Illinois Medical Marijuana Rulemaking Moves Forward, Part III

bald eagle american flag crestThe most detailed of the draft rules and regulations released by Illinois state agencies administering the state’s Compassionate Use of Medical Cannabis Pilot Program come from the Department of Agriculture, which oversees cultivation centers. So it is fitting that some of the finer changes in the latest draft of rules and regulations came from Ag. Though seemingly small, some of these changes do have substantive implications. For Part II of this series go here and for Part I go here.

Here’s an overview of some of the more interesting revisions:

  • Concentrates: After the first round of rules was released, there were questions regarding the forms cannabis could take, particularly in the edibles area. Ag’s newly-updated definition of “medical cannabis” includes concentrates, which encompasses butter and olive oil. This is great news for patients who prefer to cook or bake their own meds.
  • Physicians: Ag tinkered with the level of permissible involvement by physicians. Previously, a physician was allowed to serve on a cultivation center board of directors or as an employee if he or she was not certifying patients for medical cannabis use. The revised rules prohibit physician involvement altogether. IDFPR’s rules, by contrast, allow a doctor to sit on a board or be employed by a dispensary, so long as the fact that the person is a doctor is disclosed, and so long as that doctor is not certifying patients. The reason for the seeming inconsistency is unclear, but we venture to guess that the state wants dispensaries to keep doctors involved with patients, potentially even to the extent they advise patients on what form or strain of medical cannabis to use, but that desire does not extend to doctor involvement in growing the product. We note that it seems that once a patient has a card, a doctor’s involvement at the dispensary location is ok, though IDFPR rules expressly prohibit physicians from conducting exams or making a diagnosis on the premises.
  • Liquid assets: Ag has upped the ante on cultivator applicants, now requiring applicants to demonstrate at least $500,000 in liquid assets, up from $250,000. This increase will be viewed by many as further evidencing the state’s desire for licenses to go to the well-heeled and well-connected, but the new number is really just reflects the kind of capital realistically required to get a grow operation off the ground.
  • Financial responsibility requirement: The requirement that a cultivation center permit holder provide evidence of “financial responsibility” of $2 million (in the form of a bond, letter of credit, or escrow account) to the Department of Agriculture remains in place, but the Department now allows for a phase-out over time of that requirement. Once the cultivation center has become fully operational, the requirement drops by $500,000, and then by another $500,000 after one, two, and three consecutive years of operation. The new proposed rule also provides that the funds will be released if the Pilot Program ends without some legislation to continue it past 2017.
  • Notification to mortgagors, lienholders: Ag wants attestation from applicants that the owner of the land where a cultivation center is proposed to be built knows of the applicant’s purpose, and consents to having a medical cannabis facility there through 2017. Additionally, an applicant must notify mortgagors and lienholders with an interest in the property of what will be going on at the property. Some may complain this is a pain in the neck, but in the end, you are better off letting people know of your plans now, rather than being subjected to a lawsuit by some uneasy lender later down the road.
  • Recall plan: Just as IDFPR sensibly included new rules for recalling unsafe medical cannabis, so too does Ag.
  • Relaxed requirements for applicants on community impact: Among a laundry list of requirements, the prior version of Ag’s rules called on cultivation center applicants to describe the potential impact their business would have on the local community and and on the environment, and to explain their plans to address substance abuse. Now the rules only state that an applicant “may” provide such information. Required or not, we will be providing these details in our clients’ applications. There will be many applications in each ISP district, and concern for your local community is a positive attribute those reviewing your application will like to see.
  • Pesticide usage: There is an entirely new section on the proper use and application of pesticides by cultivators. This appears to be in line with basic requirements of any agricultural business.

Any concerns or comments on the revised proposed rules should be directed to the Department of Agriculture: [email protected]