(The Center Square) – A ban on the sale of intoxicating hemp products by some retailers in Illinois took effect Thursday, forcing some across the state to shut down.
The law also pushes products toward more regulation and heavier taxation as hundreds of businesses challenge the ban’s legality.
Hundreds of businesses won the temporary ability to continue selling the banned products in a court decision days before the law took effect.
Craig Katz, president of the Illinois Healthy Alternatives Association, said the ban won’t impact the roughly 300 businesses represented in the lawsuit until at least Nov. 19 – the day the case will come before a federal judge.
“We have our hearing set in federal court and the temporary restraining order on the 19th, so that’s why that date was chosen,” Katz said. “If she were to take it under advisement and not rule at that time, we would certainly ask that the agreement continue until she does rule.”
If the businesses lose or the temporary block isn’t renewed, the products could only be sold by licensed dispensaries in the state which are more heavily taxed, making products more expensive and harder to obtain.
Before the law took effect, intoxicating hemp products were taxed at the typical 6.25% state sales tax, plus any local taxes. Now the products would be taxed under the state’s Cannabis Excise Tax, which ranges between 10% and 25%, depending on the product.
When signing the law in June, Gov. J.B. Pritzker said the legislation would protect children from obtaining the products while allowing more businesses to become licensed.
“Corporations profiting from this will no longer be able to exploit loopholes to push products that endanger our kids. This new law also cuts red tape and cuts costs for regulated dispensaries by streamlining our licensing process,” Pritzker said.
While the law will make it easier to enter the regulated cannabis industry, many businesses not part of the lawsuit had to close their doors as the law took effect, including Prairie State Hemp – a store just blocks from the state capitol that passed the law.
Some businesses selling hemp products before and after the ban took effect ran steep sales on their remaining product, according to Katz.
Katz also said he’s not against being regulated by the state, so long as it doesn’t just shut out their businesses in favor of major dispensaries.
“In a perfect world, the judge would rule in our favor and then we would go back to the legislature and say ‘Hey look this is what happened here now let’s sit down and pass reasonable full, robust regulations that creates protection for the industry,’ but also achieves the goals that most legislators say that they want,” Katz said.
The ban and challenge comes ahead of a federal ban scheduled to take effect in early December.
