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Illinois Legalizes Industrial Hemp

October 24, 2018 11:33 am
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By Larry Mishkin, Hoban Law Group, Litigation Practice Group Counsel

Last month, Illinois Gov. Bruce Rauner signed into law Senate Bill 2298, the Illinois Industrial Hemp Act, which became effective immediately. The act allows Illinois farmers, in conjunction with a university or other recognized research group, to cultivate industrial hemp for research and commercial purposes. Industrial hemp is defined as a cannabis plant with a delt tetrahydrocannabinol (THC) concentration of less than 0.3 percent on a dry weight basis.

It was a long time coming for Illinois, which had failed to pass a previous version of the same legislation. This also marked a victory for Illinois' long-forgotten hemp legacy. During World War II the state's hemp farmers rose as leaders in national hemp cultivation after production of vital rope material was cut off from the Philippines.

As any travelers along interstate highways 55 or 57 can attest, Illinois is rich in available, arable land sufficient to support large-scale hemp production.  The state's climate also contributes to a climate well suited for hemp cultivation.

The new law legalizes hemp for a multitude of uses, including the extraction of cannabidiol (CBD) one of many cannabinoids naturally found in both hemp and cannabis; CBD is claimed to offer significant and versatile health benefits. The largest global applications of hemp today are in the production of hemp-derived products in the fiber, textile, cosmetics, food, and paper industries.

Through the act, Illinois joins more than three dozen other states having passed similar legislation including most of the state's bordering neighbors (including Missouri, Indiana, Kentucky and Wisconsin, but not Iowa).  Consistent with the U.S. Agricultural Act of 2014 (a.k.a., the Farm Bill), the act requires all license applicants to identify both a state-approved research partner and academic purpose beyond any other intended commercial purposes.

Recent studies project that the reintroduction of hemp cultivation and production in Illinois could provide close to 1,000 new jobs while generating more than $100 million in annual state revenue. Such economic factors have seemed to persuade both the state legislature and the governor to sign off on the legislation. Doing so helps position Illinois farmers to best take advantage of Congress's expected passage of the pending U.S. Farm Bill of 2018, including Sen. Mitch McConnell's Hemp Farming Act, to remove industrial hemp from the federal government's list of prohibited controlled substances.

Larry Mishkin is Counsel to Hoban Law Group and has nearly 30 years of experience that includes representing groups seeking cannabis dispensary and cultivation licenses in Illinois, as well as business interests ancillary to the medical cannabis market. Larry regularly consults with and counsels persons and groups looking for entry into the medical cannabis industry. He can be reached at larry@hoban.law.

This has been prepared for information purposes and general guidance only and does not constitute legal or professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

For more information on Cannabis Tax, please click here.

The post Illinois Legalizes Industrial Hemp appeared first on New Frontier.

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