by the Department. The Department shall renew the Early Approval Adult Use Dispensing Organization License within 60 days of the renewal application being deemed complete if:

(1) the dispensing organization submits an application and the required nonrefundable renewal fee of $30,000, to be deposited into the Cannabis Regulation Fund;

(2) the Department has not suspended or permanently revoked the Early Approval Adult Use Dispensing Organization License or a medical cannabis dispensing organization license on the same premises for violations of this Act, the Compassionate Use of Medical Cannabis Program Act, or rules adopted pursuant to those Acts;

(3) the dispensing organization has completed a Social Equity Inclusion Plan as provided by parts (A), (B), and (C) of paragraph (8) of subsection (b) of this Section or has made substantial progress toward completing a Social Equity Inclusion Plan as provided by parts (D) and (E) of paragraph (8) of subsection (b) of this Section; and

(4) the dispensing organization is in compliance with this Act and rules.

(l) The Early Approval Adult Use Dispensing Organization License renewed pursuant to subsection (k) of this Section shall expire March 31, 2022. The Early Approval Adult Use Dispensing Organization Licensee shall receive written or electronic notice 90 days before the expiration of the license that the license will expire, and that informs the license holder that it may apply for an Adult Use Dispensing Organization License on forms provided by the Department. The Department shall grant an Adult Use Dispensing Organization License within 60 days of an application being deemed complete if the applicant has met all of the criteria in Section 15-36.

(m) If a dispensing organization fails to submit an application for renewal of an Early Approval Adult Use Dispensing Organization License or for an Adult Use Dispensing Organization License before the expiration dates provided in subsections (k) and (l) of this Section, the dispensing organization shall cease serving purchasers and cease all operations until it receives a renewal or an Adult Use Dispensing Organization License, as the case may be.

(n) A dispensing organization agent who holds a valid dispensing organization agent identification card issued under the Compassionate Use of Medical Cannabis Program Act and is an officer, director, manager, or employee of the dispensing organization licensed under this Section may engage in all activities authorized by this Article to be performed by a dispensing organization agent.

(o) If the Department suspends, permanently revokes, or otherwise disciplines the Early Approval Adult Use Dispensing Organization License of a dispensing organization that also holds a medical cannabis dispensing organization license issued under the Compassionate Use of Medical Cannabis Program Act, the Department may consider the suspension, permanent revocation, or other discipline of the medical cannabis dispensing organization license.

(p) All fees collected pursuant to this Section shall be deposited into the Cannabis Regulation Fund, unless otherwise specified.

(q) Notwithstanding any limitation set forth in subsections (a) and (b) of this Section, any medical cannabis dispensing organization holding a valid registration on June 25, 2019 under the Compassionate Use of Medical Cannabis Program Act that has been awarded an Early Approval Adult Use Dispensing Organization License may apply to the Department to change its location. The new location must be located within the same medical district and BLS Region as the location of the existing registered medical cannabis dispensary associated with the Early Approval Adult Use Dispensing Organization License. The Early Approval Adult Use Dispensing Organization may only apply to relocate under this subsection (q) if one of the following conditions applies:

(1) The registered medical cannabis dispensing organization is located in a unit of local government that has restricted the sale of adult use cannabis pursuant to paragraph (5) of Section 55-25 or Section 55-28.

(2) The unit of local government in which the Early Approval Adult Use Dispensing Organization is located requests, pursuant to local zoning approval and local authority, that the State allow the Early Approval Adult Use Dispensing Organization to move to a different location within the same unit of local government due to local zoning concerns or the inability of the Early Approval Adult Use Dispensing Organization to service both medical cannabis patients and adult use customers in an orderly and safe manner.

(r) A holder of an Early Approval Adult Use Dispensing Organization License applying to change locations under subsection (q) of this Section shall submit the following to the Department:

(1) A copy of the unit of local government's ordinance, resolution, or other official document demonstrating that the Early Approval Adult Use Dispensing Organization meets the requirements of either paragraph (1) or (2) of subsection (q).

(2) Proof of registration as a medical cannabis dispensing organization that is in good standing.

(3) Submission of the application by the same person or entity that holds the medical cannabis dispensing organization registration.

(4) The legal name of the medical cannabis dispensing organization.

(5) The physical address of the medical cannabis dispensing organization and the proposed physical address of the proposed new site.

(6) A copy of the current local zoning ordinance provisions relevant to dispensary operations and documentation of the approval or the conditional approval of the status of a request for zoning approval from the local zoning office that the proposed dispensary location is in compliance with the local zoning rules.

(7) A plot plan of the dispensary drawn to scale. The applicant shall submit general specifications of the building exterior and interior layout.

(8) A statement that the medical cannabis dispensing organization agrees to respond to the Department's supplemental requests for information.

(9) For the building or land to be used as the proposed dispensary:

(A) if the property is not owned by the applicant, a written statement from the property owner and landlord, if any, certifying consent that the applicant may operate a dispensary on the premises; or

(B) if the property is owned by the applicant, confirmation of ownership and a copy of the proposed operating bylaws.

(10) A copy of the proposed business plan that complies with the requirements of 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 of this Article, including:

(A) a description of the delivery process by which cannabis will be received from a transporting organization, including receipt of manifests and protocols that will be used to avoid diversion, theft, or loss at the dispensary acceptance point;

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

(C) 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) The name, address, social security number, and date of birth of each principal officer and board member of the medical cannabis dispensing organization. Each of those individuals must be at least 21 years of age.

(s) The Department shall approve any application provided under subsection (q) of this Section upon receipt by the Department of the materials that meet the requirements outlined under subsection (r).

(t) An Early Approval Adult Use Dispensing Organization License that has been approved for relocation pursuant to subsection (q) of this Section may begin selling cannabis and cannabis-infused products to purchasers at the approved location and shall be subject to the renewal process under subsections (k) and (l) of this Section.

(u) Relocation of an Early Approval Adult Use Dispensing Organization License under subsection (q) shall not occur any sooner than 90 days after awarding the first Conditional Adult Use Dispensing Organization Licenses under Section 15-25.

(v) The new location of an Early Approval Adult Use Dispensing Organization relocated under subsection (q) shall comply with paragraph (5) of Section 55-25 and Section 55-28.

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

Section 99. Effective date. This Act takes effect upon becoming law.