Edwardsville aldermen discuss marijuana businesses
In preparation for recreational marijuana becoming legal in Illinois on Jan. 1, some towns have said they plan to prohibit its sale, at least one expects to allow it and others are studying the issue.
The new state law allows anyone who is at least 21 to consume cannabis privately, but towns have the option of prohibiting legal sales and other types of marijuana businesses in their jurisdictions.
No new large cultivators can open until 2021, and only if there is sufficient demand. The state law does allow smaller cultivation centers of up to 5,000 square feet, also known as craft growers. In July of 2020, the state may award up to 40 licenses to craft growers, with an additional 60 licenses by Dec. 21, 2021.
Local officials in the metro-east have been discussing whether they will want these types of businesses in their towns. And if so, they must decide where they can locate and whether to levy an additional sales tax.
The Edwardsville City Council is considering an ordinance to prohibit marijuana businesses, but council members during a recent committee meeting voted 2-1 to recommend rejecting it.
“The point has been made, since this is going to be in our community anyway, recreational use, there may be additional law enforcement needs,” Alderman SJ Morrison said. “In my opinion, if we allow it, and tax it accordingly, then at the very least, that quarter-cent home rule that goes towards public safety will be in place if we need to increase expenses.”
City Attorney Jeff Berkbigler said the city could see an additional $200,000 to $500,000 in tax revenue, if a dispensary opened in town.
“It’s not a huge amount, but it’s not a trivial amount either,” Berkbigler said.
A medical marijuana dispensary in another community has asked Edwardsville officials about possibly opening a location in town.
Not everyone on the Edwardsville council is in favor of allowing marijuana sales.
“Why would I want to make it easier for someone to buy cannabis?” asked Alderman Art Risavy. “When your kids are 21, I understand 21 is an adult ... I am not naive enough to not think there are people at home smoking cannabis, but why do we have to buy it here. Why don’t we let them go to Collinsville and get it there?”
Experience with a dispensary
In Collinsville, medical marijuana dispensary HCI Alternatives already operates. Collinsville City Manager Mitch Bair said he expects the City Council will allow recreational sales.
“Informally we talked when the decision was made to authorize medicinal marijuana, we made the expectation that was going to lead to authorization of recreational marijuana,” Bair said. “So we would expect at a minimum that facility would be approved for recreational. We haven’t discussed or haven’t made any decisions on the potential of any other dispensaries being in town or some of the other elements of the legislation being authorized.”
If additional dispensaries are allowed, each one probably would have to obtain a special-use permit, an approval process that would require the City Council’s authorization to make sure the town is protected, Bair said.
He said there hasn’t been issues with crime around HCI Alternatives.
“Nationally there’s not a lot of security issues around dispensaries whether they’re recreational or medicinal,” Bair said. “We didn’t have any concerns at that time and since they’ve been opened, we’ve had no issues with that facility at all.”
Towns studying and researching
Belleville Mayor Mark Eckert said the city staff and attorneys are still in the research phase. They are reviewing the legislation and working on getting questions answered about the new law.
He said the discussion will eventually be brought to council members.
“I also know there’s going to be only so many of those licenses throughout the state. Cook County is going to get a big majority,” Eckert said. “We’re just waiting to see. We’ve been asking some questions. When we get those answers, we’re going to sit down with our two city attorneys and staff and we’re going to sit down and talk through it and then we’ll have something to tell. At this point in time, I don’t have a whole lot of information about how we’re going to handle it, what we’re going to do. We’re not even sure what we’re going to get.”
Fairview Heights also has received inquiries from potential marijuana dispensary businesses about whether the town would allow sales, Mayor Mark Kupsky said.
He expects the council to make a decision by late September or early October.
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Kupsky said that if the city, which is along Interstate 64 and relies heavily on retail sales tax, allows dispensaries to sell marijuana, officials would be selective about where they could locate.
“One of the things we definitely would do, is if we allow it, we would make sure there would be plenty of restrictions so it’s not near schools or churches or those things,” Kupsky said.
“We’re not running, and we’re not just sitting back,” Kupsky said. “We’re taking our time to understand and get our arms around what it means for the city in terms of negative and positive impacts.”
Granite City Mayor Ed Hagnauer said he and the City Council have not discussed the marijuana issue, but suspects they will in September.
He noted the metro-east has to keep in mind that Missouri doesn’t have legal recreational weed.
“We have to look at being the first city coming over into Illinois, we would draw a lot of Missouri people over here (and) whether we want that or not,” Hagnauer said. “Is it going to be a plus for us, or a minus for us?”
Towns just saying ‘No’
Some municipalities around the state have already said they don’t want to allow marijuana dispensaries in their towns. The village of Morton, near Peoria, has already banned the sale of marijuana.
Naperville and Grayslake are considering prohibiting pot sales.
In O’Fallon, City Council members are looking to put a moratorium in place, but also are considering an advisory referendum in March or November 2020 to see how residents feel about the issue.
At a July meeting, City Council members were generally against the idea of allowing dispensaries.
Mayor Herb Roach said city officials are concerned about the city’s image.
“How does the use of marijuana and that have an impact on that, and especially if you’re selling it right in your own community, even though we know, neighboring communities may be selling it and may make some money off of it,” Roach said. “But I think our council is looking at it. It’s not economics, it’s how does it impact, or how does it even set the tone for the livelihood, the style of living that we want in our community or how we want our community to be known.”
A concern brought up during that July meeting in O’Fallon was the city’s proximity to the largest employer in the metro-east: Scott Air Force Base.
David McCarthy, a retired doctor in O’Fallon, expressed a concern about how marijuana use could affect those employed by the base.
“I want to remind everybody that it’s illegal for federal workers and for military to utilize recreational marijuana,” McCarthy said. “This is potentially a career-ending event for civilians as well as military.”
Even though the state’s recreational marijuana law allows towns to make their own zoning decisions, it places a minimum distance between dispensaries of at least 1,500 feet. It was a provision meant to limit the number of dispensaries and to prevent them from spreading all over the place.
If a town government allows a dispensary, it may never see one. The marijuana law limits how many dispensary licenses can be awarded in the state.
Currently there are 55 medical marijuana dispensaries in Illinois. Each will be allowed to sell recreational weed on Jan. 1, and will also be able to get an additional license for another facility.
The state will award up to 75 more dispensary licenses before May 2020.
Of those 75 licenses, up to four could be awarded in the metro-east according to the legislation.
An additional 110 licenses can be awarded after Jan. 1, 2021, for a total of nearly 300 licenses. After Jan. 1, 2022, there could be up to 500 dispensary licenses in total, the legislation said.
Licenses for other marijuana-related businesses such as the craft growers and infusers also will be limited. However, the state law calls for considering whether the business would promote economic development in a disproportionately low-income area.
State Rep. Kelly Cassidy, D-Chicago, who was the lead bill sponsor in the House, said if a community opts not to allow a dispensary in town, it could potentially lose out on local sales tax revenue.
But the town still could receive the law enforcement money that’s collected through state taxes for marijuana sales.
“That’s why we empower local governments to do this and to set their zoning. … Maybe you feel strongly enough to severely restrict it, and that’s within their power,” Cassidy said in an interview last month.
“But in terms of zoning, I think that’s important they get that figured out,” Cassidy said. “You’re going to see as these application waves become available, you’re going to see more and more people looking to locate in places that don’t currently have facilities available.”
If municipalities allow dispensaries within their city limits, they must decide if they will impose an additional local sales tax of up to 3 percent.
Cassidy said she would advise communities not to tax the product too highly right away, let alone the 3 percent cap, because it may push people away from the legal dispensaries.
“If you overtax the product, you actually drive people back to the street market, to the illicit market place,” Cassidy said.
State tax revenue from recreational marijuana will be split among several purposes, including money for local law enforcement, substance abuse and mental health programs, the state’s bill backlog, the state’s annual operating budget, and programs to help underserved communities.
Initial estimates had marijuana generating $58 million for the state in the first year, and then $140 million the second year and eventually up to $500 million a year.
Gov. J.B. Pritzker, who made marijuana legalization one of his central campaign proposals, says he’s not worried there won’t be enough municipalities allowing dispensaries.
“The bill was designed to let towns, cities (and) counties, make their own decisions about whether they want to have marijuana dispensaries available,” Pritzker said. “Remember at the very beginning of the legalization process, medical marijuana dispensaries will actually have licenses for adult-use marijuana, and then it will expand slowly from there. We want to make sure we’re doing this in the right way, that it’s done safely, (and) only people who are legally allowed to have access get access. That’s why it’s been done in that fashion. But over time, there will be towns that choose to have it, towns that choose not to. It’s completely in their control.”