Governor Pritzker is Bent on Destroying the Illinois Hemp Industry
Billionaire Illinois Governor JB Pritzker has been using his outsized influence to promote a bill, IL HB 4293, that will decimate the state’s hemp industry. If it passes, the bill will place all products containing intoxicating cannabinoids, including ones that are hemp-derived, under the Illinois Cannabis Regulation and Tax Act (CRTA). The CRTA legalized adult-use cannabis in 2019. In effect, HB 4293 will take away the hard-earned market for hemp products from the state’s hemp industry and give it to the state’s marijuana industry.
HB 4293’s short history is convoluted and a little difficult to follow. It was unanimously passed by the Illinois House in April. Strangely, this does not indicate support in the House to kill the state’s hemp industry. This is because the House version of the bill dealt solely with massage therapy misconduct. However, rather than pass the massage therapy bill, the Senate completely replaced the bill’s language and replaced it with the Hemp Consumer Products Act, which it passed in May 2024. The newly re-written bill is now back in the House and may get attention in the “lame duck session” as soon as January 4.
Governor Pritzker, who in a federal lawsuit is alleged to have deep connections with the Illinois marijuana industry, is apparently lobbying hard to put the hemp industry out of business. I have heard from reputable sources that he is going so far as to “call in favors” from House members that he has helped in the past to convince them to vote in favor of HB 4293. He stated the following about the hemp industry during a December 13 press release:
“This regulatory gray area has created a loophole that put Illinois consumers of all ages, but particularly children, in danger while an underground market flourished—the exact opposite of what Illinois has done by regulating our cannabis industry. We’re closing that loophole and protecting Illinoisans of all ages by incorporating these products into the regulated and equitable system of dispensaries already in place in the state.”
The hemp industry is not an “underground market”. It is a lawful, regulated market that has existed in Illinois for almost a decade. Additionally, and as has become typical for politicians who promote anti-hemp legislation, the issue of “safety” was front and center during Pritzker’s press conference. However, the real issue in Illinois is not regulation of hemp products for safety, which the state’s hemp industry supports. Rather, the problem is that HB 4293 is not a “hemp regulation” bill so much as a “kill hemp” bill. If passed, it will shutter thousands of small hemp businesses, eliminate thousands of jobs, and give hemp products to the marijuana industry. In other words, according to Governor Pritzker, products that are “unsafe” when sold by federally lawful hemp businesses are “safe” when sold by federally illegal marijuana businesses. That doesn’t make sense.
Aside from being patently unfair, HB 4293 is akin to a “regulatory taking” without cause or compensation. As discussed by the Legal Information Institute, a regulatory taking occurs
“when the government seizes private property for public use. A taking can come in two forms. The taking may be physical, which means that the government literally takes the property from its owner. Or the taking may be constructive (also called a regulatory taking), which means that the government restricts the owner’s rights so much that the governmental action becomes the functional equivalent of a physical seizure.”
Given the size and scope of the current legal hemp market and industry in Illinois, it is understandable why HB 4293 seems like a regulatory taking to hemp business owners on the receiving end of the bill. If it passes, the current hemp industry participants’ activities (ie, their economic rights) will be so restricted as to amount to a “seizure”. This is especially hard to swallow since those “economic rights” will be given over to the state’s marijuana industry without compensation for the taking.
All of this is to say that the Illinois hemp industry is facing an existential moment. Now is the time to contact your state representatives and encourage them to vote “no” to HB 4293. As I often discuss, it is possible and desirable to regulate hemp for safety while fostering a healthy hemp economy for the industry.
Many thanks to Charles Wu and the Illinois Hemp Business Association for all of their hard work on behalf of the hemp industry. Additionally, thanks to Chicago Alderman William Hall, who supports the hemp industry and recently stated: “Hemp is legal. Hemp is not the issue. It is the bad players that are the issues.”
December 31, 2024
Rod Kight is an international cannabis lawyer. He represents businesses throughout the cannabis industry. Additionally, Rod speaks at cannabis conferences, drafts and presents legislation to foreign governments, is regularly quoted on cannabis matters in the media, and is the editor of the Kight on Cannabis legal blog, which discusses legal issues affecting the cannabis industry. You can schedule a call with him by clicking here.
There are a total of 48 state with these federal racketeering schemes. And without them, consumable hemp products would not have become a legal alternative to violating federal drug law. I’m not sure how you fix that by starting with hemp. Get the federal crime out of medical cannabis by getting a waiver under 21 U.S.C. 822(d) and make it work right. See how many people want to use hemp for medical conditions after that adjustment is made. But, for now, hemp has the higher moral ground in a totally immoral environment.
Unfortunately, this opinion piece was not at all balanced – which is no suprise as it is full of talking points from Charles Wu and the Illinois Hemp Business Association. On behalf of the Illinois Independent Craft Growers Association, the trade associtation for the small, licensed cannabis growers in Illinois, we couldn’t disagree more.
Mr. Wu and the IHBA try to make this into an epic David v. Goliath battle, but the reality is that allowing hemp-derived intoxicants to be manufactured, transported and sold outside the strict cannabis regulatory scheme is severely impeding the development of the social equity cannabis businesses in Illinois – this is a David v. David situation. These hemp intoxicants are marketed as cannabis (see, for example, Mr. Wu’s website for his own dispensary and consumption business at https://chitiva.co/collections). These hemp intoxicants are sold to get people high, and in many cases, have THCA and THC content higher than what is allowed to be sold as adult use cannabis in Illinois. These are the same products and it makes no sense to have a lighter regulatory scheme for these products versus what exists for cannabis.
Moreover, as an attorney (like me) you should honest with your description of HB4293. It provides clear pathways for current hemp businesses to get licensed under the Illinois cannabis laws. The problem for the hemp businesses, is that their business model is based on selling identical intoxicants to the licensed businesses but without the expense and headache of the strict regulation that comes with a license. As anyone in the licensed liquor industry if they would be fine with anyone being able to homebrew and then sell in unlicensed retail outlets – without any of the regulations a licenseholder must endure.
One could argue that the real solution here is to make all forms of cannabis legal and unregulated, but until that happens, the policy of the State of Illinois is that intooxicating cannabis products be strictly regulated from seed to sale. That is a far cry from the window dressing regulation the IHBA is pushing. They want to say they are regulated but product testing, packaging rules, and checking IDs is a slap in the face to all of us in the licensed industry that must produce locally, under the watchful eye of 100+ security cameras, must track and report the whereabouts of every plant and milligram of THC, cannot move our products to a dispensary other than in a secured and monitored van with two drivers, and sell our products in a format that is not conducive to a good experience for the patron and, again, under the watchful eye of 100+ cameras. All of this while a hemp-derived can be made anywhere, by anyone, with no security, no tracking, and no dosage limitation, can be freely transported without restriction, and can be sold anywhere and in any manner (such as deli style). No vaults, no cameras, no cloud recordings of all security for 90 days, no dosage limits, no restrictions on methods – nothing.
Intoxicating hemp businesses knew what they were doing when they entered into the business – a business created by an unintended loophole in the Farm Bill. The Farm Bill allows each state to regulate hemp as it chooses and given that Illinois had strict regulations on cannabis, it should be no suprise that Illinois would consider it appropriate to apply those rules to cannabis products made from hemp.
It is unfortunate that Governor Pritzker focused on the product safety issue because while that is a real issue, it is not the primary reason that intoxicating hemp needs to come in line with regulated cannabis in Illinois. Allowing intoxicating hemp products to follow a path that is not identical to cannabis, while being the same as cannabis, is not only unequal treatment but also will likely put an end to social equity and minority participation in the Illinois adult use cannabis industry.
Scott – Thanks for reading my blog and for your thoughtful comments to it. That being said, I disagree with much of what you stated.
First, of all I don’t agree with your proposed “solution” that all forms of cannabis [should be] legal and unregulated. Certainly, I agree that cannabis should be lawful throughout the country (and the world, for that matter). However, I disagree that it should be unregulated. As I discussed in a keynote address earlier this year in which I propose a new vision for cannabis reform, all cannabis should be regulated to ensure that it is not accessed by minors (at least not without parental and/or physician’s consent), that it be manufactured safely, and that it be labeled appropriately and in a standardized manner. (I call this the “Three Pillars” approach to cannabis regulation.)
Second, I disagree with you that the problem is about regulations, to which the Illinois hemp industry is subject. Rather, my fundamental problem with Governor Pritzker’s approach is that it takes away the hemp industry’s ability to sell lawful products while giving this right away to the state’s federally illegal marijuana industry. Let’s be real – it’s not that the hemp industry’s products are “unsafe” – you admit that they are essentially the “identical” products. Rather, it’s that the marijuana industry does not like the competition. I agree that the competition is fairly one-sided in favor of hemp; however, this is not because the hemp industry is illegal, that it sells unsafe products, or that it has advocated for laws that restrict access to the market. Rather, it is because the state’s marijuana laws/regs are onerous. You state that Illinois marijuana industry participants “must produce locally, under the watchful eye of 100+ security cameras, must track and report the whereabouts of every plant and milligram of THC, cannot move our products to a dispensary other than in a secured and monitored van with two drivers, and sell our products in a format that is not conducive to a good experience for the patron and, again, under the watchful eye of 100+ cameras.” That’s all terrible and unnecessary. Rather than join the hemp industry as the path forward for broad and sensible cannabis reform, you take the position that the hemp industry, which is fully lawful, should be shuttered so that the federally illegal marijuana industry can press on under draconian laws and regs. This does not make sense to cannabis reformers like myself who want to expand access to the plant. Your position only makes sense for people who want to preserve the status quo for economic purposes. Notably, similar arguments were put forward when Uber and Lyft started competing with the taxi industry.
Finally, my description of the bill is fair and it is your description that is distorted. You state that it “provides clear pathways for current hemp businesses to get licensed under the Illinois cannabis laws.” Why should hemp businesses have to start over on a different path when they are already operating legally. Pulling the rug out from underneath them and then stating that they can get licensed under an expensive, onerous, and unnecessary regime is cold comfort. It also ignores the fact that getting licensed so that they can sell their products to marijuana distributors still eliminates the hemp retail sector. The fact is that most of your craft cannabis growers will be much better in the long run under rules that are more in line with the current hemp laws than under a marijuana regulatory structure that is already failing in Illinois and throughout the country.
Hemp is the path forward for broad cannabis reform. I sincerely hope that you will rethink your position and help your clients accordingly. (They could/should be selling their craft flower in the national/international market.) Thanks again for reading and commenting. -Rod
It’s absolutely ridiculous and unjust that intoxicating hemp can exist under one set of regulations while cannabis—essentially the same product—is held to a completely different standard. This double standard is absurd. Anyone advocating for this imbalance to continue is only protecting their financial interests, while those who followed the rules, invested in small businesses, and did everything by the book are left to suffer.
If you’re not pushing for a level playing field—if you’re fighting to keep your product in a separate, less restrictive category while others selling the same thing face harsher regulations—you’re exposing your true intentions. Every reasonable person can see this isn’t fair.
Governor JB Pritzker and Kimberly Lightford are just attempting to level the playing field. Either cannabis regulations need to match the standards for hemp, or hemp needs to be brought in line with the CRTA. But no one is advocating to ease cannabis restrictions to match hemp’s leniency—because the goal is to keep hemp in its own protected category at the expense of others.
This needs to change. The current situation isn’t just unfair—it’s unacceptable.
Thanks for reading and commenting, Ted. You state:
“It’s absolutely ridiculous and unjust that intoxicating hemp can exist under one set of regulations while cannabis—essentially the same product—is held to a completely different standard. This double standard is absurd. Anyone advocating for this imbalance to continue is only protecting their financial interests, while those who followed the rules, invested in small businesses, and did everything by the book are left to suffer.”
I agree with your sentiment but come to the opposite conclusion. Namely, the current laws and regulations regarding marijuana in Illinois are onerous, absurd, and unnecessary. The hemp sector provides a much more sane and appropriate approach and I would encourage anyone operating in the federally illegal marijuana sector to pivot into the hemp sector. To be clear, the hemp industry is not perfect. However, as I have discussed in my keynote speech on the future of cannabis, the “hemp path” provides a much more pragmatic approach to cannabis reform than the current state by state recreational marijuana approach. (See, for example, the onerous and ridiculous hurdles that Illinois marijuana industry participants have to navigate as discussed by Scott DH Redmon in his comments.) Eliminating the lawful hemp industry in favor of the current federally illegal recreational marijuana industry is exactly the wrong way to address the current disparity. The only argument in favor of this approach is economic: the existing marijuana licensees, which include some of the world’s largest MSOs, benefit from the existing structure. Small cannabis businesses are on the menu under the current regulatory regime and it’s only a matter of time before they are consumed by the corporate cannabis conglomerates. Meanwhile, the hemp industry supports broad access to the plant by all, especially small businesses and consumers. -Rod