Hemp-CBD Across State Lines: Illinois

The Agriculture Improvement Act of 2018 (“2018 Farm Bill”) legalized hemp by removing the crop and its derivatives from the definition of marijuana under the Controlled Substances Act (“CSA”) and by providing a detailed framework for the cultivation of hemp. The 2018 Farm Bill gives the US Department of Agriculture (“USDA”) regulatory authority over hemp cultivation at the federal level. In turn, states have the option to maintain primary regulatory authority over the crop cultivated within their borders by submitting a plan to the USDA. This federal and state interplay has resulted in many legislative and regulatory changes at the state level. Indeed, most states have introduced (and adopted) bills that would authorize the commercial production of hemp within their borders. A smaller but growing number of states also regulate the sale of products derived from hemp.

In light of these legislative changes, we are presenting a 50-state series analyzing how each jurisdiction treats hemp-derived cannabidiol (“Hemp CBD”). Each Sunday we will summarize a new state in alphabetical order. So far, we’ve covered Alabama, Alaska,  Arizona,  Arkansas,  California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii and Idaho. Today we turn to Illinois.

Overview. Since 2016, Illinois has limited the cultivation of industrial hemp by the Illinois Department of Agriculture (“IDA”) and institutions of higher learning for research purposes only. However, on August 26, 2018, Governor Bruce Rauner signed SB 2298, which expanded the state’s industrial hemp regulations to cover commercial activity. SB 2298 updated Illinois’ industrial hemp laws to allow individuals and entities to cultivate hemp by registering with the IDA and removed industrial hemp from the definition of cannabis.

Earlier this year, the IDA adopted temporary rules under SB 2298. Under the rules, “Industrial Hemp” means

the plant Cannabis sativa L. and any part of that plant, whether growing or not, with a delta- tetrahydorcannabinol (THC) concentration of not more than 0.3% on a dry weight basis that has been cultivated under a license issued under the Act or is otherwise lawfully present in this State and includes any intermediate or finished product made or derived from industrial hemp.

Production of Hemp and Hemp-CBD Products. Pursuant to Illinois law, only licensed growers and processors may sell or transfer living hemp plants or viable hemp seeds to (1) other IDA licensees, or (2) others outside of Illinois so long as the sale is authorized by a state agency in the destination state.

The IDA also permits the sale and transfer of “stripped stalks, fiber, dried roots, nonviable seeds, seed oils, floral and plant extracts (excluding THC in excess of 0.3%) and other marketable hemp products to members of the general public, both within and outside the State of Illinois.” Note that neither the bill nor the IDA rules define “marketable hemp products.”

However, Section 25 of SB 2298 provides the following provision:

Nothing in this Act shall be construed to authorize any person to violate federal rules, regulations, or laws. If any part of this Act conflicts with a provision of the federal laws regarding industrial hemp, the federal provisions shall control to the extent of the conflict.

Accordingly, because there is no permissive language that allows for Hemp-CBD products and because of Section 25, the sale of these products is illegal at worst, and unregulated at best.

In addition, only registered processors can process Hemp-CBD grown under the program. However, nothing in SB 2298 nor the IDA rules expressly prohibit the introduction of hemp products lawfully processed under another state plan.

Possession. Pursuant to SB 2298, “[n]othing in this Act shall alter the legality of hemp or hemp products that are presently legal to possess or own.” Consequently, the possession of Hemp-CBD products seems limited to those approved by the FDA or that meet the standards set by IDA rules (i.e., containing no more than 0.3% THC and that satisfy other requirements).

Transportation. Only a licensed grower or registered processors may transport hemp so long as the hemp contains no more than 0.3% THC. Note that the IDA rules state that the transportation of Hemp-CBD products is not restricted after sold to a member of the public.

Marketing or Advertising Restrictions. As of the date of this post, the state has not enacted regulations governing the marketing or advertising of Hemp-CBD products.

Bottom Line. Although the production and sale of Hemp-CBD products isn’t clearly authorized or restricted, Illinois is authorizing the cultivation of the crop and has not taken any enforcement actions against these products. For these reasons, Illinois should be considered a hemp friendly state. That being said, there is a possibility that things may change upon the adoption of final rules by IDA.