Capitol Report | Spring 2018
High Times Ahead in Illinois?
State legislation proposing expanded legalization of marijuana draws consideration.
Marty Green, Esq.
ICPAS VP of Government Relations
When enacted in 2014, Public Act 98-0122 created Illinois’ Compassionate Use of
Medical Cannabis Pilot Program Act, a four-year program allowing qualified patients with
specified illnesses to use up to 2.5 ounces of medicinal marijuana every two weeks. Central
to the pilot program is regulatory oversight of growers, dispensers, and patients by the Illinois
Department of Agriculture, the Illinois Department of Financial and Professional Regulation
(IDFPR), and the Illinois Department of Public Health. In fact, the 60 licensed dispensaries
disbursed throughout the state are required by the IDFPR to closely control inventories and
submit audits of inventory completed by CPAs. Growers and dispensaries also pay a 7 percent
privilege tax, and patients pay a 1 percent tax on purchases.
While the pilot has since been extended to 2020, its infancy began during the Obama Administration.
Despite marijuana being an illegal Schedule 1 drug under the Federal Controlled
Substance Act of 1970, The U.S. Department of Justice in 2013 issued a non-binding policy
memorandum from then Deputy Attorney General James M. Cole, aka the Cole Memo,
essentially directing federal authorities to refrain from prosecuting marijuana offenses in states
where the drug is legal under state laws. The Obama-era Treasury Department also issued
guidance to banks to serve licensed marijuana businesses.
However, on Jan. 4, 2018, U.S. Attorney General Jeff Sessions withdrew the Cole Memo, and
directed U.S. attorneys to follow the “well-established principles that govern all federal prosecutions,”
including weighing “all relevant considerations of the crime, the deterrent effective
of criminal prosecution, and the cumulative impact of particular crimes on the community.”
His message is a stark warning that federal law still trumps state law under the supremacy
clause as upheld by the U.S. Supreme Court in Gonzales v. Raich (2005)
, which ruled that
the federal government can prosecute marijuana offenses under the commerce clause.
Yet, there’s conflict even at the federal level. U.S. Secretary of the Treasury Steven Mnuchin
does not want to withdraw marijuana business guidance previously provided to banks. It also
remains uncertain if Congress will lift restrictions on the Drug Enforcement Administration’s marijuana enforcement efforts in states that have legalized
marijuana use or take larger steps in reconciling the conflict
between federal and state laws by amending the Federal
Controlled Substances Act of 1970 to remove marijuana from the
Schedule 1 drugs list.
Meanwhile, on the heels of Sessions reversing the U.S. Department
of Justice’s “hands-off” policy toward state-legalized marijuana
use, legislation has been introduced in the Illinois General
Assembly to further expand marijuana legalization.
Senate President Pro Tempore Don Harmon (D-39, Oak Park)
introduced Senate Bill 336, which would extend medicinal marijuana
usage to opioid users. The impetus is to provide users a safe
alternative to highly addictive and often deadly opioids. This bill
saw early movement, advancing out of the Senate Executive Committee,
as there are strong medical arguments that medicinal marijuana
helps curb opioid addiction and abuse.
Two other bills propose legalizing the recreational use of marijuana.
House Bill 2353 introduced by Rep. Kelly Cassidy (D-14,
Chicago), and Senate Bill 316 introduced by Sen. Heather Steans
(D-7, Chicago), would legalize the private possession of 28 grams
of marijuana by anyone over age 21. Both bills also would require
all cannabis products to be regulated and taxed by the state and
tested for potency and contaminants; permit local jurisdictions to
opt out; allow employers to not hire marijuana users; and make it
illegal to drive under the influence of marijuana. Cassidy and
Steans opine that marijuana prohibition has not worked, allowing
for the underground market and criminals to thrive. They estimate
that recreational marijuana legalization could produce up to $700
million a year in new tax revenue.
A hybrid proposal has also emerged in the introduction of Sen.
Bill Cunningham’s (D-18, Chicago) Senate Bill 2275, or the Marijuana
Legalization Referendum Act. This bill would pose a
statewide advisory referendum question to Illinois voters during
the upcoming November election to gauge support for or against
State political and legislative dynamics will ultimately determine
if these proposals see the light of day. All the Democratic candidates
for governor support legalizing recreational marijuana in
some form. Gov. Bruce Rauner stands in opposition but has previously
signed a marijuana decriminalization bill. Opposition also
looms from the Illinois Association of Chiefs of Police and other
law enforcement organizations who argue the need for studies on
the impact of marijuana legalization in other states.
However, Illinois is not alone in moving forward; more than 30
states have legalized medicinal marijuana use, and eight states
allow recreational marijuana use. And, waiting at the busy intersection
of conflicting of state and federal laws are CPAs, who are
increasingly being called upon to make sense of all of this in order
to serve the growing “legal” marijuana industry.
Author’s Note: This column includes my personal observations of the
evolution of the legislative environment and are not necessarily the
views of the Illinois CPA Society.