HB4193 103RD GENERAL ASSEMBLY

LRB103 34956 RLC 64843 b

103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB4193

Introduced 10/25/2023, by Rep. La Shawn K. Ford

SYNOPSIS AS INTRODUCED:

New Act

Creates the Prevention of Use of Hemp Cannabinoid Products Intended for Human Consumption by Ingestion or Inhalation by Persons Under 21 Years of Age Act. Permits the sale and possession of hemp cannabinoids by persons 21 years of age or over. Provides that no person shall offer or sell hemp cannabinoid products to consumers in the State unless the person applies for and holds a hemp retailer licensed issued by the Department of Financial and Professional Regulation. Provides that no person shall sell ready-to-eat hemp products to end consumers without holding a hemp food establishment license issued by the Department of Public Health. Provides that a hemp food establishment that sells ready-to-eat cannabinoid products shall be exclusively licensed and located in the State. Provides that hemp food establishments and hemp retailers shall require proof of age from a purchaser of any cannabinoid products before selling the product to that person. Provides that the Department of Financial and Professional Regulation shall administer and enforce the provisions of the Act relating to licensing and oversight of hemp distributor establishment unless otherwise provided in the Act. Establishes standards for the issuance of licenses under the Act. Provides for criminal and civil penalties for violation of the Act.

A BILL FOR

AN ACT concerning hemp cannabinoids.

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

Section 1. Short title. This Act may be cited as the Prevention of Use of Hemp Cannabinoid Products Intended for Human Consumption by Ingestion or Inhalation by Persons Under 21 Years of Age Act.

Section 5. Definitions. In this Act:

"Cannabinoid menu item" means a restaurant-type food that incorporates ready-to-eat cannabinoids included on a menu or menu board or offered as a food on display.

"Hemp business establishment" means a hemp retailer or hemp food establishment.

"Hemp cannabinoid" means the chemical constituents of hemp plants that are naturally occurring and biologically active.

"Hemp cannabinoid product" means a finished product for sale to hemp cannabinoid users at hemp business establishments within the State that contains cannabinoids derived from hemp and is intended for human consumption by inhalation or ingestion.

"Hemp cannabinoid user" means a member of the general public who buys or uses hemp and who is protected by laws against unfair or fraudulent practices in the marketplace.

"Hemp food establishment" means a facility regulated by the Illinois Department of Public Health that incorporates intermediate hemp products in the manufacturing, processing, or preparation of prepackaged or ready-to-eat hemp cannabinoid products for human ingestion and which meets the requirements of this Act.

"Hemp retailer" means a retailer operated by an organization or business that is licensed by the Department of Financial and Professional Regulation to sell hemp cannabinoid products to hemp cannabinoid users.

"Ingestion" means the process of consuming cannabinoid products through the mouth, whether by swallowing into the gastrointestinal system or through tissue absorption.

"Inhalation" means the process of consuming cannabinoid products through the mouth or nasal passage into the respiratory system.

"Intermediate hemp products" means products that are made from processed hemp that may only be sold to hemp business establishments to be used as ingredients for other intermediate hemp products or final hemp cannabinoid products for human consumption by ingestion or inhalation. "Intermediate hemp products" include products that contain more than 0.3% THC.

"Menu" means the primary writing of the establishment from which a customer makes an order selection, including, but not limited to, breakfast, lunch, and dinner menus, dessert menus, beverage menus, other specialty menus, electronic menus, menu boards, and menus published on the Internet.

"Ready-to-eat hemp cannabinoid product" means a type of hemp cannabinoid product available for human consumption, including time or temperature control, or both, for food safety, as "ready-to-eat food" is defined in Section 1-201.10 of the Food Code 2017 of the United States Public Health Service of the Food and Drug Administration, that does not exceed 50 milligrams of THC per serving, and that utilizes intermediate hemp products as an input as is produced as a single serving in a retail food establishment.

Section 10. Sale of hemp cannabinoid products.

(a) The retail sale of hemp cannabinoids is allowed as provided in this Act.

(b) No person shall offer or sell hemp cannabinoid products to consumers in the State unless the person applies for and holds a hemp retailer license issued by the Department of Financial and Professional Regulation. No person shall sell ready-to-eat hemp products to end consumers without holding a hemp food establishment license issued by the Department of Public Health.

(c) A hemp food establishment that sells ready-to-eat cannabinoid products shall be exclusively licensed and located in the State.

(d) No person shall sell a hemp cannabinoid product to any person under the age of 21.

(e) No person shall sell, buy for, distribute samples of, or furnish any cannabinoid product to any person under the age of 21.

(f) No person under 21 years of age in the furtherance or facilitation of obtaining hemp cannabinoid products shall display or use a false or forged identification card or transfer, alter, or deface an identification card.

(g) A hemp food establishment or hemp retailer that sells cannabinoid products intended for inhalation shall post a clear and conspicuous sign directly adjacent to the display of the product that states the following: "THE SALE OF CANNABINOID PRODUCTS INTENDED FOR INHALATION TO PERSONS UNDER THE AGE OF 21 IS PROHIBITED. PROOF OF AGE IS REQUIRED FOR PURCHASE.".

(h) Cannabinoid products may not be mailed, shipped, or otherwise delivered to a purchaser unless, before the delivery to the purchaser, the hemp retailer obtains confirmation that the purchaser is 21 years of age or older.

(i) Hemp food establishments and hemp retailers shall require proof of age from a purchaser of any cannabinoid products before selling the product to that person. Hemp food establishments and hemp retailers shall exercise diligence in the management and supervision of their premises and in the supervision and training of their employees to prevent the underage sale of these products.

(j) A product containing cannabinoids must not be considered adulterated or unsafe solely because the product contains cannabinoids or other material extracted or derived from hemp plants.

(k) A person, hemp food establishment, or hemp retailer that violates subsection (e) is guilty of a Class 4 felony. A person under the age of 21 who violates subsection (f) is guilty of a Class A misdemeanor.

Section 15. Licensing and regulation of hemp retailers.

(a) The Department of Financial and Professional Regulation shall administer and enforce the provisions of this Act relating to licensing and oversight of hemp distributor establishment unless otherwise provided in this Act.

(b) No person shall operate a hemp retail establishment for the purpose of serving purchasers of hemp cannabinoid products without a license issued under this Act by the Department.

(c) Subject to the provisions of this Act, the Department may exercise the following powers and duties:

(1) prescribe forms to be issued for the administration and enforcement of this Act;

(2) examine, inspect, and investigate the premises, operations, and records of hemp retail organization applicants and licensees;

(3) conduct investigations of possible violations of this Act pertaining to hemp retail organizations; and

(4) conduct hearings on proceedings to refuse to issue or renew licenses or to revoke, suspend, place on probation, reprimand, or otherwise discipline a license holder under this Act or take other nondisciplinary action.

(d) The Department may not limit the number of hemp retailer licenses.

(e) The Department may not limit the number of hemp retailer licenses an individual may hold.

(f) Applicants for a hemp retail license must submit all information required by the Department. Failure by an applicant to submit all required information may result in the application being disqualified.

(g) The Department may verify information contained in each application and accompanying documentation to assess the applicant's veracity and fitness to operate a hemp retailer establishment.

(h) The Department may refuse to issue a license to any applicant who:

(1) fails to disclose or states falsely any information called for in the applications;

(2) has been found guilty of a violation of this Act, who has had any disciplinary order entered against it by the Department, who has entered into a disciplinary or nondisciplinary agreement with the Department, or whose hemp business establishment license was suspended, restricted, revoked, or denied in another State; or

(3) has engaged in a pattern or practice of unfair or illegal practices, methods, or activities in the conduct of owning a hemp business establishment or other business.

(i) The Department shall deny the license if any principal officer, board member, or persons having a financial or voting interest of 5% or greater on the license is delinquent in filing any required tax returns or paying any amounts owed to the State.

(j) The Department shall verify an applicant's compliance with the requirements of this Act and rules before issuing a hemp retailer license.

Section 20. Operational requirements of hemp retailers.

(a) A hemp retailers shall operate in accordance with the representations made in its application and license materials. It shall be in compliance with this Act and rules.

(b) A hemp retailer establishment that obtains a hemp food establishment license may prepare and sell ready-to-eat hemp cannabinoid products.

(c) A hemp retailer establishment shall maintain compliance with State and local building, fire, and zoning requirements and regulations.

(d) A hemp retailer's license allows for a hemp retailer to be operated only at a single location.

(e) A hemp retailer establishment shall ensure that any building or equipment used by the hemp retailer establishment for the sale of hemp, hemp cannabinoid products, and ready-to-eat hemp cannabinoid products are maintained in a clean and sanitary condition.

(f) A hemp retailer establishment shall be free from infestation by insects, rodents, or pests.

(g) A hemp retailer license shall not give the licensee the right to:

(1) grow hemp;

(2) produce or manufacture hemp or hemp cannabinoid products;

(3) sell hemp cannabinoid products to a purchaser unless the purchaser is a medical patient or that the purchaser has been verified to be 21 years of age or older; or

(4) violate any other requirements or prohibitions set by Department rules.

(h) A hemp retailer license may be obtained by an out-of-state entity if:

(1) the applicant and any and all principals officers on the application retains a registered agent or office and agrees to submit to tax nexus within the State for jurisdictional, regulatory, and enforcement purposes; and

(2) the applicant maintains a log of all sales to residents located within the State to be submitted for inspection by the Department.

Section 25. Regulation of hemp food establishments.

(a) As used in this Section, "Department" means the Department of Public Health.

(b) The Department shall administer and enforce the provisions of this Act relating to the licensing and oversight of hemp food establishments unless otherwise provided in this Act.

(c) No person shall operate a hemp food establishment for the purpose of serving hemp cannabinoid products for human ingestions or ready-to-eat hemp cannabinoid products without a license issued under this Act.

(d) Subject to the provisions of this Act, the Department may exercise the following powers and duties:

(1) prescribe forms to be issued for the administration and enforcement of this Act;

(2) examine, inspect, and investigate the premises, operations, and records of hemp food establishment applicants and licensees;

(3) conduct investigations of possible violations of this Act pertaining to hemp food establishments; and

(4) conduct hearings on proceedings to refuse to issue or renew licenses or to revoke, suspend, place on probation, reprimand, or otherwise discipline a license holder under this Act or take other nondisciplinary action.

(e) The Department may not limit the number of hemp food establishment licenses.

(f) The Department shall not limit the number of licenses an individual may hold. Applicants for a hemp food establishment license must submit all information required by the Department. Failure by an applicant to submit all required information may result in the application being disqualified.

(g) The Department may verify information contained in each application and accompanying documentation to assess the applicant's veracity and fitness to operate a hemp food establishment.

(h) The Department may refuse to issue an authorization to any applicant who:

(1) fails to disclose or falsifies any information called for in the application;

(2) has been found guilty of a violation of this Act, who has had any disciplinary order entered against the applicant by the Department, who has entered into a disciplinary or nondisciplinary agreement with the Department, or whose hemp business establishment license was suspended, restricted, revoked, or denied in another state; or

(3) has engaged in a pattern or practice of unfair or illegal practices, methods, or activities in the conduct of owning a hemp business establishment or other business.

(i) The Department shall deny the license if any principal officer, board member, or persons having a financial or voting interest of 5% or greater on the license is delinquent in filing any required tax returns or paying any amounts owed to the State.

(j) The Department shall verify an applicant's compliance with the requirements of this Act and rules before issuing a hemp food establishment license.

Section 30. Operational requirements of hemp food establishments.

(a) A hemp food establishment dealing in the manufacture and sale of food items that does not comply with the existing State laws related to food handling or does not comply with the health and food handling regulations of a unit of local government having jurisdiction over the establishment may be enjoined from doing business in the following manner: the Department of Public Health or a local department of health may seek an injunction in the circuit court of the county in which the establishment is located. An injunction, if granted, shall prohibit the hemp food establishment from selling hemp cannabinoid products for human ingestion until it complies with any applicable State law or regulations of a unit of local government. However, no injunction may be sought or granted before January 1, 2025, to enforce any rule or regulation requiring a licensed food business to adhere to those rules and regulations.

(b) The Department of Public Health shall adopt and enforce rules for the manufacturing and processing of hemp cannabinoid products for human ingestions at a hemp food establishment, and, for that purpose, it may at all times enter every building, room, basement, enclosure, or premises occupied or used, or suspected of being occupied or used, for the production, preparation, manufacture for sale, storage, sale, processing, distribution, or transportation and to inspect the premises of a hemp food establishment together with all utensils, fixtures, furniture, and machinery used for the preparation of these products.

(c) A hemp food establishment shall be under the operational supervision of a certified food service sanitation manager in accordance with rules adopted under this Act.

(d) A hemp food establishment shall operate in accordance with the representations made in its application and license materials. It shall be in compliance with this Act and rules.

(e) A hemp food establishment shall comply with the food handling, preparation, packaging and labeling provisions of the Illinois Food, Drug and Cosmetic Act, the Food Handling Regulation Enforcement Act, and the Sanitary Food Preparation Act.

(f) A hemp food establishment that obtains a hemp retailer license may prepare and sell ready-to-eat hemp cannabinoid products.

(g) A hemp food establishment shall maintain compliance with State and local building, fire, and zoning requirements.

(h) A hemp food establishment license allows for a hemp food establishment to be operated only at a single location.

(i) A hemp food establishment shall ensure that any building or equipment used by the hemp food establishment for the storage, preparation, or sale of hemp cannabinoid products for human ingestion and ready-to-eat hemp cannabinoid products are maintained in a clean and sanitary condition.

(j) A hemp food establishment shall be free from infestation by insects, rodents, or pests.

(k) A hemp food establishment, when combined with an on-site hemp retailer license, allows for the preparation and sale of ready-to-eat hemp cannabinoid products.

(l) A hemp food establishment license shall not give the establishment the right to:

(1) grow hemp;

(2) process hemp;

(3) prepare and sell ready-to-eat hemp cannabinoid products to a purchaser unless the purchaser has been verified to be 21 years of age or older; or

(4) violate any other requirements or prohibitions set by the Department of Health rules.

Section 35. Recipes and dosing of ready-to-eat hemp cannabinoid products. In order to sell ready-to-eat hemp cannabinoid products, a hemp food establishment shall:

(1) keep THC dosing at or below 50 milligrams per serving;

(2) submit a standard operating procedure for dosing to the Department of Public Health for approval and registration. The approval shall be granted within 30 days of submission unless the Department provides good cause, in writing, for withholding approval;

(3) submit the recipe, at the hemp food establishment's expense, to a third-party testing laboratory for potency testing to ensure 0.3% THC compliance on an annual basis;

(4) use only the varietal or proportional varietals of ingredients included in the tested recipe for all subsequent batches of the recipe; and

(5) provide documentation of the annual test results of the recipe submitted under this paragraph upon registration and to an inspector upon request during any inspection authorized by the Department.

Section 40. Disclosure and labeling of ready-to-eat hemp cannabinoid products.

(a) Hemp food establishments must ensure that the total milligram content of each type of cannabinoid exceeding one milligram contained in each ready-to-eat hemp cannabinoid menu item is listed on the menu adjacent to the name or the price of the associated menu item.

(b) Hemp food establishments must ensure that served ready-to-eat hemp cannabinoid menu items include a label that:

(1) indicates the total milligram content of the served items; and

(2) provides a QR code for a link to a web page containing a copy of:

(A) the testing results of the intermediate hemp product used;

(B) the dosing standard operating procedure; and

(C) a representative compliance test for the recipe.

Section 45. Administrative hearings.

(a) Administrative hearings involving licenses issued under this Act shall be conducted under the Department issuing the licenses' rules governing formal administrative proceedings.

(b) The following administrative fines may be imposed by the Department upon any person or entity who violates any provision of this Act or any rule adopted by any State department under this Act:

(1) a penalty of $2,500 for a first violation;

(2) a penalty of $5,000 for a second violation at the same location within 2 years of the first violation; and

(3) a penalty of $10,000 for a third or subsequent violation at the same location within 2 years of the second or subsequent violation.

Any penalty of $5,000 or greater that is not paid within 120 days of issuance of notice from the Department shall be submitted to the Department of Revenue for collection as provided under the Illinois State Collection Act of 1986. The Department may prohibit any person from selling or distributing a hemp cannabinoid product for failure to pay an administrative monetary penalty within 60 days of issuance of notice from the Department.

(c) All final administrative decisions of the Department are subject to judicial review under the Administrative Review Law. For the purposes of this subsection, "administrative decision" has the meaning given to that term in Section 3-101 of the Code of Civil Procedure.