Hemp-derived THC products face uncertain future in Illinois
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The THC beverage aisle at Binny's in the South Loop. Photo: Justin Kaufmann/Axios
Gov. JB Pritzker has threatened to ban hemp-derived THC products in Illinois, a move that is worrying some in the burgeoning industry.
Why it matters: Hemp products, while unregulated, have become big business in town.
The latest: The governor threatened an executive order to ban the products after the state legislature failed to pass any bills regulating the industry.
- He says his goal is to get state lawmakers to work on legislation that would regulate and restrict products. If they can't pass a bill, he'll step in.
Context: Hemp and marijuana are different types of cannabis. Both have the active ingredient THC, the compound that gets users high. But hemp has much less THC than marijuana.
- Hemp-derived THC is legal because of a loophole in the 2018 Farm Bill.
- These products are sold outside official marijuana dispensaries.
Yes, but: Lawmakers and cannabis industry representatives have long complained about the unregulated THC products, including the synthetic Delta-8 and Delta-9 varieties, saying they can be more potent than the label advertises, causing danger to customers.
- The governor and other lawmakers have pointed out that these products lack age requirements and are being marketed to children.
- This has been the focal point of debate at the Chicago City Council, with some alders discussing the possibility of banning the products in their wards.
Reality check: A ban on these products wouldn't be simple. Several small businesses have popped up selling these products, and a blanket ban could have an impact on the rapidly successful THC drink market.
- Several local craft beer companies have navigated the downturn in the beer industry by making hemp-derived THC drinks. Chicago alcohol distributors have also caught on, supplying liquor stores like Binny's and Garfield's. Those stores have recently expanded shelf space to accommodate the product and the customer demand.
Zoom in: Cann co-founder and CEO Jake Bullock says the drinks are made with a much more stringent, organic process than the synthetic edibles and other products found at corner stores and gas stations.
- Cann is one of the first hemp-derived THC drinks in the Chicago market.
- He thinks his drinks and others in the market should be regulated the same as alcohol.
- "The alcohol regulatory system that we set up almost 100 years ago still works really well at preventing issues with bad actors, and also preventing these products from getting in the hands of minors."
If the state gets involved in hemp regulation, Bullock says he's all for it. He cites several states like Florida, California and New Jersey as examples of legislatures that have acted.
- "We're ultimately supportive of legislation," Bullock continues. "We'd like to see a smart, sensible regulatory bill that restricts these products to certain channels, keeps them away from minors and restricts the potency of these products."
Between the lines: Bullock's support is similar to craft beer makers, legal marijuana advocates and even small business operators, but getting their unique positions reflected in one bill has proven challenging for lawmakers.
The bottom line: The governor's threats may finally get the state to regulate hemp products, but the devil will be in the details.
What we're watching: It's unclear if legislation would be introduced during the General Assembly's veto session in October or in next year's spring session.