This story was published with permission from Crain’s Chicago Business.
Gov. JB Pritzker plans to make the case Friday for the Illinois House of Representatives to pass a law to crack down on intoxicating hemp during the lame-duck session next month.
Pritzker has said he favors regulating hemp-based products, also called synthetic marijuana, that are intoxicating. Hemp, a cousin of the cannabis plant with very low levels of THC, the chemical associated with marijuana’s high, was legalized under the 2018 U.S. Farm Bill before Illinois legalized recreational marijuana.
People soon began processing the hemp to concentrate the levels of THC, resulting in products generically known as delta-8. Unlike marijuana, they’re not regulated or tested. Products such as gummies have shown up on shelves of corner stores, smoke shops and gas stations — many of them with far higher concentrations of THC than what is allowed in legal cannabis.
“I am very interested to hear what the Governor has to say on Friday. This will be the first time we’ve heard him take a public position on the issue. I want to continue the conversations with the caucus and any other stakeholders. At the end of the day we want to get it right.”
The governor’s office declined to comment.
The problems with delta-8 and other synthetic cannabis products goes beyond public safety. The state spent years setting up a recreational- and medical cannabis industry with a limited pool of growers and dispensaries. Applicants spend millions getting into the business, and the state taxes the products at more than 30%, which produces nearly $500 million in annual revenue.
Intoxicating hemp products threaten to undermine the regulated cannabis industry that has been seen as one of Pritzker’s major legislative accomplishments.
Pritzker’s move to encourage state legislators to act also comes after Chicago Ald. Will Hall proposed that the city tax hemp products as it searches for new revenue to avoid increasing property taxes.
Eighteen states have banned intoxicating-hemp products such as delta-8. Several Chicago suburbs have implemented their own bans.
Morgan Paxhia, a cannabis investor at Poseidon Investment Management, says the competition from the so-called “gray market” of intoxicating-hemp products is the biggest threat to the legal cannabis industry because it’s fueling more of the decline in marijuana prices than over-supply coming from legal competitors.
The hemp industry has opposed the regulation passed by the Senate, saying it likely will put many of them out of business. Along with smoke shops and corner stores, there are also are bakeries and cafes that sell products infused with THC derived from hemp.
“We ought to regulate it to the point of safety where it’s tested, labeled and taxed,” says Rep. LaShawn Ford, a Democrat from Chicago who opposed the bill and has supported the hemp industry. “We have to eliminate the high-potency levels. Banning it doesn’t eliminate them. We could do the same with delta that we did with cannabis.”
Ford and others say the bill didn’t get called for a vote during the regular session last spring because the votes weren’t there. That could change if Pritzker makes a push for the bill.
“If the governor gets involved, he may be able to convince the number of people needed to pass it,” Ford says.
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