HB 5452 was introduced last month in Illinois with the ambitious goal of bringing hemp under the Illinois Liquor Control Act (ILCA).

The bill proposes to rename the law, the Liquor and Hemp Products Control Act and would establish the Hemp Products Commission as a division of the Illinois Liquor Control Commission (ILCC).

There are many unique similarities between liquor regulation and proposed hemp regulation. For example, hemp would be regulated not only on the state but also the local level. This would allow localities to opt out of selling hemp.

The bill would also provide the localities the power to suspend and revoke licenses and these sanctions like in the ILCA would permit appeals to the state commission.

For reporting requirements, the bill would propose a 3-year record keeping requirement which matches the ILCA requirement. And similar to the liquor field, a retailer would report sales tax by the 15th of each month.

What is different

Because this is a new category of product, the legislation must go into more detail on what constitutes hemp and must provide more detail on labeling requirements. Typically, these are handled by the TTB, but with a lack of federal guidance, the state is stepping in.

For licensing approval, the state is required to approve a license application within 14 days, there is no mandatory requirement in the ILCA presently.

What is interesting

Although maintaining a licensing system for all three-tiers, the legislation blurs the lines on vertical integration. Under the legislation a hemp products distributor can make retail sales and a manufacturer can sell directly to a retailer.

The goal of the legislation seems to re-create the liquor licensing structure but without the mandated rules enforcing strict vertical integration.

Takeaways

There is a huge hole of ambiguity with the federal government not deciding what they will do by the end of the year deadline. States seem to be stepping into the gap albeit with different approaches.

Eventually, it will all shake out, but we are getting a glimpse of the state actions before everything comes down!