“We’re going to have to look at how we might regulate it now that the federal government is limiting it,” Pritzker said at a press conference this morning. “The goal here is to keep our children safe. That really is my number one goal about regulating intoxicating hemp.”
The governor previously pushed for state legislation regulating intoxicating hemp, but it died during the lame-duck session earlier this year.
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. Soon people began concentrating the THC into products ranging from gummies to drinks, competing with regulated cannabis products. Some states have banned such products, while others have tried to regulate them.
"What I wanted was for intoxicating hemp to be regulated the same way that cannabis is in the state,” Pritzker said. “I’ve been disappointed the industry here has been unwilling to accept proper regulation, so now we’ll end up at the table talking about how best to move forward.”
How the battle plays out has important ramifications for the Illinois marijuana industry, which is approaching $2 billion a year in sales and nearly $500 million in state tax revenue. But growth has plateaued, hurt by falling prices and competition from the hemp industry, as well as the illicit market. Pritzker led the effort to legalize recreational marijuana sales, which became one of the key legislative accomplishments during his first term.
Companies that sell hemp-related product fought Pritzker’s plan, arguing that most of the producers and retailers would not survive if they were regulated under the existing framework for cannabis.
Craig Katz, president of the trade group Illinois Healthy Alternatives Association, said Congress is providing a catalyst to the Legislature, and he expects new bills to be proposed in January.
“We have been asking for reasonable, workable regulations that protect children and that allow our industry to thrive for some time. All the Congressional action has done is put us on a clock,” he said. “If Congress had meant to ban our products they wouldn’t have given us 365 days. The point of it was to give us time to get together and work out a solution.”
Chicago-based cannabis company Verano urged Pritzker to pursue a broad ban.
"In closing the loophole created by the 2018 Farm Bill, Congress has taken decisive action that acknowledges that there was never Congressional intent to create the loophole in the first place," said James Leventis, chief strategy and compliance officer. "These products are illegal, untested, attractive to children and not age-restricted and, simply put, are dangerous. We urge the governor to take action to get these illegal and dangerous intoxicating hemp products off the streets as soon as possible and continue his ongoing support of the existing safe and equitable cannabis marketplace he helped create in Illinois."
Insurance rates
Pritzker also renewed his intent for the state to have a say in the amount insurers charge customers in Illinois for homeowners coverage after legislation failed during the recent veto session.
“We’re one of the very few states that doesn’t have any limits on what an insurance company can charge, how they can increase homeowners’ premiums,” Pritzker said today. “I believe we need to move forward looking at that bill that didn’t quite get through the House and see how it might be adjusted so that our Department of Insurance can review the premium increases that State Farm and Allstate and other homeowners insurance companies are charging. Increases like 27% in a single year ought to be reviewed by a state regulator, and that’s all we’re asking.
“We want the insurance companies to show us why it’s appropriate for them to raise rates by 27%. They didn’t do that. All they did was say, well, we had losses so we’re increasing by 27%. We don’t know if the homeowners are being gouged. That’s what it feels like with 27% increases.”
State Farm says it provided actuarial backing for the rate increase that show it collected only $1.00 in premiums for every $1.26 it paid out in claims.
"Instead of tackling the root of the problem — inflation and more weather-related losses that require increased home and community resilience measures — Gov. Pritzker wants to give his appointed insurance commissioner more power to create a less competitive insurance market in Illinois," the company said in a statement. "State Farm supports a competitive insurance market where insurers charge rates that match the risk. The proposed bill in the last session would have created less choice for consumers."
The Illinois Insurance Association called the legislative proposals" unnecessary regulatory overreach" that are unlike those used by any other state.
"Had HB 3799 passed, it could have destabilized Illinois’ insurance market and driven up premium costs by as much as 20% at a time when families are already grappling with soaring inflation and cost of living increases," Kevin Martin, the group’s executive director, said in a statement.
