Regulatory Alert

CURRENT PROPOSED STATE OF ILLINOIS RULES AFFECTING SMALL BUSINESS

If any of the following proposed regulations impact your business, let us know!  Click here to submit comments on how the proposed rulemakings will impact your business or industry.   

Following are proposed rules of possible interest to small businesses published in the Illinois Register.  During the comment period, individuals have an opportunity to express their support or opposition to the rule. To submit comments or to learn more about the proposed rules, contact Katy Khayyat at the Department of Commerce and Economic Opportunity Business Information Center via e-mail at Katy.Khayyat@Illinois.gov  or call 800.252.2923 or 217.558.0190. 

To get more information on Illinois Rules and Regulations, how to file a complaint about a burdensome or excessive state rule, go to www.ilsmallbiz.biz/regflex
 

The Department of State Police proposed rules which will impact individuals and businesses licensed to sell firearms:             

The ILLINOIS STATE POLICE proposed a new Part titled Firearm Dealer License Certification Act (20 IAC 1232; 44 Ill Reg 2446) implementing Public Act 100- 1178, which requires all Illinois holders of a Federal Firearms License (FFL) to additionally receive certification from the State in order to sell, lease or otherwise transfer firearms. This proposed new Part replaces a previously proposed rule (43 Ill Reg 9084) that was withdrawn last week.  A companion emergency rule, effective 1/3/20 for a maximum of 150 days, appeared in the 1/17/ 20 Illinois Register at 44 Ill Reg 1681.  Clarifications The new Part includes new and revised definitions clarifying who is considered to be engaged in the business of dealing, selling, leasing, or otherwise transferring firearms with the principal objective of livelihood and profit, which makes them subject to the Act and this Part. Entities excluded from this definition and NOT subject to these rules include: — gunsmiths who merely service or repair firearms and return them to the customer; — collectors of firearms as curios or relics; — firearms manufacturers or importers who do not sell, lease or transfer them at wholesale or retail to individual purchasers; pawnshops that acquire Peremptory Rule firearms only for bailment; and — persons/entities engaging only in transactions not subject to a State or federal background check. A "principal objective of livelihood and profit" means that the person engages in the sale/transfer of firearms as an income-generating business. It does not include persons whose primary objective is to improve or liquidate a personal collection, nor does it include persons who regularly purchase and dispose of firearms for criminal purposes. Applications Every FFL licensee shall file with ISP a copy of its FFL, along with a sworn affidavit indicating that the license is currently valid and belongs to the licensee. This State certification must be renewed every 3 years when the FFL is renewed. ISP may, in lieu of requiring an affidavit, verify the validity of an FFL via any authentication system or website approved by the federal Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Applicants for certification must also submit an affidavit listing the name and Firearm Owner's Identification Card (FOID) number of each owner, employee, or other agent who sells or transfers firearms for the licensee and attesting that each of these persons is at least 21 years old, holds a currently valid FOID card and (if a certification is being renewed) has completed the training required by the Firearm Dealer License Certification Act. Fees for FFL licensees without a retail location, the application fee is $300 for initial certification and $100 for a renewal certification. For licensees with retail locations, the application fee is $1,200 for initial certification and $500 for renewal. Total fees for certification of multiple licenses (e.g., retail stores at different locations) cannot exceed $40,000. Initial certification fees for new applicants who held current FFL licenses as of 1/18/19 shall be prorated based on the number of months remaining on the applicant's current FFL. Overpayments will be credited toward the cost of the licensee's next renewal or may be refunded to the licensee upon written request. Inspections All certified licensees (CLs) shall allow inspection of their place of business by ISP and other law enforcement agencies during all hours of operation when firearms are sold, leased or transferred. All records, documents and firearms shall be made accessible upon request of ISP or the LE agency. No more than one unannounced inspection may be conducted per year without good cause. A CL that is not open to the public, does not keep regular business hours or operates by appointment only shall advise ISP in writing of its hours of operation. Investigations ISP may initiate an investigation into a licensee when requested by a local, State or federal law enforcement agency or prompted by a citizen complaint submitted through ISP's website. Licensees must respond within 24 hours to any request for information made by ISP to determine the disposition of one or more firearms as part of a criminal investigation. Certified licensees may continue to operate during the course of an investigation or hearing unless the ISP Director determines that the public interest, safety or welfare requires emergency action. Security No later than 1/2/20, CLs that maintain an inventory of firearms for sale or transfer must be connected to an alarm system or service that notifies local law enforcement of any unauthorized intrusion. This system must include features such as duress/holdup silent alarms and backup electrical power. By 1/2/21, all CLs operating retail locations must have a video surveillance system in place. This system must monitor all entrances and exits and any inside areas where firearms are stored, handled, sold or transferred. Video surveillance records and sound recordings obtained from them must be retained for at least 90 days. Records CLs operating retail locations on or after 1/2/20 must use electronic-based recordkeeping for all acquisition and disposition records currently required by federal law. The recordkeeping system must be searchable by the name of the purchaser, manufacturer or importer; the address of the purchaser; the serial number of the firearm; the acquisition date of the firearm; or the ATF transaction serial number. This system must also track any corrections or amendments to original entries and must be stored on a server or physical storage device that belongs to the licensee, or at a host facility (e.g., cloud storage or remote server) based in the U.S. and subject to U.S. legal processes. Retail sales and purchases must be recorded within 24 hours after the transaction. Shipments from manufacturers or wholesalers must be recorded within 24 hours after unpacking or 5 business days after shipping, whichever is earlier. Inventory, acquisition and disposition records must be made available to ISP or local law enforcement upon request. An alternate method of recordkeeping may be used with ISP approval if good cause is shown and the records can be clearly uploaded in a PDF format. Storage CLs with retail locations must develop and submit to ISP (using a form and method provided on the Department's website) their written plans for safe storage of firearms and ammunition during retail hours, after closing, and in the event of a disaster. All inventoried firearms must be kept in a secure gun storage or safety device (e.g., safe, vault, secured room or locked display) and in a location accessible only to specifically authorized personnel. All keys, lock combinations, passwords or other security measures must be accessible only to specifically authorized personnel and ammunition must be stored securely out of the reach of customers. Any loss, theft or diversion of inventoried firearms from a retail location must be reported to ATF and local law enforcement within 48 hours and a copy of the notification must also be submitted to ISP. Signage Each location where a CL conducts business must post two signs (templates are provided in the rule and at ISP's website). One sign must notify patrons that the premises are under video surveillance and that their images may be recorded. The other sign must advise patrons that storing or leaving unsecured firearms where children can access them, selling or transferring firearms to someone else without receiving approval from ISP, and failing to report the loss or theft of a firearm to local law enforcement within 72 hours are unlawful. Training Every CL and employees who sell or transfer firearms must complete ISP-approved training (at a minimum, covering materials made available via the ISP website or other means) prior to certification and annually thereafter. Newly hired employees must complete this training before selling or transferring any firearms or ammunition. The CL must submit an affidavit to ISP verifying that the licensee and any applicable employees have completed this training. Penalties and Appeals Disciplinary actions for any violation of the Act or this Part may include suspension or revocation of license certification, refusal to renew or restore a certification, or a reprimand. Additionally, a fine may be imposed based on the seriousness and frequency of the violation. Fines range from a maximum of $200 for a first-time petty violation up to $10,000 per offense for repeated major violations. Procedures for notifying CLs of violations and for CLs to request hearings or appeals are included in the Part. Those affected by this rulemaking include individuals and businesses licensed to sell firearms and local law enforcement entities.

  • Please note:  A public hearing on this proposed rule is scheduled for Thurs. Feb. 20, at 1:30 p.m. in the Auditorium of the Howlett Building, 501 S. Second St., Springfield (immediately south of the Capitol).  Persons wishing to speak at the Feb. 20 hearing must submit their names and the organizations they represent to ISP.Rulemaking@illinois.gov in advance of the hearing. One member from each group may speak for a maximum of 3 minutes.

Bottom Line:  The proposed regulations implement the Firearm Dealer License Certification Act by establishing an application process for individuals and entities subject to regulation under the Act, describing enforcement mechanisms by law-enforcement agencies, and identifying licensee obligations relating to security and storage plans, record-keeping requirements, and training mandates. Additionally, the proposed regulations set forth the fee schedule for license applicants and disciplinary fines and sanctions for violations of the Act. Finally, the proposed regulations create administrative processes for investigating alleged violations of the Act and establish an appeal process for licensees and applicants to formally challenge determinations of the Illinois State Police.

Questions/requests for copies/ comments through 3/23/20: Yvette C. Loizon, ISP, 801 S. Seventh St., Suite 1000-S, Springfield IL 62703, 217/782- 7658.   You may also click here to submit comments to the Department of Commerce Office of Regulatory Flexibility.    This rule is open for public comment until 3/23/20.

***

The Illinois Gaming Board proposed rules which will impact entities licensed under the Sports Wagering Act that qualify as small businesses:  

The ILLINOIS GAMING BOARD adopted emergency amendments to the Part titled Sports Wagering (11 IAC 1900; 44 Ill Reg 2900) effective 1/28/20 for a maximum of 150 days. An identical proposed amendment appears in this week's Illinois Register at 44 Ill Reg 2618. The emergency rulemaking adds further provisions to the Part (originally adopted by emergency rulemaking effective 1/ 3/20) concerning advertising and marketing; prohibited conduct; competitive bidding for licenses; recordkeeping; tax payment; conduct of wagering; equipment, testing, and facility requirements; and self-exclusion provisions for problem gamblers.

Advertising

Sports wagering licensees may not advertise wagering to minors or to any audience where the majority of viewers/participants are presumed to be under 21. Advertising must also provide contact information for compulsive gamblers seeking help. Signage must be posted on the premises of each licensee with instructions on how to access the IGB self-exclusion program and advising patrons that they must be 21 or older. 

Prohibited Conduct

Allegations of prohibited conduct may be reported anonymously to IGB on its website. If, after a preliminary investigation, the IGB Administrator deems the allegations credible, the Administrator shall refer the allegations to an appropriate law enforcement agency. Credible allegations involving prohibited conduct by athletes shall be referred to the appropriate sports governing body. Persons prohibited from wagering include those who are under 21 or are not physically located in Illinois at the time they place a wager; persons who have enrolled in the self-exclusion program; athletes, coaches, referees, trainers, and others who have access to nonpublic information regarding an athlete or team; and key persons or employees of a master sports wagering licensee and their immediate family/household members. Wagers cannot be placed on minor league events, K12 school sports events, or on collegiate events involving teams or individuals from Illinois, but wagers can be made on the final outcome of a collegiate tournament or series in which an Illinois participant is involved provided the wager is not on the Illinois participant.

Prohibited Wagering

IGB may prohibit certain types of wagering or wagering on specific sports, events, leagues or competitions that would otherwise be permitted if it determines that such wagering would be contrary to the public interest or affect the integrity of the sport or of the wagering industry. Any master sports wagering licensee; professional team, league, or association; sports governing body; or higher education institution may request that IGB prohibit wagering on a particular event or sport for these reasons, and they may also request that a prohibition be lifted. These requests will be placed on the IGB website for public review and comment.

Competitive Applications

Master sports wagering license applicants may apply online. The application period for competitive selection must begin no later than 420 days (14 months) after the first license is issued under the Sports Wagering Act and must continue for 120 days. Information to be submitted during this process includes fingerprints and criminal histories for all key persons (e.g., owners, managers) working for the license applicant. After the application period closes, qualified applicants shall be publicly announced; within 90 days after the announcement, 3 winning applicants will be chosen. Another application period may be opened if fewer than 3 applicants are awarded licenses during the first period. A master sports wagering licensee must be in compliance with the Act and this Part before it begins accepting wagers. The Administrator has authority to suspend any licensee's wagering operations if he or she determines the operation is a threat to the safety or health of patrons or employees, or poses a "significant, imminent danger to the integrity of sports wagering in Illinois".

Placing/Redeeming Wagers

Wagers may be placed or redeemed at a window or counter staffed by a clerk, cashier or other employee of the licensee, or at a self-service kiosk. A kiosk must be supervised by an attendant at all times unless located inside the admission turnstiles of a gaming operation or organization gaming facility. A kiosk cannot accept a wager of more than $100 or redeem a wager of more than $500 without an attendant's intervention. Sports facilities that hold master sports wagering licenses may conduct wagering only within a 5-block or 3,300-foot radius of the facility. Wagers must be made in U.S. currency and documented in the licensee's internal control system. If a wager is placed through a kiosk or cashier, the bettor shall be issued a ticket. Master sports wagering licensees shall redeem any winning ticket they have issued that has not expired (tickets expire 1 year after the conclusion of the event or series that was the subject of the wager). Wagers of $1,000 or less must give the patron the option of being paid in cash or chips; wagers of greater than $1,000 must give the patron the option of being paid by check. Any patron who wins $500 or more must have his or her name checked against the self-exclusion list. Wagers may be cancelled or declared void under specified circumstances (e.g., a contest has been cancelled or a wager was placed with incorrect odds).

Internet Wagering

Online wagering shall only be conducted between a master sports wagering licensee and a patron with a sports wagering account. This type of wagering must occur within 3,300 feet of the property on which the relevant sports facility is located. Master sports wagering licensees must create electronic files and accounts for each internet wagering patron and verify their identities. An account may be suspended if it has a negative balance, if the patron is prohibited from placing wagers, or if the licensee has reason to suspect that the patron is engaging in illegal or suspicious activity. Patrons may voluntarily impose wagering limitations or restrictions on their accounts for no less than 72 hours and no more than 1 year. Tier 2 Wagering

Tier 2 wagering includes any form of betting other than Tier 1 (placing bets in advance of an event solely on its final score or outcome), such as bets placed during an event or on aspects of a team's or individual's performance. Wagers on the individual performance of a minor or on the injury of a competitor are prohibited. Sports governing bodies may supply official league data to licensees under a tier 2 official league data provider license, which can be held either by the governing body itself or by an authorized vendor. League data must be provided under "commercially reasonable" terms. A licensee that believes a league data provider is not operating under commercially reasonable terms may petition IGB for a hearing on the issue.

Self-Exclusion

The Self-Exclusion List established by IGB in 86 IAC 3000 for riverboat and casino gambling may also be used by problem gamblers to exclude themselves from sports wagering. The confidential list may only be distributed to master sports wagering licensees and may not be disclosed to any third party unless authorized by rule or required under a court order. Licensees may not accept wagers or redeem tickets from anyone on the Self-Exclusion List, nor may they send marketing or promotional materials to these persons.

Other Provisions

Other provisions of the emergency rule address information to be included in license applications and ownership records; financial and statistical records to be kept and reported either quarterly or annually; annual and special audits; payment of wagering taxes (15% of adjusted gross wagering receipts, plus an additional 2% in Cook County); surveillance and security requirements; and testing, certification and minimum technical requirements of wagering equipment.

Bottom Line:  The present rulemaking implements the provisions of the Sports Wagering Act (SWA) enacted by PA 101-31, effective June 28, 2019, and amended by PA 101-597, effective December 6, 2019. This is the second proposed rulemaking implementing the provisions of the SWA. The first proposed rulemaking was published in the Illinois Register at 44 Ill. Reg. 84 (January 3, 2019). The present rulemaking governs accounting measures, financial record requirements, commencement of wagering, prohibited wagers, types of events allowed, types of wagers authorized, conduct of wagering, house rules for wagering, internet wagering requirements, sports wagering accounts, responsible gaming limits, reporting prohibited conduct, official league data, wagering equipment requirements, internal controls, wagering locations, sports facilities, self-exclusion program, and many other important issues that will allow sports wagering to be operational in Illinois.

Questions/requests for copies/ comments on the proposed rulemaking through 3/30/20: Agostino Lorenzini, IGB, 160 N. La Salle St., Chicago IL 60601, IGB.RuleComments@igb.illinois.gov .  You may also click here to submit comments to the Department of Commerce Office of Regulatory Flexibility.  This rule is open for public comment until 3/30/20.

***

The following proposed rulemaking will impact cannabis cultivation centers, craft growers and dispensaries:

The DEPARTMENT OF REVENUE proposed new Parts titled Cannabis Cultivation Privilege Tax (86 IAC 422; 44 Ill Reg 2624), Cannabis Purchaser Excise Tax (86 IAC 423; 44 Ill Reg 2643), County Cannabis Retailers' Occupation Tax (86 IAC 424; 44 Ill Reg 2669), and Municipal Cannabis Retailer's Occupation Tax (86 IAC 425; 44 Ill Reg 2682) and proposed amendments to Medical Cannabis Cultivation Privilege Tax Law (86 IAC 429; 44 Ill Reg 2695). These rulemakings implement various tax provisions of Public Act 101-27, some of which have previously been implemented by emergency rule. The new Part 422 imposes a tax of 7% of gross receipts upon the initial sale of cannabis by cultivation centers and craft growers to other cannabis business establishments. Part 423 imposes sales taxes of 10% of the purchase price upon cannabis with a THC level at or below 35%; 20% of the purchase price upon cannabis-infused products; and 25% of the purchase price upon cannabis with THC levels above 35%. Part 424 permits counties to impose additional taxes, not to exceed 3% of gross sales within municipalities and 3.75% of gross sales in unincorporated areas, upon businesses selling nonmedical cannabis. Part 425 permits municipalities to impose their own taxes of up to 3% of gross sales upon businesses selling non-medical cannabis. Taxes imposed under Parts 424 and 425 must be set in increments of 0.25%. Amendments to Part 429 update references to the Compassionate Use of Medical Cannabis Program (formerly "Pilot" Program) and the Cannabis Control Act (formerly the Medical Cannabis Control Act). This rulemaking also updates the information required on applications for registration as a medical cannabis cultivation center; provides that registration lasts 1 year (formerly 5 years) and is renewed automatically unless DOR refuses renewal; and states that registration renewal may be refused if any owner, partner, officer or other significant figure in a medical cannabis cultivation business is in default on any tax payments due to the State. Taxes due under the Cannabis Regulation and Tax Act for adult use non-medical cannabis may be filed on the same return as taxes due under the medical cannabis program. Penalties of $1,000 for the first violation and $3,000 for each subsequent violation may be imposed for failure to keep required books and records or make them available for inspection by DOR.


Bottom Line:
  Questions/requests for copies/ comments on the proposed rulemaking through 3/30/20: Richard S. Wolters Illinois Department of Revenue Legal Services Office 101 West Jefferson Springfield IL 62794 217/782-2844.  You may also click here to submit comments to the Department of Commerce Office of Regulatory Flexibility. This rule is open for public comment until 3/30/20.


*** 

The Secretary of State proposed an amendment which will impact businesses providing title and registration services:

The Secretary of State proposed an amendment to Certificate of Title, Registration of Vehicles (92 IAC 1010; 44 Ill Reg 3341) increasing from $7.50 to $9.50 the fee that businesses offering over the counter title and registration services may charge customers. The fee is in addition to the fee SOS charges for the title, plate or sticker itself.

Bottom Line:  These proposed change to the administrative rule updates the fee participating entities are allowed to assess on customers wishing to take advantage of renewing license plates/stickers at their local businesses who participate in the over-the-counter program. The fee was set at $7.50 six years ago. This 13% increase is intended to offset the increased cost of doing business incurred over the past six years by the vendors participating in the over-the-counter sales of license plates and registration renewal stickers. Having outside vendors selling the plates and stickers greatly reduces the number of individuals who come to SOS facilities for these types of transactions. Therefore, it is in the interests of our office and our customers to keep the over-the-counter sales program financially viable for the vendors.

Questions/requests for copies/ comments on the proposed rulemaking through 4/20/2020:  Pamela Wright Office of the General Counsel, 298 Howlett Building Springfield IL 62756 pwright@ilsos.gov
This rule is open for public comment until 4/20/20. 

***

The Department of Agriculture proposed a regulation will impact cannabis cultivators, infusers, and transporters of adult use cannabis:

The DEPARTMENT OF AGRICULTURE proposed a new part titled Cannabis Regulation and Tax Act (8 IAC 1300; 44 Ill Reg 3586), implementing the Act by establishing licensing and regulatory standards for

cultivators, inf users, and transporters of adult use cannabis and establishing a Community College Cannabis Vocational Pilot Program. A companion emergency rule was effective 1/1/20 at 44 Ill Reg 1466 for a maximum of 180 days. Licenses Newly established cultivation centers may apply for conditional

adult use cultivation center licenses during a 14-day application window to be announced on the DOA website.  Craft growers (cultivation facilities with less than 5,000 square feet devoted to cultivation), infuser organizations, and transporters may submit license applications from 2/14 through 3/16/20.

Information to be included on all license applications includes a detailed description of the facility and its inventory, processing and packaging plans; its proposed operation and management practices; required financial disclosures; and the details of any administrative or judicial proceeding that resulted in any principal officers or board members of the facility being convicted of or pleading guilty to a criminal offense, or having a registration or license suspended or revoked. The applicant must also provide a plan of action for recruiting and hiring minorities, women, veterans and persons with disabilities and, if applicable, evidence of status as a social equity applicant. Employees, agents, principal officers and board members must complete fingerprint background checks and receive identification cards (application fee is $100). The rule also includes numerous specifications for facility production and operations; equipment and facilities; recordkeeping and inventory; product testing, packaging and labeling; security (including 24-hour video surveillance); and disposal/destruction of cannabis waste. Approved pesticides, herbicides, insecticides/repellents and fungicides for use on cannabis plants are listed in the rule. 

Fees

Cultivation centers that receive a conditional license become eligible to receive an adult use cultivation center license after undergoing a DOA inspection and paying a licensing fee of $100,000.  These licenses must be renewed annually with a renewal fee of $100,000. Substantial modifications or alterations to a

cultivation or infuser facility must be approved by DOA with fees of $1,000 to $5,000 based on the extent of the modifications. Each product offered for sale by any cannabis business must also be registered by name with DOA for a $100 fee. 

Selection Criteria

All license applicants will be evaluated on a point system with points awarded for facility suitability, employee training and security plans, cultivation plans, product safety and labeling, business plans and services offered, social equity applicant status, labor and employment practices, environmental plans,

majority ownership by Illinois residents, and a diversity plan.  Bonus points will be awarded for inclusion of an incubator program, substance abuse prevention plan, and education plan for children and teens concerning the potential harms of cannabis use. In the event two or more applicants receive tied scores, remaining available licenses shall be distributed via a random drawing.

Craft Growers

Craft grower licensees will be charged a prorated licensing fee of $40,000 upon initial licensing and upon each annual license renewal. DOA may permit craft growing facilities to expand in 3,000-square-foot increments up to a maximum of 14,000 square feet of growing space. Craft growers may share premises with an infuser or a dispensing organization provided each licensee stores all its cannabis products and currency separately from the other licensees and does not allow the other licensees access to those items. Craft growers must be located at least 1,500 feet away from another craft grower or cultivation center.

Early Approval

Medical cannabis cultivation centers already licensed under the Compassionate Use of Medical Cannabis Pilot Program Act may obtain early approval licenses. An application fee of $100,000 and a business development fee of $250,000 to $750,000 are required with the application.  Applicants must also agree to complete a social equity inclusion plan (i.e., a direct monetary contribution to cannabis business development or job training, or participation/financial investment in a cannabis business incubator program) before the early approval license expires. All early approval licenses expire 3/31/21 and may be renewed (with an additional renewal fee of $100,000) until 3/31/22. After that date, early approval license holders must apply for regular adult use cultivation center licenses.  DOA will also license infuser organizations that directly incorporate cannabis or cannabis concentrate into other products (e.g., baked goods, oils). Infuser organizations and cultivation centers that produce edible products must comply with Department of Public Health rules for food handling and sanitation.  Infuser license applications must be accompanied by a $5,000 application fee and must contain the same information regarding operations, disclosures, social equity status, etc., as applications for cultivation licenses. The initial licensing fee and the annual renewal fee is $20,000.

Vocational Program

Illinois community colleges may apply to participate in the Cannabis Vocational Pilot Program until 7/1/20. Applications will be evaluated with points awarded for faculty experience and credentials; security plan; curriculum plan; career advising and job placement plan; and the percentage of low-income students enrolled at the college.  Program licenses are valid for 1 year and may be renewed for a $50 fee. Community colleges that receive Vocational Pilot Program licensure may began awarding Career in Cannabis Certificates to qualifying students in the 2021-2022 academic year. The certificate program must include courses that allow students to study, work with, and grow live cannabis plants and that instruct students in best business practices, professional responsibility, and legal compliance. Vocational program licensees may not keep more than 50 flowering cannabis plants at one time and their employees and agents must complete fingerprint background checks.

Social Equity Applicants

License applicants with majority ownership by one or more persons who meet any of the following criteria are considered Social Equity Applicants:  — was arrested for or convicted of a cannabis-related offense that is now eligible for expungement; — was the spouse, parent or dependent child of a person arrested/convicted of a cannabis-related offense now eligible for expungement; or — is a resident of a disproportionately impacted area with a high rate of arrests or convictions for cannabis-related offenses under previous laws.  A license applicant with 10 or more employees also qualifies for social equity status if at least 51% of its employees were arrested/convicted of cannabis offenses eligible for expungement or live in a disproportionately impacted area. (Social equity applicants are eligible for low-interest loans and other forms of assistance to start and grow their cannabis businesses.)

Transportation

Craft growers and infusers who do not also have a transport organization license may only transport their products to other cannabis businesses within a specified radius (2,000 feet in Cook County, 2 miles in DuPage and Lake counties, 15 miles in all other counties). Beginning 7/1/20, cultivation centers must also obtain transporter licenses in order to transport cannabis to other cannabis businesses. License applications will be accepted from 2/14 through 3/16/20, and every year thereafter from 2/15 through 3/15. Application fee is $5,000 and the annual licensing fee is $10,000. Transporters may not use commercial motor vehicles weighing more than 10,000 pounds and only persons registered with DOA as transporter agents are permitted in vehicles transporting cannabis or cannabis products. Vehicles cannot contain any identifying markings or logos that bear the business name or that indicate the vehicle contains cannabis.

Disciplinary Action

DOA may suspend or revoke licenses and agent identification cards for failure to comply with any provision of the Act or this Part; failure to comply with special conditions of the license/ID card; failure to file tax returns or pay taxes/penalties due; or failure to properly keep books and records.  Fines of up to $10,000 for transporters and infusers, $15,000 for craft growers, and $50,000 for cultivation centers may be imposed for each violation.  However, the fine will be reduced to no more than $2,000 if the licensee notifies DOA of the violation, initiates an investigation and cooperates fully with DOA during the investigation. Licenses or ID cards may be suspended immediately without a hearing if DOA determines that this action is necessary to protect the public interest, safety or welfare, but a hearing must be held within 30 days after this suspension. 

Bottom Line:  Completes the Department's responsibilities under the Cannabis Regulation and Tax Act, 410 ILCS 705/55-35(b)(1), related to regulating the cultivation of cannabis. The Department rules may address, but are not limited to, the following matters related to cultivation centers, craft growers, infuser organizations, and transporting organizations with the goal of protecting against diversion and theft, without imposing an undue burden on the cultivation centers, craft growers, infuser organizations, or transporting organizations: (1) oversight requirements for cultivation centers, craft growers, infuser organizations, and transporting organizations; (2) recordkeeping requirements for cultivation centers, craft growers, infuser organizations, and transporting organizations; (3) security requirements for cultivation centers, craft growers, infuser organizations, and transporting organizations, which shall include that each cultivation center, craft grower, infuser organization, and transporting organization location must be protected by a fully operational security alarm system; (4) standards for enclosed, locked facilities under the Act; (5) procedures for suspending or revoking the identification cards of agents of cultivation centers, craft growers, infuser organizations, and transporting organizations that commit violations of the Act or the rules adopted by the Department; (6) rules concerning the intrastate transportation of cannabis from a cultivation center, craft grower, infuser organization, and transporting organization to a dispensing organization;  (7) standards concerning the testing, quality, cultivation, and processing of cannabis; and (8) any other matters under oversight by the Department as are necessary for the fair, impartial, stringent, and comprehensive administration of the Act.   

Questions/requests for copies/ comments on the proposed rulemaking through 4/27/2020:  Albert A. Coll, DOA, State Fairgrounds, PO Box 19281, Springfield IL 62794-9281, 217/782-5051, fax 217/785-4505. You may also click here to submit comments to the Department of Commerce Office of Regulatory Flexibility. This rule is open for public comment until 4/27/20.