Chicago’s mayor pitches new hemp-based business license to City Council members who were skeptical. MEDCAN24

Justin Laurence is the author of this article, which was republished by Crain’s Chicago Business. 

City Hall has officially taken up the fight for hemp regulation. Administration officials have begun laying out an enforcement and licensing scheme. Opponents warned that if hemp-infused products are legalized, the minority-owned cannabis stores in the city will be wiped off the map.

The city has yet to unveil a comprehensive regulatory framework to address concerns about where intoxicating hemp products are manufactured and how they are sold — despite resisting efforts at the state level that some argued would create a de facto ban on hemp gummies, vapes and other products with delta-8 and delta-9. The relative affordability and availability of these products has led to their popularity.

Cannabis and hemp are essentially the exact same plant. However, hemp contains very little THC – the chemical that gives marijuana its high. After the 2018 Farm Bill, hemp could be grown with 0.3% of THC. But people concentrated it into synthetic marijuana (also known as delta-8).

Mayor Brandon Johnson helped defeat state legislation to regulate these products, a bill that was approved by the Illinois Senate in the spring but was not called for a vote in the House. Johnson and his City Council allies want to preserve a potential new tax revenue stream, while seeking to impose stiffer standards on the industry without banning intoxicating hemp products or, like the state bill, limit their sales to state-licensed cannabis dispensaries.

Some opponents claim that the products have not been tested and are being marketed towards children. Cannabis operators, meanwhile, say if hemp products are legitimized, they should be held to the same strict standards as marijuana — which is mandated to be grown in Illinois and is closely monitored from farm to the point of sale.

There was no estimate of tax revenues provided at the meeting.

“Licensing and regulation will provide businesses with the stability and resources needed to invest confidently, drive, innovation and create jobs,” said Ivan Capifali, the city’s acting commissioner of the Department of Business Affairs & Consumer Protection.

Capifali said businesses selling hemp-derived cannabinoid products such as delta-8 and delta-9 would be required to have a city-issued hemp license, with the application process similar to the existing tobacco license — a standard that is much less restrictive than a state-issued cannabis license.

Aldermen in the locality would receive notice about a possible license and be able to give input regarding hours of operation. The shops would be prohibited within 100 feet from daycares and primary schools. High schools are also restricted to 500 feet.

Additional requirements include:

• Additional location restrictions for smoke shops permitting on-site consumption

• Prohibition on sales to anyone under the age of 21

• Point-of-sale warning information to educate consumers on potential risks

• Product and labeling requirements at the wholesale level

• Maximum concentration limits

• Prohibition on packaging geared towards children, including mimicking existing candies and cartoon characters

Chicago Police Department (CPD), Business Affairs team, and Department of Public Health will share the enforcement power that includes:

• A three-strike rule on bad actors

• Scalable fines

• License suspension and revocation powers

• Ability to confiscate illegal products

• Sting operations to monitor sales to minors

Capifali said to the committee that by taking the initiative and regulating this industry, “we can create jobs and drive sustainable growth, while improving the quality of living of our citizens, all the while prioritizing their health and safety.”

She fears that without regulations, the products will continue to be sold. Ige acknowledges that, in general, the city does no monitor manufacturing for any consumer products and is looking to work with Cook County or state to accomplish this.

The City Council members focused on their ability to control a product on its own, without the assistance of state or federal governments.

“We inspect food.” Ald. said that we test for the presence of chicken by comparing it to standards. Bennett Lawson, 44th. The city does not have the capability to do that.

Lawson warned that the process of converting hemp to an intoxicating substance sought after by consumers can be fraught with dangers.

I’m concerned as well about how much it will cost to get this set up,” said he. We are really setting ourselves up for a rabbit hole if it takes a long time to hire chemists and find them to do the testing.

The new alderman. William Hall (6th), who led the efforts to regulate the sector in the city, presided at the meeting. He said that “Prohibition was not the solution.”

“Nobody objected about safety regarding labels, security concerning content, and safety for those aged 21 or younger,” said he.

Hall stated that the administration will go back to drawing boards after the hearing today and hopes to have a draft ordinance ready for voting by spring.