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Illinois Dispensaries

Illinois’ Compassionate Use of Medical Cannabis Pilot Program Act enables the Department of Financial and Professional Regulation (DFPR) to license up to 60 dispensaries to sell cannabis and cannabis medicine to registered patients and caregivers. Here you will find a collection of articles on the subject.

JCAR has certified all regulations under Illinois’ Medical Cannabis Pilot Program Act, thereby finalizing the rules that will govern the Pilot Program and giving the Departments of Agriculture and Professional and Financial Regulation (DFPR) ability to issue applications for cultivation centers and dispensaries.

Only July 15, JCAR (Joint Committee on Administrative Rules) approved all four separate sets of regulations to carry out the Pilot Program (minutes of the meeting will soon appear on JCAR’s website). Incidentally, none of the Pilot Program regulations were published in last week’s edition of the Illinois Register. Technically regulations do not become effective until published in the Register, but no further changes to Pilot Program regulations should be expected until after the competitive application process for cultivation center and dispensary permits is concluded.

Finalized versions of the regulations (as certified by JCAR but not yet published in the Illinois Register) are available on the State of Illinois’ website devoted to the Pilot Program. The most substantial changes are as follows:

Illinois Department of Public Health, Rules for Medical Cannabis Pilot Program

  • The regulations certified by JCAR contain an entirely new Section 946.275, which provides a procedure for suspending a patient’s Registry Identification Card. Previous versions of the Health Department’s regulations envisioned only the complete revocation of a card upon a violation of the Compassionate Use of Medical Cannabis Pilot Program Act, its regulations, or criminal law.

Illinois Department of Agriculture, Rules for Medical Cannabis Pilot Program

  • The regulations certified by JCAR specify that the $2 million escrow account or surety bond does not need to be submitted to the Agriculture Department until 15 days following the agency’s award of a permit registration to a winning applicant. The first draft of regulations did not specify if this requirement needed to be shown prior to application submission. A later version would have required this item to be shown within 90 days of winning a permit registration. (Section 1000.40(g)(1)(B)(iii)).
  • The regulations certified by JCAR now specify that the Agriculture Department will accept cultivation center applications for only “14 calendar days after the date indicated on the Department’s website as the commencement date for accepting applications.” (Section 1000.100(b)). Previous versions indicated that prospective applicants would have a full 30 days following the agency’s publication of application documents.
  • The regulations certified by JCAR require that any agent or employee of a cultivation center who “applies pesticide on the premises” must obtain a license from the Agriculture Department under the Illinois Pesticide Control Act (415 ILCS 60). To obtain the license, the agent or employee must complete the Vegetable Category Examinations under 8 Ill. Adm. Code 250. Previous versions of the Agriculture Department regulations did not require any agent or employee to obtain a Pesticide Control Act license. (Section 1000.470(c).
  • The regulations certified by JCAR contain an appendix containing an extensive list of authorized pesticides and acceptable concentration amounts. Prior versions of regulations contained no appendix or list of authorized pesticides.
  • The regulations certified by JCAR clarify that a physician may serve as an independent contractor to a cultivation center, “provided the physician’s involvement in the cultivation center is limited exclusively to designing or conducting non-proprietary medical research or studies.” (Section 1290.425(l)). This is an important provision because the Compassionate Use Act contains conflicts of interest rules which prohibit a physician from serving as an employee or board member of a cultivation center of dispensary.

Department of Financial and Professional Regulation, Rules for Medical Cannabis Pilot Program

  • The regulations certified by JCAR contain new language giving DFPR broad discretion to refuse to grant a registration or permit to a dispensary unless it is satisfied that the applicant is composed of reputable individuals who are fit to operate a dispensary. (Section 1290.70(e)).
  • The regulations certified by JCAR clarify that a physician may serve as an independent contractor to a dispensary, “provided the physician’s involvement is limited exclusively to designing, implementing or conducting non-proprietary medical research or studies.” (Section 1290.425(l)). This is an important provision because the Compassionate Use Act contains conflicts of interest rules which prohibit a physician from serving as an employee or board member of a cultivation center of dispensary.

JCAR to address cannabis regulations on Second Notice

Regulations for Illinois’ medical cannabis are on Second Notice and under review by JCAR staffers. Four separate sets of regulations are on the agenda for JCAR’s monthly meeting on July 15, including rules developed by the Departments of Agriculture, Public Health, Revenue, and Financial and Professional Regulation (DFPR).

JCAR is a Joint Committee of Administrative Rules responsible for reviewing regulations promulgated by State agencies to ensure consistency with the enabling law (Compassionate Use of Medical Cannabis Pilot Program Act), and to otherwise ensure that Rules are in line with general standards of administration and law. JCAR is composed of 12 bipartisan Members of the General Assembly, one of whom is Rep. Lou Lang, chief sponsor of the Compassionate Use law.

Working draft versions of the four sets of regulations can be downloaded from the section of JCAR’s website devoted to Rulemakings on Second Notice. These drafts are not necessarily the same as the regulations which the agencies published in the Illinois Register on April 18. Theoretically, the drafts appearing on Second Notice should reflect whatever changes the agencies saw fit to make after evaluating the public opinion responses that were received during First Notice.

  • Illinois Department of Agriculture, medical cannabis regulations, Second Notice: 081000-1408069r02.
  • Illinois Department of Financial and Professional Regulation, medical cannabis regulations, Second Notice: 681290-1408163r02
  • Illinois Department of Public Health, medical cannabis regulations, Second Notice: 770946-1408243r02
  • Illinois Department of Revenue, medical cannabis regulations, Second Notice: 860429-1408319r02

Next action is vote by JCAR members on July 15

All four sets of medical cannabis regulations are on the agenda for this month’s meeting. Likely, JCAR members will vote either a) to certify the regulations for publication of Final Rule in the Illinois Register or b) to extend Second Notice for another 45 days.

After JCAR certifies an agency’s regulations, the agency can finalize them by publishing them in the Illinois Register (published every Friday). Upon finalization of their regulations or sometime after, the Department of Agriculture will publish a Request for Proposals or similar document for prospective cultivation center licensees, and DFPR will do the same for prospective dispensary licensees. It will be in the agencies discretion to publish as soon as possible or to wait for some more appropriate time.

Department of Agriculture regulations indicate that the RFP period for cultivation centers is 30 days, and DFPR regulations indicate that the RFP period for dispensaries is ten days. The law does not require that the two RFP periods occur at the same time. It will be interesting to see what the agencies decide to do.

Joliet City Council hearing dispensary special use permit

Prospective medical cannabis cultivation centers and dispensaries are approaching city councils, village boards of trustees, and county governments all over Illinois. This is necessary because the medical cannabis law requires cultivation centers to be 2500 feet away from residential zones and dispensaries to be located outside of residential zones (plus 1000 feet from schools and child care). In some cases zoning changes or assurances may be sought from the municipal government. And there are a lot of other reasons why it is important to be on good terms with local officials.

I pay close attention to what’s happening all over the state, and the last two weeks have brought a flurry of activity for municipal governments. For example, the City Council of Peoria is meeting tomorrow to consider granting a new type of special use permit for a dispensary operator.

According to MySuburbanLife.com:

“The dispensary would be at 1627 Rock Creek Blvd. in the Rock Run Business Park, near Houbolt Road and Interstate 80.

Fire Management Services needs the special-use permit in order to register with the Illinois Department of Financial Planning for a license to distribute medical marijuana. The developer has not yet selected an operator for the dispensary.”

The newspaper also includes this oddly-worded statement:

Marijuana at the facility would have a low THC content, and generally be distributed in pill, liquid or edible forms, according to Michael J. Martin, a Joliet attorney representing the developers.

I hope that is wrong. It would be too bad for patients who need immediate relief by smoking or vaporizing and too bad for patients with nervous system disorders who require THC for their particular conditions.

More public education is needed on these issues. It is very good that people are beginning to understand that CBD has immense medical value, but people must also understand that isolating CBD is not a good idea. You need THC too!

If you don’t believe me, maybe CNN’s Dr. Sanjay Gupta can help you understand the “entourage effect.”

What other cities and villages are thinking about medical cannabis? Belleville, Jacksonville, Chicago, Champaign, and Rockford, to name a few. And these are just the ones that local newspapers have covered. Obviously unreported conversations are happening everywhere.

It’s officially the future. After 80 years of exile, cannabis is returning to its rightful place in the American pharmacopeia.

Joliet is in District 5…. May the odds be ever in your favor.

Testing of Illinois cultivation centers’ medical cannabis is performed by registered controlled substance laboratories under the Illinois Department of Agriculture Rules published Feb. 7, 2014. Upon harvesting marijuana crops, a cultivation center must segregate the cannabis into homogenized batches so that a laboratory employee may select a random sample.

The controlled substance laboratory performs analysis tests to detect the presence of contaminants including:

  • Microbiological contaminants
  • Mycotoxins (fungus)
  • Pesticide chemical or solvent residue

A cannabis sample passes the microbiological test if it satisfies the standards of Section 1111 of the Unites States Pharmacopeia.

A cannabis sample passes the mycotoxin test if it contains less than 20 uG/KG of Aflatoxin B1, Aflatoxin B2, Aflatoxin O1, Aflatoxin O2, and Ochratoxin A.

A cannabis sample passes the pesticide chemical residue test or solvent residue test if it satisfies the standards of Subpart C of the Environmental Protection Agency’s regulations for Tolerances and Exemptions for Pesticide Residues in Food (40 CFR 180).

The controlled substance laboratory must also conduct an active ingredient analysis.

Laboratory test results stay with a batch as it is packaged into medical cannabis containers or processed into cannabis infused products or edibles. This way a cultivation center is able to provide a dispensary with the testing results of every cannabis medicine product it purchases to sell to registered patients.

A controlled substance lab performing testing of medical cannabis must be independent from the ownership and management of a cultivation center. A lab must be:

“… independent from all other persons involved in the cannabis industry in Illinois, which shall mean that no person with a direct or indirect interest in the laboratory shall have a direct or indirect financial interest in a dispensary, dispensary facility, cultivation center, certifying physician or any other entity that may benefit from the production, manufacture, dispensing, sale, purchase or use of cannabis..”

The Agriculture Department’s regulations also require a controlled substance laboratory to employ at least one person who has either a) a master’s degree in chemical or biological science and two years of post-degree laboratory experience or b) a bachelor’s degree in biological science and four years of post-degree laboratory experience.

DFPR answers FAQs for cannabis dispensaries

Illinois Department of Financial and Professional Regulation has posted a set of frequently asked questions and answers for prospective dispensary license applicants. Generally the FAQs address basic dispensary requirements and the administrative rulemaking process.

Regarding its potential timetable for completing regulations, the agency says:

DFPR has 120 days from January 1, 2014 to file administrative rules with the Joint Committee on Administrative Rules (JCAR). There will then be a First Notice period that lasts a minimum of 45 days. After the First Notice period, there will be a Second Notice period that lasts for a maximum of 45 days with the possibility of a 45 day extension. Once the administrative rules are adopted, DFPR will establish the application process for dispensing organizations.

You can view the FAQs for Illinois dispensaries on DFPR’s website.

Sophisticated information for Illinois cannabis dispensaries

If you find DFPR’s short list of FAQs less than satisfying, please check out this book available on Amazon. Written by an Illinois attorney with expertise in analyzing legislation and regulations, the book features in-depth chapters designed to guide individuals who want to invest in or manage Illinois cultivation centers and dispensaries. The book is without a doubt the quickest and cheapest way to gain advanced working knowledge of the law so that you can begin making plans now, well ahead of the regulations.

The book’s chapter on dispensaries spans 25 pages and is organized into the following subjects:

  • Functions of a dispensary
  • 60 dispensaries, reasonably dispersed
  • Market constraints
  • Location restrictions
  • Security
  • Products and services for sale
  • Interacting with patients and caregivers
  • Employees
  • Principal officers and board members
  • Applying to become a dispensary
  • Ongoing Legal Compliance

Chicago’s plan for controlling the location of medical marijuana businesses would allow cultivation centers and dispensaries to be located only in areas zoned as manufacturing districts. The plan has the support of Mayor Rahm Emanuel and Chairman Ed Burke of the Department of Housing and Economic Development (HED).

If Chicago’s City Council approves the plan, prospective  dispensaries and cultivation centers will have to apply for special use permits through the City’s Zoning Board of Appeals. Prospective operators must locate in manufacturing zones, and they must reserve minimum parking space requirements based upon the size of their facilities. (Mayor’s office press release here).

The City’s Bureau of Planning and Zoning provides an excellent zoning map of Chicago where you can get information about potential facility locations. The text of Chicago’s Zoning and Land Use Ordinances are also available online.

Chicago’s proposed location restrictions are in addition to those already imposed by the State of Illinois’ Compassionate Use of Medical Cannabis Pilot Program Act. The law prohibits cultivation centers from being located within 2500 feet (a half mile) of schools, child care facilities, and areas zoned for residential use. The law also prohibits dispensaries from being located within 1000 feet of schools and child care facilities. These rules are applicable in the City of Chicago.

Plus there are two other huge restrictions imposed by law. First, there can be no more than one cultivation center in each state police district. The City of Chicago is itself a single State Police District, which means only one cultivation center can be located in Chicago. However, there is a bill in the legislature which would amend the law to allow a State Police District to have more than one cultivation center, but no more than two. These amendments have a good chance of passing because they have been attached to relatively uncontroversial  internet lottery legislation (SB 1955) which has already been approved by one chamber of the legislature.

Second, regarding dispensaries, the law requires that up to 60 of them be:

“Geographically dispersed throughout the state to allow all registered qualifying patients reasonable proximity and access to a dispensary.” Section 155(a).

Illinois is a relatively large state, and much of the southern 2/3 of it is rural. But assuming there is as much interest in the southern part of the state as there is in Chicago, the Department of Financial and Professional Regulation may be able to grant only so many dispensary registrations to operators in Chicago.

Are you planning a cultivation center or dispensary? Check out this new book: Illinois Medical Marijuana Law: A Practical Guide for Everyone. It’s a handy reference guide you should keep by your side over the coming months. Get a head start on the competition before the regulations come into effect. Kindle/tablet version also available.

Zoning boards prepare for cultivation centers and dispensaries

Several Illinois cities have begun pondering how to prepare for cannabis cultivation centers and dispensaries in their territory. Some of the most important questions for city, village, and county governments relate zoning. Elected officials who are focused on economic benefits may try to make zoning code changes so that a marijuana company can occupy the area. But officials who are weary of inviting a marijuana company into their community may try to make changes so that such businesses are unable to occupy the area.

The Compassionate Use of Medical Cannabis Pilot Program Act requires cultivation centers to be located at least 2500 feet (half a mile) away from residential zones, schools, and child care facilities (Section 105(c)). Dispensaries cannot be located in residential zone or within 1,000 feet or a school or child care facility. (Section 130(d)).

Naperville is one of the cities already considering the issues. The Chicago Tribune says Naperville’s Planning and Zoning Commission debated a number of ideas last week. By a vote of 7-2, commissioners decided that cultivation centers and dispensaries should be classified as conditional use organizations which can occupy business and industrial zones but only after the Commission reviews each applicant.

The article says Commissioners also voted to allow drive-up windows at dispensaries. It is unlikely, however, that a drive-up window could be in compliance with forthcoming regulations from the Department of Financial and Professional Regulation. A drive-up window is impractical  because dispensaries are required to follow a set of procedures to verify every patient and his or her status as a valid cardholder prior to every transaction. Also, the law is very concerned that dispensaries should be tightly secured and monitored, so DFPR could be reluctant to introduce drive-up windows as another potential point of entry for would-be criminals.

The Tribune article also says Naperville’s Planning and Zoning Commission contemplated whether pharmacies should be able to serve as dispensaries, but this too is something which the law and subsequent regulations are unlikely to allow. For security purposes, dispensaries should be accessible only to registered patients and caregivers. It is therefore unlikely that a pharmacy open to the general public will be able to obtain one of the precious few dispensary licenses.

The following image showing the population centers of Illinois is courtesy of Wikepedia Commons:

Population centers

Population centers

Local government is huge factor when planning location

Choosing the location of a medical cannabis business is proving complicated for prospective cultivation centers and dispensaries in other states. One problem is local government bodies retain power to enact ordinances in their territory. This includes the power to rezone an area so that it becomes suitable for a medical cannabis business, but it also includes the power to make an area completely unavailable for such a business.

Prospective dispensaries and cultivation centers in Connecticut, Nevada, Massachusetts, Colorado, and Michigan appear to receive mixed reactions when they approach municipal bodies. Some local leaders are eager to rezone areas to take advantage of economic benefits a medical cannabis business could bring. But many cities and counties are reluctant to embrace these new types of businesses. The reluctance is partly due to old misconceptions about the dangers of medical marijuana use, but it is also partly due to uncertainty about what sort of regulations, if any, the local government should enact.

After regulations were finalized in Connecticut earlier this month, local zoning authorities are now contemplating their course of action. The City of Windham’s director of code enforcement, Matthew Vertefeuille, says his zoning board could opt to classify dispensaries the same way it classifies pharmacies so that the same rules apply for zoning purposes.

Matthew Vertefeuille, director of code enforcement for the town of Windham, said he would like to meet with other town officials to find out which way the political winds are blowing on the issue. He said a dispensary like a pharmacy is a retail business, but it’s unique because it only sells one product to a defined clientele. He said his local zoning board can decide if they want to treat a dispensary like a pharmacy, but it will be up to them to decide.

He said the dispensary is looking for him to sign off on its application to the state and he’s at a loss for how to handle the situation because his local zoning regulations are “silent” on the topic.

“I don’t know if it would be advantageous to say yes to it or not,” Vertefeuille said.

(The above text comes from an article in CT News Junkie: Local Officials Contemplate Location of Medical Marijuana Facilities).

Meanwhile, the City of Shelton, Connecticut has all but assured it will not host one of the first dispensaries or cultivation centers, following its enactment of a nine-month moratorium. (See news article in Shelton Patch: Shelton: No Marijuana Businesses in City for 9 Months).

But another city in Connecticut, Middletown, has agreed to lease part of a city-owned building to a business that proposes to grow cannabis, assuming the business can win a license from the state. The City Council of Middleton voted 6-3 last month to allow Greenbelt Management to use 15,000 square feet of its Remington Rand building. (See new article in Middetown Patch: Council OKs Medical Marijuana Grow House Lease).

Cannabis cultivation and dispensing different in Illinois

Although the basic model is the same, the size and scope of facilities in Illinois is different than in California and Colorado. Cultivation centers in Illinois must do more than grow and harvest cannabis plants. The manufacture of infused products and edibles must also take place on the premises, and so must packaging and labeling. An Illinois licensed cultivation center is an immense commercial enterprise.

Dispensaries, the retail outlets for medical cannabis, will also look far different than in Colorado, where themes of recreational use seem to dominate the atmosphere. In Illinois, direct competition among dispensaries is limited because qualified patients will be assigned to only one dispensary where they must purchase medicine. As a result, there is less need for a dispensary to focus on creating a unique brand and identity. Furthermore, the customer base in Illinois will be much more restricted than in Colorado because only patients who suffer from specified debilitating conditions can qualify to use medical cannabis during the pilot program. Chronic pain and other mild and generalized conditions are not qualifying conditions under current Illinois law.

Facilities will be markedly different, but still, if you plan to participate in a cultivation center or dispensary in Illinois, then it’s important that you think about how it’s been done in other states. The videos below are a good basic demonstration:

HARBORSIDE HEALTH CENTER

Harborside is the largest dispensary in the world. Harborside operates as a not-for-profit corporation because California law requires it. There are many things about Harborside that make it unique, including free health clinics and wellness classes. There are a few things that are allowed at Harborside that are not allowed under Illinois’ Compassionate Use pilot program. Patients in Illinois are not permitted to purchase cannabis clones or saplings to take home and grow themselves, nor are they allowed to bring in medicine grown at home for the purpose of selling it to a dispensary.

1. First is a segment from a BBC program titled “Cannabis: What’s the Harm?

2. Next is a tour of Harborside, guided by founder Steve DeAngelo, who is perhaps the medical marijuana industry’s most recognized pioneer:

3. Another informative video featuring Harborside Health Center aired on CNN’s Inside Man with Morgan Spurlock. The episode is titled “What is it like to work at America’s largest medical marijuana dispensary?” The video is copyrighted material which CNN has not made available for streaming on the internet (but if you know how to look, you may be able to find an unofficial upload).

SMALLER CANNABIS DISPENSARIES

The dispensaries envisioned by Illinois’ new law are modest, sterile, restricted establishments. There is no place for attitude and sexiness. The basic products are the same as in the other states though, and so is the process of verifying patients and helping them choose the right medicine. So it’s helpful to learn how other dispensaries manage their business.

1. First is Green Cross in San Francisco. Green Cross is a delivery-only dispensary. Illinois dispensaries cannot offer delivery services, but the inventory of products shown here will be very similar.

2. Next is the Herb Shoppe in Colorado Springs.

3. Last, and perhaps more akin to what patients should expect in Illinois, is a concept that Montell Williams favors. This business model has dispensaries looking less like head shops and taverns and more like pharmacies.

60 dispensaries licensed under Illinois MMJ pilot program

Dispensing organizations under the Compassionate Use of Medical Cannabis law in Illinois are retail centers where qualified patients can purchase marijuana products. Up to 60 dispensaries may be licensed, and they should be dispersed throughout the state so that every patient has reasonable access to one.

Only licensed Illinois cultivation centers can supply dispensaries with cannabis products. Dispensaries will likely be allowed to sell accessories and delivery devices, such as paraphernalia for smoking and vaporizing. No more than 2.5 ounces of medical marijuana may be sold to any one patient per 14-day period.

Security will paramount at dispensing organizations:

  • Store front areas must be kept separate from areas where cannabis products are stored.
  • Cameras must be stationed throughout the premises.
  • Software systems must track the inventory and sale of all products.
  • Staff must verify that patients are card carriers registered in the Health Department’s database.

Generally, dispensaries should be careful to be a good neighbor in their community because they remain bound by local ordinances and zoning laws.

In other states, dispensing organizations create a unique atmospheric environment with comfortable furniture and themed décor, but it remains to be seen how much character the regulatory authorities in Illinois will allow during the pilot program.

Illinois’ Department of Financial and Professional Regulation will begin developing its first draft of regulations for dispensaries on Jan. 1, 2014, which is the effective date of the Compassionate Use of Medical Cannabis Pilot Program Act. The first draft of regulations is unlikely to be available for public review until the end of April 2014.

 

Companies that compose a medical marijuana industry

Illinois’ new medicinal cannabis law creates two new types of businesses: cultivation centers and dispensary organizations. A cultivation center is the complex where marijuana plants are grown. It is also the place where the plant’s medicinal ingredients, Cannabidiol and THC (tetrahydracannabinol), are extracted and turned into pharmaceutical products, such as pills, serums, baked goods, and ointments.

A dispensing organization is comparable to a pharmacy, except all the medicine is derived from cannabis. Paraphernalia, including smoking and vaporization devices, are also available. Dispensaries also deal with the public and verify that a patient has a valid marijuana card licensed by the Health Department.

Many other businesses support the industry

There is also great opportunity in the medicinal cannabis industry beyond operating a cultivation center or dispensary.

Security: No one must be able to get into a cultivation center without security clearance, and no product can leave unless it is sold. At dispensaries, store-front areas are accessible to the general public, and lots of valuable product is on the premises, so appropriate measures must be taken to prevent robbery and theft.

Accounting: The Compassionate Use of Medical Cannabis law demands rigorous compliance with rules designed to monitor precisely how much product is growing and at precisely what rate. If your records can’t account for all your cannabis, you will be in trouble with regulators.

Compliance: An entirely new legal framework has been created and a slew of regulations are to follow. These will dictate how you need to run your business, including your banking, security, accounting, product testing, and utilities. Lawyers, advisors, and consultants can help you develop your plan and maintain compliance into the future.

Product testing: Good medicine is knowing precisely what chemicals are being served and in what doses. Some illnesses are best treated by a high ratio of THC to cannabidiol, but others are best treated with a low ratio. And when using extracts to make pills, serums, and other pharmaceuticals, it is imperative to know the precise amounts of each substance in a product. Hence it is necessary to have reliable access to a testing laboratory.

Utilities: A cultivation center consumes large amounts of energy and expels large amounts of waste. Proper accommodations are essential.

Banking: Because medical marijuana is still a rather new and controversial industry, obtaining bank accounts and credit can sometimes be difficult for marijuana industry companies. Proper solutions are essential.

Overview of regulatory model for Illinois medical marijuana

The Compassionate Use of Medical Cannabis Pilot Program Act, enacted Aug. 1, 2013, creates a medical marijuana industry that is conducted entirely within the State of Illinois. This means only marijuana that is grown in Illinois by a licensed cultivation center can be distributed in Illinois.

Cultivation centers

  • The law provides for a maximum of 22 licensed cultivation centers where cannabis plants can be grown.
  • Only one licensed cultivation center is permitted in each of the 22 Illinois State Police districts.
  • The Illinois Department of Agriculture is responsible for licensing, regulating, and inspecting the growing operations of cultivation centers.
  • Cultivation centers may manufacture cannabis infused products on their premises, including food (baked goods), oils, and ointments.
  • Cultivation centers are taxed at a rate of 7% of the sale price per ounce of product.

Dispensing organizations

The law also ensures that all cannabis grown in Illinois remains in Illinois. The law achieves this by allowing licensed cultivation centers to sell their products only to licensed dispensaries.

  • The law provides for a maximum of 60 licensed dispensary organizations.
  • Dispensaries must be located throughout Illinois so that all patients have reasonable proximity and access to one (so they need not all be clustered in Chicago and the surrounding suburbs).
  • Dispensing organizations are licensed and regulated by the Illinois Department of Financial and Professional Regulation.

Patients and Physicians

Among the 20 states which have enacted medical marijuana legislation, Illinois’ legal framework is the most restrictive.

  • Licensed dispensaries are the only places where a patient can obtain medicinal cannabis.
  • Dispensaries can sell medicinal cannabis, paraphernalia, and infused-products only to cardholding patients (or their caregivers) who have a prescription from a physician.
  • A physician can prescribe medical marijuana to a patient only if the patient suffers from a “debilitating condition,” as defined by the Compassionate Use of Medical Cannabis Pilot Program Act.
  • The Illinois Department of Public Health maintains a registry of qualifying patients and their caregivers.

The next step is adopting regulations

The Illinois’ Departments of Agriculture, Public Health, and Financial and Professional Regulation now are working to develop their first drafts of regulations for the various segments of the medical marijuana industry. Rules are unlikely to be finalized until 2014, which means there is now a unique opportunity for interested parties to build new business organizations for the purposes of operating licensed cultivation centers and dispensaries.