Section 1291.10  Definitions

 

Terms not defined in this Section shall have the same meaning as in the Cannabis Regulation and Tax Act [410 ILCS 705].  Nothing in this Part is intended to confer a property or other right, duty, privilege or interest entitling an applicant to an administrative hearing upon denial of a dispensing organization application.  The denial of a dispensing organization application does not preclude judicial review of the denial.  The following definitions are applicable for purposes of this Part:

 

"Act" means the Cannabis Regulation and Tax Act [410 ILCS 705].

 

"Address of record" means the address recorded by the Department in the applicant’s application file maintained by the Department.

 

"Adult Use Dispensing Organization License" means a license issued by the Department of Financial and Professional Regulation that permits a person to act as a dispensing organization under the Act and any administrative rule made in furtherance of the Act. (Section 1-10 of the Act).

 

"Affiliate" means a person who directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, that person.

 

"Affiliated entity" means any business entity that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the person.

 

"Agent-in-charge" or "AIC" means a person licensed by the Department in charge of managing the dispensing organization.

 

"Applicant" means any person or entity who is applying to the Department for a Conditional Adult Use Dispensing Organization License, Adult Use Dispensing Organization License or an agent, agent-in-charge, or principal officer identification card issued under the Act or this Part, or to be approved as a Responsible Vendor Provider under the Act or this Part.

 

"Application points" means the number of points a dispensary applicant receives on an application for a Conditional Adult Use Dispensing Organization License.  (Section 1-10 of the Act)

 

"Approved Vendor List" means a list of service professionals approved by the Department to work or perform services at a specific dispensing organization. 

 

"Assign" or "Assignment" means granting an allocation of ownership interest or control in a dispensing organization to an existing principal officer or to a non-licensed third party. 

 

"BLS region" means a region in Illinois used by the United States Bureau of Labor Statistics to gather and categorize certain employment and wage data.  The 17 regions in Illinois are: 

 

Bloomington (DeWitt County; McLean County),

 

Cape Girardeau (Alexander County),

 

Carbondale-Marion (Jackson County; Williamson County),

 

Champaign-Urbana (Champaign County; Ford County; Piatt County),

 

Chicago-Naperville-Elgin (Cook County; DeKalb County; DuPage County; Grundy County; Kane County; Kendall County; Lake County; McHenry Count; Will County),

 

Danville (Vermilion County),

 

Davenport-Moline-Rock Island (Henry County; Mercer County; Rock Island County),

 

Decatur (Macon County),

 

Kankakee (Kankakee County),

 

Peoria (Marshall County; Peoria County; Stark County; Tazewell County; Woodford County),

 

Rockford (Boone County; Winnebago County),

 

St. Louis (Bond County; Calhoun County; Clinton County; Jersey County; Madison County; Macoupin County; Monroe County; St. Clair County),

 

Springfield (Menard County; Sangamon County),

 

Northwest Illinois nonmetropolitan area (Bureau County; Carroll County; Jo Daviess County; LaSalle County; Lee County; Ogle County; Putnam County; Stephenson County; Whiteside County),

 

West Central Illinois nonmetropolitan area (Adams County; Brown County; Cass County; Christian County; Fulton County; Greene County; Hancock County; Henderson County; Knox County; Livingston County; Logan County; Mason County; McDonough County; Montgomery County; Morgan County; Moultrie County; Pike County; Schuyler County; Scott County; Shelby County; Warren County),

 

East Central Illinois nonmetropolitan area (Clark County; Clay County; Coles County; Crawford County; Cumberland County; Douglas County; Edgard County; Effingham County; Fayette County; Iroquois County; Jasper County; Lawrence County; Marion County; Richland County), and

 

South Illinois nonmetropolitan area (Edwards County; Franklin County; Gallatin County; Hamilton County; Hardin County; Jefferson County; Johnson County; Massac County; Perry County; Pope County; Pulaski County; Randolph County; Saline County; Union County; Wabash County; Wayne County; White County). (Section 1-10 of the Act)

 

"Bulk cannabis inventory" means cannabis and cannabis-infused products stored in the reinforced vault in clear, heat-sealed or taped shrink wrap bags or sheeting that is labeled with the date the inventory is sealed, the last four digits of the batch number, the number of items contained within the wrapping, and the date the inventory was last counted.  Bulk cannabis inventory is included in the dispensing organization's total inventory available for sale.

 

"Buyer" means a prospective or current dispensing organization intending to buy or receive the license or licenses of a seller in accordance with the change of ownership parameters of this Part.

 

"By lot" means a randomized method of choosing between two or more applicants.

 

"Cannabis" means marijuana, hashish, and other substances that are identified as including any parts of the plant Cannabis sativa and including:

 

derivatives or subspecies, such as indica, of all strains of cannabis, whether growing or not;

 

the seeds thereof, the resin extracted from any part of the plant; and

 

any compound, manufacture, salt, derivative, mixture or preparation of the plant, its seeds, or resin, including tetrahydrocannabinol (THC) and all other naturally produced cannabinol derivatives, whether produced directly or indirectly by extraction.

 

"Cannabis" does not include:

 

the mature stalks of the plant;

 

fiber produced from the stalks, oil or cake made from the seeds of the plant;

 

any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted from it), fiber, oil or cake, or the sterilized seed of the plant that is incapable of germination; 

 

industrial hemp as defined and authorized under the Industrial Hemp Act [505 ILCS 89]. 

 

"Cannabis" does include cannabis flower, concentrate, and cannabis-infused products.  (Section 1-10 of the Act)

 

"Cannabis business establishment" means a cultivation center, craft grower, processing organization, infuser organization, dispensing organization, or transporting organization.  (Section 1-10 of the Act)

 

"Cannabis flower" means marijuana, hashish, and other substances that are:

 

identified as including any parts of the plant cannabis sativa and including derivatives or subspecies, such as indica, of all strains of cannabis; and

 

raw kief, leaves, and buds. (Section 1-10 of the Act)

 

"Cannabis flower" does not include resin that has been extracted from any part of a plant, nor any compound, manufacture, salt, derivative, mixture, or preparation of a plant, its seeds, or resin.  (Section 1-10 of the Act)

 

"Cannabis-Infused product" means a beverage, food, oil, ointment, tincture, topical formulation, or another product containing cannabis or cannabis concentrate that is not intended to be smoked.  (Section 1-10 of the Act)

 

"Collateral" means pledging a license and/or any current ownership interest, such as a dispensing organization license or a principal officer's license, ownership, or interest, in the licenses, ownership, or interest as security against an existing or prospective debt.

 

"Conditional Adult Use Dispensing Organization License" or "conditional license" means a contingent license awarded to applicants for an Adult Use Dispensing Organization License that reserves the right to an Adult Use Dispensing Organization License if the applicant meets certain conditions described in the Act but does not entitle the recipient to begin purchasing or selling cannabis or cannabis-infused products.  (Section 1-10 of the Act)

 

"Conditional License Phase" or "Conditional Phase" means the period after which an entity is issued a Conditional Adult Use Dispensing Organization License prior to the issuance of any associated Adult Use Dispensing Organization License as described in Sections 15-25(e), 15-35(c); and 15-35.10(c) of the Act.

 

"Consultant or Conditional Management Service Agreement" or "CMSA" means any agreement, contract, arrangement, or other type of formal understanding between a conditional licensee or dispensing organization and a management services contractor, where the contractor provides professional staffing, administrative, operational, advisory, management, or other general consulting services to the conditional licensee or dispensing organization in exchange for remuneration.

 

"Department" means the Department of Financial and Professional Regulation.

 

"Director" means the Director of the Division of Professional Regulation within the Department.

 

"Dispensary Applicant" means the proposed dispensing organization name as stated on an application for a Conditional Adult Use Dispensing Organization License. (Section 1-10 of the Act).

 

"Dispense" means to interpret, verify computer entry of, select the cannabis or cannabis-infused product for, prepare and/or hand-deliver cannabis or cannabis-infused product to a purchaser, registered medical patient or caregiver.

 

"Dispensing organization" means a facility operated by an organization or business that is licensed by the Department to acquire cannabis from a cultivation center, craft grower, processing organization, or another dispensary for the purpose of selling or dispensing cannabis, cannabis-infused products, cannabis seeds, paraphernalia, or related supplies under the Act to purchasers or to qualified registered medical cannabis patients and caregivers.  As used in this Part, “dispensing organization” includes a registered medical cannabis organization as defined in the Compassionate Use of Medical Cannabis Program Act [410 ILCS 130] or its successor Act that has obtained an Early Approval Adult Use Dispensing Organization License. (Section 1-10 of the Act)

 

"Dispensing organization agent ID card" or "agent ID card" means a document issued by the Department that identifies a person as a dispensing organization agent, agent-in-charge, or principal officer.

 

"DOA" means the Illinois Department of Agriculture.

 

"Early Approval Adult Use Dispensing Organization at a Secondary Site" or "secondary site" means a license that permits a medical cannabis dispensing organization licensed under the Compassionate Use of Medical Cannabis Program Act as of June 25, 2019 to begin selling cannabis or cannabis-infused product to purchasers as permitted by the Act on January 1, 2020 at a different dispensary location from its existing registered medical dispensary location.  (Section 1-10 of the Act)

 

"Early Approval Adult Use Dispensing Organization License" or "Same-Site Licensee" means a license that permits a medical cannabis dispensing organization licensed under the Compassionate Use of Medical Cannabis Program Act as of June 25, 2019 to begin selling cannabis or cannabis-infused product to purchasers as permitted by the Act as of January 1, 2020.  (Section 1-10 of the Act)

 

"Eligible applicant" means a tied applicant eligible to participate in the process by which a remaining available license is distributed by lot.

 

"Firearm injury" means a gunshot wound or penetrating injury from a weapon that uses a powder charge to fire a projectile.  Weapons that use a power charge include handguns, rifles, and shotguns.  Injuries from air- and gas-powered guns, BB guns, and pellet guns are not considered firearm injuries as these types of guns do not use a powder charge to fire a projectile.

 

"Financial Interest" means any actual or future right to ownership, investment or compensation arrangement, either directly or indirectly, through business, investment, spouse, parent or child, in the dispensing organization.  Financial interest does not include ownership of investment securities in a publicly-held corporation that is traded on a national securities exchange or over-the-counter market in the United States, provided the investment securities held by the person and the person's spouse, parent or child, in the aggregate, do not exceed 5% ownership in the dispensing organization.

 

"HIPAA" means the Health Insurance Portability and Accountability Act of 1996 (P.L. 104-191) and the HIPAA Privacy Rule as found at 45 CFR 164.

 

"Individual" means a natural person.

 

"ISP" means the Illinois State Police.

 

"Laboratory" means an independent laboratory located in Illinois and approved by DOA to have custody and use of controlled substances for scientific and medical purposes and for purposes of instruction, research or analysis.

 

"Limited access area" means a room or other area under the control of a cannabis dispensing organization licensed under this Act and upon the licensed premises where cannabis sales occur with access limited to purchasers, dispensing organization owners and other dispensing organization agents, or service professionals conducting business with the dispensing organization, or, if sales to registered qualifying patients, caregivers, provisional patients, and Opioid Alternative Pilot Program participants licensed pursuant to the Compassionate Use of Medical Cannabis Program Act are also permitted at the dispensary, registered qualifying patients, caregivers, provisional patients, and Opioid Alternative Pilot Program participants.  (Section 1-10 of the Act)

 

"Member of an impacted family", "family member", or "impacted family member" means an individual who has a parent, legal guardian, child, spouse, or dependent, or was a dependent of an individual who, prior to June 25, 2019, was arrested or convicted of, or adjudicated delinquent for any offense that is eligible for expungement under the Act. (Section 1-10 of the Act)

 

"Management Services Agreement" means any agreement, contract, arrangement, or other type of formal understanding between a management services contractor and a dispensing organization where the management services contractor and a dispensing organization where the management services contractor provides professional staffing, such as, administrative, operational, advisory, consulting or management services to a dispensing organization.

 

"Management Services Contractor" means a third-party vendor-contractor entity that provides professional staffing, administrative, operational, advisory, consulting or management services to a dispensing organization.

 

"Notify" means to send via regular United States mail or email.

 

"Onsite Consumption Lounge" means an establishment connected to a licensed early approval adult use dispensing organization at a secondary site or a licensed adult use dispensing organization in which cannabis or cannabis-infused product is heated, burned, smoked, or consumed under section 55-25 of the Act.

 

"Ownership and control" means ownership of at least 51% of the business, including corporate stock if a corporation, and control over the management and day-to-day operations of the business and an interest in the capital assets, and profits and losses of the business proportionate to percentage of ownership.  (Section 1-10 of the Act)

 

"Person" means a natural individual, firm, partnership, association, joint stock company, joint venture, public or private corporation, limited liability company, or a receiver, executor, trustee, guardian, or other representative appointed by order of any court.

 

"Principal officer" includes a cannabis business establishment applicant or licensed cannabis business establishment's board member, owner with more than 1% interest of the total cannabis business establishment or more than 5% interest of the total cannabis business establishment of a publicly traded company, president, vice president, secretary, treasurer, partner, officer, member, manager member, or person with a profit sharing, financial interest, or revenue sharing arrangement.  This definition includes a person with authority to control the cannabis business establishment or a person who assumes responsibility for the debts of the cannabis business establishment. (Section 1-10 of the Act)

 

"Point of Sale System" means a computer system capable of completing cannabis purchases, tracking cannabis inventory, and communicating cannabis inventory to the State Verification System.

 

"Reinforced vault" means a room built to the specifications listed in Section 1291.300(g).

 

"Remaining available license" means a license in a BLS region that has not been awarded by the Department at the conclusion of the scoring process period.  There may be more than one remaining available license in a BLS region.  For example, if four licenses are available in a BLS region and the five highest scoring dispensary applicants receive scores of 245, 240, 235, 235, and 235 points, the applicants receiving 245 and 240 application points will be awarded licenses and the three applicants receiving 235 points may become eligible applicants.  Likewise, if one license is available in a BLS region and there are five dispensary applicants with the highest score, all five dispensary applicants may become eligible applicants.

 

"Responsible Vendor Program" or "Program" means a training course or module offered by an approved Responsible Vendor Provider that provides at least two hours of class instruction on topics outlined in Section 1291.110.

 

"Responsible Vendor Provider" or "Provider" means a person or entity approved by the Department to offer a responsible vendor program and issue certifications pursuant to Section 15-40(k) of the Act.

 

"Responsible Vendor Trainer" or "Trainer" means an individual who is employed or contracted by a responsible vendor provider to provide the instruction for a responsible vendor program.

 

"Restricted access area" means a building, room or other contiguous area under control of the dispensing organization and upon the registered premises with access limited to dispensary agents only, where cannabis is stored, packaged, sold or processed for sale.

 

"Scoring process period" is the period of time between the conclusion of the submission period for a conditional license application and when the Department publishes the names of tied applicants that may become eligible applicants.

 

"Secretary" means the Secretary of the Department of Financial and Professional Regulation.

 

"Seller" means a dispensing organization that intends to change its ownership or sell or transfer its license or licenses.

 

"Service professional" means a person who must be present at the dispensary to perform work, including but not limited to those installing or maintaining security devices, delivering cannabis, providing construction services, and auditing or accounting services, etc. It also means a person who is a prospective buyer or investor in a license who has been approved in a form or manner prescribed by the Department.

 

"State verification system" means a web-based system established and maintained by the State of Illinois that is available to the Department, DOA, ISP, and dispensing organizations for the tracking of the date of sale, amount, and price of cannabis purchased by purchasers.

 

"Tied applicant" means an application submitted by a dispensary applicant pursuant to Section 15-30 of the Act that received the same number of application points under Section 15-30 of the Act as the dispensary applicant's final score as one or more top-scoring applications in the same BLS region and would have been awarded a license but for the one or more other top-scoring applications that received the same number of application points.  Each application for which a dispensary applicant was required to pay a required application fee for the application period ending January 2, 2020 shall be considered an application of a separate tied applicant. (Section 1-10 of the Act)

 

"Top participant" means an applicant drawn by lot in a winning slot such that it has the opportunity to be issued a conditional license.

 

"Victim" means

 

a person injured as a result of a firearm injury perpetrated or attempted against them;

 

the spouse, parent, or child of a person killed or injured as a result of a firearm injury perpetrated or attempted against the person, or anyone living in the household of a person killed or injured in a relationship that is substantially similar to that of a parent, spouse, or child;

 

a person injured while attempting to assist a person against whom a firearm injury is being perpetrated or attempted, if that attempt of assistance would be expected of a reasonable person under the circumstances;

 

a person injured while assisting a law enforcement official apprehend a person who has perpetrated a firearm injury or prevent the perpetration of any such crime if that assistance was in response to the express request of the law enforcement official; or

 

a person who personally witnessed a firearm injury. 

 

The victim must not be the offender in the criminal act and must not have provoked or incited the crime.

 

(Source:  Amended at 48 Ill. Reg. 13377, effective August 20, 2024)

 

Section 1291.11  Granting Variances

 

The Director may grant variances from this Part in individual cases when the director finds that:

 

a)         The provision from which the variance is granted is not statutorily mandated;

 

b)         No party will be injured by the granting of that variance; and

 

c)         The rules from which the variance is granted would be unreasonable or unnecessarily burdensome.

 

(Source:  Added at 48 Ill. Reg. 13377, effective August 20, 2024)

 

Section 1291.15  Dispensing Organization Fees and Renewals

 

a)         Communication with the Department.  The Department will only communicate with the dispensing organization's primary contact, alternate contact, or through an authorized third-party.  The primary and alternate contact information must be different from each other and cannot be the same email address for each.  In order to change its primary or alternate contact information, a dispensing organization must submit a request to change from the current primary or alternate contact email address the Department has on record.  If the current email addresses are inaccessible, the dispensing organization must submit a certification attesting to the inaccessibility and requesting the change.

 

b)         Fees.  The following are the fees for dispensing organizations.  All fees are nonrefundable and all monies collected under the Act shall be deposited in the Cannabis Regulation Fund in the State Treasury.

 

1)         The application fee for a change of ownership or sale or transfer of a license is $5,000 for each license involved in the transaction.  A fee shall be remitted to the Department for each Adult Use Dispensing Organization License or Registered Medical Cannabis Organization License involved in the transaction.

 

2)         The application fee for an exception to a change of ownership or sale or transfer of a license, as those exceptions are defined in Section 1291.213, is $1,000.  If the Department determines that an exception does not apply and the transaction is a change of ownership or sale or transfer of a license, then the licensee shall pay the fees required under subsection (b)(1), minus any monies already paid pursuant to this subsection (b)(2).

 

3)         The licensing fee for a dispensing organization is $60,000.

 

4)         The renewal fee for a dispensing organization is $60,000.

 

5)         The late fee for renewal of a dispensing organization is $5,000.

 

6)         Licensing fees may be paid on a pro-rated basis based on the following license issuance dates:

 

Dispensing Organization Licensing Fees – Pro-Rated Table

 

Month	Fee
January of even-numbered years	$5,000
February of even-numbered years	$2,500
March of even-numbered years	$60,000
April of even-numbered years	$57,500
May of even-numbered years	$55,000
June of even-numbered years	$52,500
July of even-numbered years	$50,000
August of even-numbered years	$47,500
September of even-numbered years	$45,000
October of even-numbered years	$42,500
November of even-numbered years	$40,000
December of even-numbered years	$37,500
January of odd-numbered years	$35,000
February of odd-numbered years	$32,500
March of odd-numbered years	$30,000
April of odd-numbered years	$27,500
May of odd-numbered years	$25,000
June of odd-numbered years	$22,500
July of odd-numbered years	$20,000
August of odd-numbered years	$17,500
September of odd-numbered years	$15,000
October of odd-numbered years	$12,500
November of odd-numbered years	$10,000
December of odd-numbered years	$7,500

 

c)         Hardship Waiver.  Dispensing organizations may seek a hardship waiver for 50% of a dispensing organization's renewal fee under Section 15-45 of the Act.

 

1)         In order to qualify for a hardship waiver, dispensing organization licensees must:

 

A)        Attest to their status as a social equity applicant in a form or manner prescribed by the Department.

 

B)        Attest that the dispensing organization or applicant for renewal, including all individuals and entities with 10% or greater ownership and all parent companies, subsidiaries, and affiliates, has less than a total of $750,000 of income in the previous calendar year; and that dispensing organization or applicant for renewal, including all individuals and entities with 10% or greater ownership and all parent companies, subsidiaries, and affiliates, have no more than two other licenses for cannabis business establishments in the State of Illinois.

 

C)        Provide income verification by the Illinois Department of Revenue.

 

2)         Licensees may only qualify for a hardship waiver for the licensee's first renewal cycle.

 

d)         Renewals

 

1)         An Adult Use Dispensing Organization License will expire on March 31 of each even-numbered year. (Section 15-45 of the Act)  The licensee shall renew the license during the 90 calendar days preceding the expiration date by submitting a renewal application and paying the fee required by Section 1291.15 no later than March 1 of the renewal year.  If a license is not renewed before the license expires, the dispensing organization must cease operations until the license has been renewed.

 

2)         If a dispensing organization does not renew its license, it shall notify the Department, not less than three months prior to the closing date or as otherwise authorized by the Department.

 

3)         If a dispensing organization does not renew its license within 90 calendar days after its expiration, the Department may deem the license to be abandoned and issue a Notice of Intent to Issue a Permanent Revocation Order.  The Notice of Intent to Issue a Permanent Revocation Order shall specify the reason for the intended action and notify the licensee that it has 20 calendar days after the date the notice is mailed or e-mailed to present to the Department a written response contesting the Department's intended action.  A written response will be considered by the Department only if the dispensing organization provides documentation that:

 

A)        the license was renewed within the required timeframe; or

 

B)        a renewal application was submitted prior to the Notice of Intent to Issue a Permanent Revocation being issued.

 

4)         If the Department does not receive a written response from the licensee that establishes one of the grounds provided in subsection (c)(1) or (2) and more than 20 calendar days have lapsed since the date of the issuance of the Notice of Intent to Issue a Permanent Revocation Order, the Director shall issue an order permanently revoking the license of the licensee.

 

e)         Dispensing Organization Duties and Prohibitions

 

1)         A dispensing organization license shall be valid only for the specific dispensing organization identified on the license and for the specific location proposed and approved by the Department.

 

2)         Early Approval Adult Use Dispensing Organization Licensees ("same site") issued pursuant to Section 15-15 of the Act or Early Approval Adult Use Dispensing Organization License at secondary sites ("secondary site") issued pursuant to Section 15-20 of the Act cannot be severed from the associated medical registration.  The ownership structures for a same-site or secondary site shall remain identical to the associated medical registration.  Same-site licensees seeking relocation must relocate both the same-site license and associated medical registration to the same location.  Any change of ownership or sale or transfer involving a medical registration must also include its associated same-site and secondary site licenses and vice versa.

 

3)         Dispensing organizations are responsible for ensuring it and its agents adhere to the codes of conduct and grounds for discipline identified in Sections 1291.60 and 1291.70.

 

4)         Dispensing organizations have a duty to report to the Department, within 14 calendar days, any adverse action taken against the dispensing organization, or its agent, by a licensing authority with jurisdiction in any state or any territory of the United States or any foreign jurisdiction, any governmental agency, any law enforcement agency or any court;

 

5)         Dispensing organizations are prohibited from assigning a dispensing organization license. (See Section 15-60(g) of the Act.)

 

6)         Dispensing organizations are prohibited from using a dispensing organization license as collateral to secure an existing or prospective debt.

 

f)         The Department may suspend or revoke a dispensing organization license for a violation of the Act or this Part in accordance with Section 1291.70.

 

(Source:  Added at 48 Ill. Reg. 13377, effective August 20, 2024)

 

Section 1291.20  Agent Fees, Application, and Credentialing

 

a)         All individuals who have access to a dispensing organization's restricted access area and who are not otherwise registered as an agent-in-charge, a principal officer, or are identified on the dispensary's approved vendor list, are required to be registered by the Department as an agent and be issued an agent ID card.  These individuals include, but are not limited to:

 

1)         Individuals involved with in-take of cannabis or cannabis-infused product deliveries;

 

2)         Individuals fulfilling cannabis or cannabis-infused product orders;

 

3)         Individuals involved with the destruction of cannabis or cannabis-infused products;

 

4)         Individuals entering purchasers' cannabis or cannabis-infused product orders into any point of sale system used by a dispensing organization; and

 

5)         Individuals employed by the dispensing organization that engage in inventory verifications.

 

b)         Communications with the Department.  The Department will only communicate with the agent's email address the Department has on record, or with a third-party so long as a third-party authorization form is submitted.  In order to change its contact information, an agent must submit a request to the Department from the email address the Department has on record.  If the current email address is inaccessible, the agent must submit a certification attesting to the inaccessibility and request the change.

 

c)         Fees.  The fees for an agent are as follows.  All fees are nonrefundable and all monies collected under the Act shall be deposited in the Cannabis Regulation Fund in the State Treasury.

 

1)         The application fee for an agent ID card is $100.  This fee includes the physical card.  (See Section 15-40(a)(5) of the Act.)

 

2)         The annual renewal fee for an agent ID card is $100. (See Section 15-45(d)(2) of the Act.)

 

3)         The late fee for renewal of an agent ID card is $50.

 

4)         The fee for the issuance of a replacement agent ID card is $50.

 

5)         The fee to restore an agent ID card is $100. (See Section 15-40(b) of the Act.)

 

d)         Agent ID Card Application.  Prior to performing the duties of an agent within a dispensing organization, an agent ID card application shall be submitted by a dispensing organization principal officer or agent-in-charge in a form or manner provided by the Department.

 

1)         Completed applications shall include the following:

 

A)        The name of the dispensing organization employing the agent, and the address of the dispensary;

 

B)        A copy of the applicant's valid driver's license or a State-issued identification;

 

C)        Electronic picture of applicant taken within 30 days of the application submission;

 

D)        The applicant's social security number;

 

E)        The application fee;

 

F)         Department background check authorizations in compliance with 410 ILCS 705/5-20.  These authorizations include Fingerprint Consent Forms and livescan vendor receipt demonstrating that the agent applicant has applied for a fingerprint-based criminal history records check.  Applicants shall only have valid fingerprints taken that are capable of being retrieved by the Department; and

 

G)        Any additional information requested by the Department necessary to verify the identity of the applicant.

 

2)         The Department will issue an agent ID card if all of the criteria under subsection (d)(1) is met and the applicant passes a background check.  Applicants may begin working at a dispensary once an application has been submitted.  If the applicant is notified of a deficiency in their application, the applicant must submit the information or documentation requested within 30 calendar days of the notification requesting the information or documents.  If the applicant fails to provide the requested documentation or information, the Department will deny the issuing of the agent ID card, and the applicant may no longer enter the dispensary except as a member of the public.  Applicants may not work at the dispensary after receiving a Notice of Intent to Deny Licensure as defined by the Rules of Practice in Administrative Hearings (68 Ill. Adm. Code 1110.30).

 

3)         The Department will communicate with the applicant's contact information on file, including the applicant's email address of record, the primary contact, and/or the alternate contact associated with the application.

 

e)         Agent Training

 

1)         All individuals who are required to apply as an agent shall annually complete eight hours of training through an approved Responsible Vendor Program.

 

2)         Individuals required to apply as an agent shall complete the Responsible Vendor Program:

 

A)        Within 90 calendar days of commencing initial employment at a dispensary; and

 

B)        Within 45 calendar days before the individual's license renewal is due or within 45 calendar days after the individual's renewal has been approved; unless,

 

C)        The individual commences employment at a new dispensing organization within one year of that individual's annual or renewal requirements in the above subsection (e)(2)(A) or (B).

 

3)         Training certifications from a provider who is not an approved responsible vendor provider will not be accepted by the Department.  An individual with a training certificate that is not accepted by the Department is required to complete an approved responsible vendor program within 20 days after the Department provides notice of the deficiency. The Department will grant an extension to the deadlines established in subsection (e) on an individual basis so long as the individual demonstrates a good faith belief that a complete training program was approved by the Department.

 

f)         Agent Renewal and Restoration

 

1)         All agent ID cards shall expire one year from the date the agent ID card is issued.  An agent shall submit an online renewal application to renew the agent ID card no later than 30 calendar days preceding the card's expiration date.

 

2)         As part of an agent's renewal, the agent shall certify to the Department that they are in compliance with the required annual responsible vendor program training.

 

3)         An agent seeking restoration of a license due to termination of employment or expiration of the underlying license shall have the license restored upon request to the Department and payment of the required fee.  A restored agent must comply with subsection (d) upon beginning employment.

 

4)         At any time after the successful completion of any term of suspension, placement on probationary status or other disciplinary action taken by the Department with regards to any agent ID card, the agent may file a petition for restoration in accordance with 68 Ill. Adm. Code 1110.30.

 

g)         Agent Duties and Prohibitions

 

1)         All individuals registered as an agent are subject to the codes of conduct and grounds for discipline identified in Sections 1291.60 and 1291.70.  The Department may suspend, revoke, or otherwise discipline an agent's license, registration, and/or agent ID card for a violation of the Act or this Part.

 

2)         An individual registered as an agent shall not otherwise be registered as an agent-in-charge under Section 1291.25.

 

3)         An agent shall not dispense cannabis or cannabis-infused products to other agents or employees of the dispensing organization if the purchasing agent or employee is on duty. For the purposes of this subsection, an employee is on-duty when they are being compensated for their work, including any paid lunch or break. 

 

4)         Agents shall not consume cannabis or cannabis-infused products on the premises of the dispensing organization.

 

(Source:  Added at 48 Ill. Reg. 13377, effective August 20, 2024)

 

Section 1291.25  Agent-In-Charge Fees, Application, and Credentialing

 

a)         The agent-in-charge shall be a principal officer or full-time agent of the dispensing organization and shall manage the dispensary.  Managing the dispensary includes, but is not limited to, responsibility for opening and closing the dispensary, delivery acceptance, oversight of sales and dispensary agents, recordkeeping, inventory, dispensary agent training, and compliance with the Act and this Part.  Managing includes participation in affairs also includes the responsibility for maintaining all files subject to inspection by the Department at the dispensary.  (Section 15-95 of the Act) AICs may delegate some of their duties to agents registered under Section 1291.20.

 

b)         Communications with the Department.  The Department will only communicate with the AIC's email address the Department has on record, or with a third-party so long as a third-party authorization form is submitted.  In order to change its contact information, an AIC must submit a request to the Department from the email address the Department has on record.  If the current email address is inaccessible, the AIC must submit a certification attesting the inaccessibility and requesting the change.

 

c)         AIC Fees.  The fees for AIC are as follows.  All fees are nonrefundable and all monies collected under the Act shall be deposited in the Cannabis Regulation Fund in the State Treasury.

 

1)         The application fee for an AIC identification card is $100.  This fee includes the physical card.

 

2)         The annual renewal fee for an AIC identification card is $100.

 

3)         The late fee for renewal of an AIC identification card is $50.

 

4)         The fee for the issuance of a replacement AIC identification card is $50.

 

5)         The fee to restore a terminated AIC identification card is $100.

 

d)         AIC Application.  Prior to performing the duties of an AIC within a dispensing organization, an AIC application shall be submitted by the applicant in a form or manner provided by the Department.

 

1)         The application shall include, but not be limited to the following:

 

A)        The name of the dispensing organization employing the AIC, and the address of the dispensary;

 

B)        A copy of the applicant's valid driver's license or a State issued identification;

 

C)        Electronic picture of applicant taken within 30 days of the application submission;

 

D)        The applicant's social security number;

 

E)        The application fee;

 

F)         Department background check authorizations in compliance with 410 ILCS 705/5-20.  These authorizations include Fingerprint Consent Forms and livescan vendor receipt demonstrating that the applicant has applied for a fingerprint-based criminal history records check.  Applicants shall only have valid fingerprints taken that are capable of being retrieved; and

 

G)        Any additional information requested by the Department necessary to verify the identity of the applicant.

 

2)         The Department will issue an AIC identification card if all of the criteria under subsection (d)(1) is met and the applicant passes a background check.  Applicants may begin working at a dispensary once an application has been submitted.  If the applicant is notified of a deficiency in their application, the applicant must submit the information or documentation requested within 30 calendar days of the notification requesting the information or documents.  If the applicant fails to provide the requested documentation or information, the Department will deny the issuing of the AIC identification card, and the applicant may no longer enter the dispensary except as a member of the public.  Applicants may not work at the dispensary after receiving a Notice of Intent to Deny Licensure as defined by the Rules of Practice in Administrative Hearings (68 Ill. Adm. Code 1110.30).

 

3)         The Department will communicate with the applicant's contact information on file, including the applicant's email address of record, the primary contact, and/or the alternate contact associated with the application.

 

e)         AIC Training

 

1)         AICs shall annually complete eight hours of training through an approved responsible vendor program.

 

2)         AICs shall complete the responsible vendor program:

 

A)        Within 90 calendar days of commencing initial employment at a dispensary; and

 

B)        Within 45 calendar days before the individual's annual renewal is due or within 45 calendar days after the individual's renewal has been approved; unless,

 

C)        The individual commences employment at a new dispensing organization within one year of that individual's annual or renewal requirements in the above subsection (e)(1) or (e)(2).

 

3)         Training certifications from a provider who is not an approved responsible vendor provider will not be accepted by the Department.  An individual with a training certificate that is not accepted by the Department is required to complete an approved responsible vendor program within 20 days after the Department provides notice of the deficiency. The Department will grant an extension to the deadlines established in subsection (b) on an individual basis so long as the individual demonstrates a good faith belief that a complete training program was approved by the Department.

 

f)         AIC Renewal and Restoration

 

1)         All AIC identification cards shall expire one year after the date they are issued.  The holder of a card may renew the card 45 calendar days preceding the expiration date by submitting a renewal application and paying the required renewal fee.

 

2)         AICs shall certify to the Department that they are in compliance with the required annual responsible vendor program training.

 

3)         An AIC seeking restoration of a license due to termination of employment or expiration of the underlying license shall have the license restored upon request to the Department and payment of fee required.

 

4)         At any time after the successful completion of any term of suspension, placement on probationary status or other disciplinary action taken by the Department with regards to any AIC license, the licensee may file a petition for restoration in accordance with 68 Ill. Adm. Code 1110.30.

 

g)         AIC Duties and Prohibitions

 

1)         All individuals registered as an AIC are subject to the codes of conduct and grounds for discipline identified in Sections 1291.60 and 1291.70, as well as subsection (h).  The Department may suspend, revoke, or otherwise discipline an AIC's license, registration, and/or agent ID card for a violation of the Act or this Part.

 

2)         An AIC is responsible for notifying the Department of a change in the employment status of all dispensing organization agents within five business days after the change, including notice to the Department if the termination of an agent was for diversion of product or theft of currency.  (Section 15-95(e) of the Act)

 

3)         An AIC shall work at least 32 hours per week at their assigned dispensary in order to qualify as "full-time" for the purposes of this Part.

 

4)         An AIC is responsible for notifying the Department of a change in the employment status of all dispensing organization agents within five business days after the change, including notice to the Department if the termination of an agent was for diversion of product or theft of currency. (Section 15-95(e) of the Act)

 

5)         An AIC is responsible for notifying the Department of any changes made to the approved vendor list.

 

6)         An AIC is responsible for ensuring the daily inventory count as required by Section 1291.310(e) is completed.

 

7)         An AIC is responsible for managing the dispensary.

 

8)         An AIC is responsible for implementing the dispensary's records retention policy, including:  the preparation, obtaining, or keeping records, logs, reports, or other documents in connection with Act and this Part; and for, upon request by the Department, making any documents immediately available for inspection and copying by the Department, the Department's authorized representative, or others authorized by law to review the documents.  (See Section 15-135(e) of the Act.)

 

h)         AIC Disciplinary Actions.  In addition to any action initiated pursuant to Sections 1291.60 and Section 2191.70, the Department may deny an application or renewal or discipline or revoke an agent-in-charge identification card for any of the following reasons in accordance with the Act and 20 ILCS 2105/2105-130:

 

1)         Submission of misleading, incorrect, false, or fraudulent information in the application or renewal application;

 

2)         Violation of the requirements of the Act or this Part;

 

3)         Fraudulent use of the agent-in-charge identification card;

 

4)         Selling, distributing, transferring in any manner, or giving cannabis to any unauthorized person;

 

5)         Theft of cannabis, currency, or any other items from a dispensary;

 

6)         Tampering with, falsifying, altering, modifying, or duplicating an agent-in-charge identification card;

 

7)         Tampering with, falsifying, altering, or modifying the surveillance video footage, point-of-sale system, or the State's verification system;

 

8)         Failure to notify the Department immediately upon discovery that the agent-in-charge identification card has been lost, stolen, or destroyed;

 

9)         Failure to notify the Department within five business days after a change in the information provided in the application for an agent-in-charge identification card;

 

10)       Conviction of a felony offense in accordance with Sections 2105-131, 2105-135, and 2105-205 of the Department of Professional Regulation Law of the Civil Administrative Code of Illinois [20 ILCS 2105] or any incident listed in the Act or this Part following the issuance of an agent-in-charge identification card;

 

11)       Dispensing to purchasers in amounts above the limits provided in the Act; or

 

12)       Delinquency in filing any required tax returns or paying any amounts owed to the State of Illinois.  (Section 15-95(i) of the Act)

 

(Source:  Added at 48 Ill. Reg. 13377, effective August 20, 2024)

 

Section 1291.30  Principal Officer Fees, Application, and Credentialing

 

a)         In addition to any individuals identified in the dispensing organization's by-laws as principal officers, the following individuals are considered principal officers of a dispensing organization and shall register and be approved by the Department:

 

1)         Those individuals who meet the definition of a "principal officer" as defined in the Act and this Part, however, an individual does not need to register as a Principal Officer solely because of that person's close relationship or familial tie to the holder of a Financial Interest in a dispensing organization;

 

2)         Managers of a management services contractor who have entered into an agreement with a dispensing organization under Section 1291.210(f)(4).  Managers include but are not limited to board members and corporate officers.

 

3)         If a corporation, the officers of the corporation;

 

4)         If a partnership, the partners;

 

5)         If a limited liability company, the members and managers of the limited liability company;

 

6)         If an association or cooperative, the members of the association or cooperative;

 

7)         If a joint venture, the individuals who signed the joint venture agreement; and

 

8)         If a business organization other than the types listed in subsections (a)(1) through (5), the members of the business organization.

 

9)         If a trust has any interest in a dispensing organization license, the dispensing organization must disclose to the Department the trustee and all beneficiaries of and participants in the trust, on a form or manner prescribed by the Department.  Trust beneficiaries and participants may be required to register as principal officers if they meet the definition of a principal officer.  The Department may not approve a trust if any trust beneficiary or participant is a person that is otherwise prohibited from having an ownership interest in the entity.

 

b)         Communications with the Department.  The Department will only communicate with the principal officer's email address the Department has on record, or with a third-party so long as a third-party authorization form is submitted.  In order to change its contact information, a principal officer must submit a request to the Department from the email address the Department has on record.  If the current email address is inaccessible, the principal officer must submit a certification attesting to the inaccessibility and requesting the change.

 

c)         Principal Officer Fees.  The fees for a principal officer are as follows.  All fees are nonrefundable.  All monies collected under the Act shall be deposited in the Cannabis Regulation Fund in the State Treasury.

 

1)         The application fee for a principal officer agent identification card is $100.  This fee includes the physical card.

 

2)         The annual renewal fee for a principal officer agent identification card is $100.

 

3)         The late fee for renewal of a principal officer agent identification card is $50.

 

4)         The fee for the issuance of a replacement principal officer agent identification card is $50.

 

5)         The fee to restore a terminated principal officer agent identification card is $100.

 

d)         A principal officer is not required to complete a responsible vendor program if the principal officer does not otherwise meet the requirements in Section 1291.20(a).

 

e)         Principal Officer Application.  A principal officer application shall be submitted by the dispensing organization in a form or manner provided by the Department.  Principal officer applications shall be submitted for all new principal officers and at any time an application is needed pursuant to Section 1291.211.  Principal officer applications shall include, but not be limited to, the following:

 

1)         The name and license number of the dispensing organization employing or associated with the principal officer, and the address of the dispensary;

 

2)         Unless the background check exception under subsection (f) applies, Department background check authorizations in compliance with 410 ILCS 705/5-20.  These authorizations include fingerprint consent forms and livescan vendor receipt demonstrating that the principal officer applicant has applied for a fingerprint-based criminal history records check.  Applicants shall only submit valid fingerprints capable of being retrieved by the Department;

 

3)         A copy of the applicant's valid driver's license or a State-issued identification;

 

4)         Electronic picture of applicant taken within 30 days of the application;

 

5)         The applicant's social security number;

 

6)         The application fee;

 

7)         A certification that the individual is tax compliant pursuant to 410 ILCS 705/45-20.

 

8)         A certification that the individual is compliant with all other aspects of Article 2105 of the Civil Administrative Code of Illinois [20 ILCS 2105/2105]; and

 

9)         Any additional information requested by the Department in the verification process.

 

f)         For all changes of ownership or sales of a license pursuant to subsection 1291.211, each proposed principal officer must also submit to the Department background check authorizations as part of its principal officer applications in compliance with Section 1291.30(e).

 

1)         The Department may waive the requirement for fingerprint consent forms and livescan vendor receipt if the underlying transaction is a transfer, as that term is defined in this Part.

 

2)         The Department may also waive the requirement for fingerprint consent forms and livescan vendor receipt if the principal officers have submitted principal officer applications within the previous 12 months of the closing date of the change of ownership or the sale of the license.

 

g)         Principal Officer Renewals and Restoration

 

1)         All principal officer agent identification cards shall expire one year from the date they are issued.  The holder of a card may renew the card 45 calendar days preceding the expiration date by submitting a renewal application and paying the required renewal fee.

 

2)         A principal officer agent seeking restoration of a license that has terminated or expired shall have the license restored upon request to the Department and payment of fee required.

 

3)         At any time after the successful completion of any term of suspension, placement on probationary status or other disciplinary action taken by the Department with regards to any agent license, the licensee may file a petition for restoration in accordance with 68 Ill. Adm. Code 1110.30.

 

h)         Principal Officer Duties and Prohibitions

 

1)         A principal officer not in compliance with the requirements of the Act shall be removed from his or her position with the dispensing organization or shall otherwise terminate his or her affiliation.  Failure to do so may subject the dispensing organization to discipline, suspension, or revocation of its license by the Department in accordance with the Act and 20 ILCS 2105/2105-130.  (Section 15-50(h) of the Act)

 

2)         All individuals registered as a principal officer are subject to Sections 1291.60 and 1291.70.

 

3)         Principal officers are prohibited from assigning their principal officer license.

 

4)         Principal officers are prohibited from using their principal officer license as collateral to secure an existing or prospective debt.

 

i)          Principal Officer License Limitations

 

1)         A person or entity shall not be a principal officer, have a financial interest, or hold any legal, equitable, ownership, or beneficial interest, directly or indirectly, in more than 10 dispensing organizations.  (See Section 15-36(c) of the Act.)

 

2)         The Department will issue a Notice of Intent to Issue a Suspension Order to all dispensing organizations held by any person or entity or entities that the Department determines is a principal officer and/or holds a financial interest in more than 10 Adult Use Dispensing Organization Licenses, as well as the individual principal officer, in violation of Section 15-36(c) of the Act.  The notice shall specify the reason for the intended action and notify the dispensing organization and the principal officer that they have 20 calendar days after the date the notice is mailed or emailed to the address of record, to present the Department with a written response contesting the intended action.  The Department will rescind the Notice of Intent to Issue a Suspension Order if the dispensing organization and the principal officer demonstrate, and include documentation that supports, one of the following scenarios:

 

A)        The person or entity has been incorrectly identified as a principal officer of more than 10 dispensing organizations and/or having a financial interest in more than 10 dispensing organizations; or

 

B)        The person or entity is no longer a principal officer of more than 10 dispensing organizations and/or no longer has financial interest in more than 10 dispensing organizations, as supported by proof of resignation letters and current tables of organization, ownership, and control.

 

3)         If the Department does not receive a written response that establishes one of the grounds provided in subsection (i)(2) within 20 calendar days after the date the notice was issued, the Director shall issue an order suspending the license of each dispensing organization in which the person or entity is a principal officer and/or has a financial interest.

 

4)         The dispensing organizations may file for restoration of its license as provided in Section 1291.90 once the person or entity is no longer a principal officer or has a financial interest in more than 10 dispensing organizations.

 

(Source:  Added at 48 Ill. Reg. 13377, effective August 20, 2024)

 

Section 1291.50  Tied Applicant Lottery Conducted in 2021

 

a)         A tied applicant may qualify as an eligible applicant subject to the following:

 

1)         A tied applicant is prohibited from becoming an eligible applicant if a principal officer of the tied applicant is a principal officer of more tied applicants than the number of remaining available licenses.  For example, if an individual is a principal officer of four tied applicants and there are two remaining available licenses, no more than two of those tied applicants may become eligible applicants.

 

2)         A tied applicant is prohibited from becoming an eligible applicant if a principal officer of a tied applicant resigns after the conclusion of the scoring process period.

 

3)         A tied applicant is prohibited from becoming an eligible applicant if, after the conclusion of the declination period identified in subsection (b), a principal officer of the applicant is a principal officer of more tied applicants than the number of remaining available licenses.

 

b)         A tied applicant may decline to become an eligible applicant by informing the Department within five business days after the conclusion of the scoring process.  The declination must be submitted on forms approved by the Department.

 

c)         If, at the conclusion of the scoring process period, there are two or more eligible applicants, the Department may distribute the remaining available licenses by lot subject to the following:

 

1)         The Department shall publish a list of eligible applicants at least five business days before the day the remaining available licenses are distributed.

 

2)         The drawing by lot for all remaining available licenses will occur on the same day.

 

3)         For each BLS region, the Department will draw a number of eligible applicants equal to five times the number of remaining eligible applicants.

 

4)         Within each BLS region, the first eligible applicant drawn will have the first right to a remaining available license.  The second eligible applicant drawn will have the second right to a remaining available license.  The same pattern will continue for each subsequent eligible applicant drawn.

 

5)         The process for distributing remaining available licenses will be recorded by the Department in a format selected by the Department.

 

6)         If, upon being selected for a remaining available license, the eligible applicant has a principal officer that is a principal officer in more than 10 Early Approval Adult Use Dispensing Organization Licenses, Conditional Adult Use Dispensing Organization Licenses, Adult Use Dispensing Organization Licenses, the licensees and the eligible applicant listing that principal officer must choose which license to abandon pursuant to Section 15-36(d) of the Act, and notify the Department in writing within the timeframe identified in 1291.50(b).  If the eligible applicant or licensees do not notify the Department as required, the Department will refuse to issue to the eligible applicants all remaining available licenses obtained by lot in all BLS regions. 

 

7)         All remaining available licenses that have been abandoned shall be distributed to the next eligible applicant drawn by lot.  If there are no additional eligible applicants, the license shall be awarded to the applicant receiving the next highest number of application points in the BLS region. 

 

(Source:  Amended at 48 Ill. Reg. 13377, effective August 20, 2024)

 

Section 1291.60  Unprofessional, Dishonorable, or Unethical Conduct

 

Unprofessional, dishonorable, or unethical conduct includes, but is not limited to, the following actions and/or omissions:

 

a)         Failing to establish and maintain effective controls against the theft or diversion of cannabis;

 

b)         Committing, or attempting to commit, theft or diversion of cannabis;

 

c)         Failing to follow rules and procedures established by the dispensing organization;

 

d)         Failing to comply with law enforcement agencies, other state, local or federal agencies, or the Department;

 

e)         Discriminating in any manner against a person or group based on religion, race, creed, color, gender, gender identity, sexual orientation, age, disability or national origin;

 

f)         Selling products to a medical cannabis patient who is a minor in violation of the Illinois Department of Public Health rules (77 Ill. Adm. Code 946.280);

 

g)         Selling or attempting to sell products to an individual under age 21 or failing to establish or maintain effective controls against selling cannabis to an individual under age 21;

 

h)         Misuse or attempted misuse of an agent ID card, and/or medical cannabis patient card, including, but not limited to:  operating under an expired agent ID card, and/or medical cannabis patient card, falsely presenting oneself as a licensed agent, AIC, principal officer, and/or medical cannabis patient;

 

i)          Tampering with, falsifying, altering, modifying or duplicating an agent ID card, and/or medical cannabis patient card, or any attempt thereof;

 

j)          Misrepresentation or attempt to misrepresent cannabis and/or cannabis-infused product, including, but not limited to, weight, quality, percentage of THC, or efficacy;

 

k)         Failing to report to the Department that the dispensing organization has received notice in any form or from any person, that cannabis or cannabis-infused products produced in a licensed cultivation center, craft grower, or infuser organization has failed a test performed by a laboratory within two calendar days.  Tests may include, but are not limited to, all information contained within the laboratory testing rules found at 8 Ill. Adm. Code 700;

 

l)          Allowing an individual into a limited access area who is not permitted into a limited access area, as that term is defined in the Act;

 

m)        Engaging in activity that requires a license under the Act or this Part while not holding an active license;

 

n)         Making or filing a report or record that the individual knows to be false;

 

o)         Intentionally or negligently failing to file a report or keep records as required by the Act or this Part;

 

p)         Knowingly selling or transferring cannabis using a patient's medical cannabis card after the death of the person who holds the medical cannabis card;

 

q)         Failing to keep a dispensary in sanitary condition, including, but not limited to, failing to keep the dispensary free from insects, rodents and/or vermin; or from mold and/or fungus; and/or complying with local health code requirements;

 

r)          Billing or charging for quantities of cannabis different than was dispensed;

 

s)         Demonstrating actual or potential inability to dispense under the Act or this Part with reasonable skill, safety or judgment;

 

t)          Engaging in activities that cause actual harm to any member of the public;

 

u)         Dispensing cannabis after the use by date on the label of cannabis;

 

v)         Dispensing defective cannabis which shall include, but is not limited to, cannabis which has failed any laboratory testing, cannabis that has expired, cannabis that has been tampered with, or cannabis that otherwise poses a threat to public safety;

 

w)        Knowingly aiding or assisting another in any of the above violations; or

 

x)         Any violation of the Act or this Part.

 

(Source:  Added at 48 Ill. Reg. 13377, effective August 20, 2024)

 

Section 1291.70  Grounds for Discipline

 

a)         The Department may deny issuance, refuse to renew or restore, or may reprimand, place on probation, suspend, revoke, or take other disciplinary or non-disciplinary action against any licensee, may impose a fine for any of the actions listed in this subsection (a).  Fines may not exceed $20,000 for each violation.

 

1)         Material misstatement in information furnished to the Department;

 

2)         Violations of the Act or this Part;

 

3)         Obtaining an authorization or license by fraud or misrepresentation;

 

4)         A pattern of conduct that demonstrates incompetence or that the applicant or licensee has engaged in conduct or actions that would constitute grounds for discipline under the Act;

 

5)         Aiding or assisting another person in violating any provision of the Act or this Part;

 

6)         Failing to respond to a written request for information by the Department within 30 calendar days;

 

7)         Engaging in unprofessional, dishonorable, or unethical conduct, such as those criteria under Section 1291.60, or of a character likely to deceive, defraud, or harm the public;

 

8)         Adverse action by another United States jurisdiction or foreign nation; a certified copy of the record of the action taken by another jurisdiction being prima facie evidence thereof.  This includes, but is not limited to, an adverse action by another state agency, U.S. jurisdiction, or foreign jurisdiction against a principal officer of a dispensing organization;

 

9)         A finding by the Department that the licensee, after having their license placed on suspended or probationary status, has violated the terms of the suspension or probation;

 

10)       Conviction, entry of a plea of guilty, nolo contendere, or the equivalent in a State or federal court of a principal officer or AIC of a felony offense in accordance with Sections 2105-131, 2105-135, and 2105-205 of the Department of Professional Regulation Law of the Civil Administrative Code of Illinois [20 ILCS 2105/2105];

 

11)       Excessive use of or addiction to alcohol, narcotics, stimulants, or any other chemical agent or drug demonstrating an inability to carry out the responsibilities of a license-holder with reasonable skill, safety, and judgment under the Act;

 

12)       A finding by the Department of a discrepancy in a Department audit of cannabis;

 

13)       A finding by the Department of a discrepancy in a Department audit of capital or funds;

 

14)       A finding by the Department of acceptance of cannabis from a source other than an adult use cultivation center, craft grower, infuser, or transporting organization licensed by the Department of Agriculture, or a dispensing organization licensed by the Department;

 

15)       An inability to operate using reasonable judgment, skill, or safety due to physical or mental illness or other impairment or disability, including, without limitation, deterioration through the aging process or loss of motor skills or mental incompetence;

 

16)       Failing to report to the Department, within 14 calendar days, any adverse action taken against the dispensing organization, or its agent, by a licensing authority with jurisdiction in any state or any territory of the United States or any foreign jurisdiction, any governmental agency, any law enforcement agency or any court defined in this Section;

 

17)       Any violation of the dispensing organization's policies and procedures submitted to the Department annually as a condition for licensure;

 

18)       Failure to inform the Department of any change of address, including email addresses, within 10 business days of the change;

 

19)       Disclosing customer names, personal information, or protected health information in violation of any State or federal law;

 

20)       Operating a dispensary without or prior to obtaining a license from the Department;

 

21)       Performing duties authorized by the Act prior to receiving a license to perform such duties;

 

22)       Dispensing cannabis when prohibited by the Act or this Part;

 

23)       Any fact or condition that, if it had existed at the time of the original application for the license, would have warranted denial of the license;

 

24)       Permitting a person without a valid agent ID card to perform licensed activities under the Act;

 

25)       Failure to designate a full-time AIC as required by Article 15 under the Act; for the purposes of the AIC, "full-time" means an employee who works for at least 32 hours per week;

 

26)       Failure to provide the training required by Section 15-40(3)(i) of the Act within the provided timeframe;

 

27)       Personnel insufficient in number or unqualified in training or experience to properly operate the dispensary business;

 

28)       Any pattern of activity that causes a harmful impact on the community;

 

29)       Failing to prevent diversion, theft, or loss of cannabis; (Section 15-145 of the Act)

 

30)       Shielding a dispensing organization's ownership and control from the Department. (See Section 15-50(d) of the Act.)  Shielding ownership and control includes but is not limited to:  failing to properly disclose and register all individuals who meet the definition of a principal officer; failing to submit current and accurate tables of organization, ownership, and control; submitting false or misleading information regarding principal officers, ownership and control, or tables of organization, ownership, and control to the Department or to a unit of local government, State agency, other State, third-party, or as otherwise required by law; or any other similar action; and

 

31)       Carrying more than 40% of products available for sale from a single source. (See Section 15-70(p)(5) of the Act.)  The Department shall calculate inventory percentages over a monthly average.

 

b)         The Department may approve a corrective action plan for any licensee. Any approval of a corrective action plan is at the discretion of the Department.  In approving a corrective action plan, the Department may consider any remedial actions undertaken by the licensee, including but not limited to: the licensee's cooperation in resolving the matter; if the licensee has initiated any mitigating actions; the licensee's past practices; the licensee's self-reporting; and any other factors otherwise specified in 20 ILCS 2105/2105-130(c).

 

c)         All fines and fees imposed under this Section shall be paid within 60 calendar days after the effective date of the order or citation imposing the fine or as otherwise specified in the order or citation. (See Section 15-145(b) of the Act.)

 

d)         All proceedings for disciplinary action shall adhere to the rules for practice in Administrative Hearings under 68 Ill. Adm. Code 1110.

 

e)         Upon receipt of a circuit court order establishing that an AIC or principal officer holding an agent ID card is subject to involuntary admission, as that term is defined in Section 1-119 or 1-119.1 of the Mental Health and Developmental Disabilities Code [405 ILCS 5], the Department shall suspend that card.

 

(Source:  Added at 48 Ill. Reg. 13377, effective August 20, 2024)

 

Section 1291.90  Disciplinary and Non-Disciplinary Actions and Petitions for Rehearing or Reconsideration Pursuant to Section 55-50 of the Act

 

a)         Disciplinary Action Initiated by the Department

 

1)         The Department may initiate a disciplinary action against a dispensing organization or any cannabis business establishment license under its jurisdiction, including any license issued pursuant to Sections 1291.15, 1291.20, 1291.25, or 1291.30, for any violation of the Act or a rule adopted in accordance with the Act, including Sections 1291.60 and 1291.70.

 

2)         For the purposes of this subsection (a), a "disciplinary action" includes but is not limited to:  a complaint filed by the Department, an intent to deny a license, and a refusal to renew a license.  Disciplinary actions may or may not include the imposition of a monetary fine.  All disciplinary actions taken by the Department are a matter of public record.

 

3)         If a license issued pursuant to Sections 1291.15, 1291.20, 1291.25, or 1291.30, or any other cannabis business establishment regulated by the Department has any disciplinary action initiated against it by the Department, proceedings for that disciplinary action and administrative hearings shall adhere to 68 Ill. Adm. Code 1110 and the Administrative Review Law [735 ILCS 5/Art. III]. 

 

4)         Notice for any disciplinary action taken shall comply with the provisions of 68 Ill. Adm. Code 1110.20.

 

5)         At any time after the successful completion of a minimum term of indefinite probation or suspension issued by the Department, including those licenses issued pursuant to Sections 1291.15, 1291.20, 1291.25, or 1291.30, the licensee may file a petition for restoration in accordance with 68 Ill. Adm. Code 1130.30.

 

6)         If the Department suspends, permanently revokes, or otherwise disciplines the Early Approval Adult Use Dispensing Organization License of a dispensing organization that also holds a medical cannabis dispensing organization license issued under the Compassionate Use of Medical Cannabis Program Act, the Department may consider the suspension, permanent revocation, or other discipline of the medical cannabis dispensing organization license.  (Section 15-15(o) of the Act)

 

b)         Non-Disciplinary Orders and Non-Disciplinary Actions

 

1)         In lieu of or in addition to any disciplinary action initiated by the Department, the Department may, in its discretion, negotiate the terms of and enter into any non-disciplinary orders with a licensee.  Non-disciplinary orders are non-public.

 

2)         In lieu of or in addition to any disciplinary action initiated by the Department, the Department may, in its discretion, issue a non-disciplinary action, including a citation, for minor violations of the Act or this Part.  Any such citation issued by the Department may be accompanied by a fee.  The fee shall not exceed $20,000 per violation.  The citation shall be issued to the licensee and shall contain the licensee's name and address, the licensee's license number, a brief factual statement, the Sections of the law allegedly violated, and the fee, if any, imposed.  The citation must clearly state that the licensee may choose, in lieu of accepting the citation, to request a hearing, and that a hearing is requested, the Department may withdraw the citation and instead file a complaint.  If the licensee does not dispute the matter in the citation with the Department within 30 days after the citation is served, then the citation shall become final and not subject to appeal.  (Section 15-140 of the Act)

 

c)         Petitions for Rehearing or Reconsideration Pursuant to Section 55-50 of the Act

 

1)         Within 20 business days after notification of any order or decision by the Department regarding a dispensing organization's license or a conditional license, a dispensing organization or conditional licensee may file with the Department a Petition for Rehearing or Reconsideration of the order or decision.  This subsection does not apply to any recommendations made by an Administrative Law Judge under 68 Ill. Adm. Code 1110, which are not orders or decisions.

 

2)         Petitions shall include a brief summary of the facts and legal arguments and shall not exceed five pages unless for good cause shown.

 

3)         Upon receipt of a petition, the Department shall notify the petitioner of the briefing schedule, which shall be as follows, unless otherwise extended:

 

A)        Petitioner has seven calendar days to file a brief or memorandum in support of its petition. Briefs or memorandums must not exceed 10 pages, except for good cause shown.  This page limitation does not include any exhibits which may accompany the brief or memorandum.

 

B)        The Department has seven calendar days to file its response.  Responses must not exceed 10 pages, except for good cause shown.  This page limitation does not include any exhibits which may accompany the brief or memorandum.

 

C)        After the Department files its response, the dispensing organization has seven calendar days to file any reply.  Replies must not exceed 10 pages, except for good cause shown.

 

D)        The Department may extend the briefing schedule of subsections (c)(3)(A) through (c)(3)(C) for an additional 30 calendar days upon good cause shown and prior written notice to the petitioner.

 

4)         After the petitioner files its reply or if its response goes unanswered after 10 calendar days, the Director shall issue a final order.  This final order is a final administrative decision under Section 55-55 of the Act.

 

5)         If the Department fails to act on the petition within 30 calendar days, or the date the time for rendering a decision was extended for good cause shown, the original order or decision of the Department is a final administrative decision under Section 55-55 of the Act.  (See Section 55-50 of the Act.)

 

(Source:  Added at 48 Ill. Reg. 13377, effective August 20, 2024)

 

Section 1291.95  Tax Delinquency

 

a)         The Department will deny issuance or renewal of a Conditional Adult Use Dispensing Organization License or Adult Use Dispensing Organization License if any principal officer, board member, and/or person having a financial or voting interest of 5% or greater in the licensee or applicant is delinquent in filing any required tax return or paying any amount owed to the State of Illinois.

 

b)         The Department will notify the applicant or licensee of any determination by the Illinois Department of Revenue that any principal officers, board members, and/or persons having a financial or voting interest of 5% or greater in the licensee or applicant are delinquent in filing any required tax return or paying any amount owed to the State of Illinois.

 

c)         Upon notification of tax delinquency being sent by the Department to the applicant or licensee, the applicant or licensee shall have 60 days to provide the Department proof that the applicant or licensee is no longer delinquent in filing any required tax return or paying any amount owed to the State of Illinois, as determined by the Illinois Department of Revenue.

 

d)         If after 60 days the applicant or licensee has not provided the Department proof that the applicant or licensee is no longer delinquent in filing any tax return or paying any amount owed to the State of Illinois, the Department will deny issuance or renewal of a conditional license or Adult Use Dispensing Organization License.

 

(Source:  Amended at 45 Ill. Reg. 16320, effective December 7, 2021)

SUBPART B: RESPONSIBLE VENDOR PROGRAM

 

Section 1291.100  Application and Approval Process

 

a)         Before any entity can offer a responsible vendor program, the entity shall first apply to and receive approval for the program from the Department and pay the applicable fee.  The application submission window is the period between August 1^st and August 15^th of every odd-numbered year.  If the date falls on a holiday or weekend in which case the window is extended to the next business day.  The application submission window shall close at 5 PM Central Time on the final day on which applications are accepted.

 

b)         All responsible vendor provider approvals will expire on September 30 of each odd-numbered year.  Approvals are not subject to renewal.  All current responsible vendors must reapply during the application submission window to remain an approved program.

 

c)         Applications for approval shall be submitted on forms provided by the Department and shall include:

 

1)         The first and last name of each responsible vendor trainer currently employed by the program and the following document for each current trainer:

 

A)        A resume and/or a curriculum vitae;

 

B)        A written statement detailing the trainer's relevant experience; and

 

C)        A signed certification from the trainer that they do not hold an ownership interest in a cannabis business establishment, unless the trainer was approved in the 2021 cycle in which case, the Department will allow the trainer to proceed;

 

2)         A general outline of the responsible vendor program;

 

3)         All training materials and curriculum consistent with Section 1291.120;

 

4)         A blank copy of the pre-test and post-test required by Section 1291.120(a)(2);

 

5)         A signed statement from each individual with an ownership interest in the applicant confirming that the individual does not hold an ownership interest in a cannabis business establishment nor is the individual owner an agent, employee, or affiliate of a cannabis business establishment or an affiliated entity of a cannabis business establishment, unless the individual is a member of an applicant which was approved in the 2021 cycle in which case, the Department will allow the an Individual to be approved; and

 

6)         The application fee of $2,000.

 

d)         The application shall be signed by a representative of the entity applying to be a responsible vendor provider certifying that all information contained in the application is true and accurate.

 

e)         All required materials shall be submitted during the application submission window.  The Department will not accept applications any other time.  Early or late applications will not be accepted.

 

f)         The Department may refuse to issue an approval to any applicant:

 

1)         Who is unqualified to perform the duties required of a provider;

 

2)         Who fails to disclose or makes misrepresentations of any information called for in the application;

 

3)         Who fails to provide all required application materials; or

 

4)         Who does not demonstrate knowledge of the rules and laws for dispensing cannabis in Illinois or demonstrates a misunderstanding of the rules and laws.

 

5)         If an application is submitted in the application window, the Department may inform the applicant of a deficiencies in the application.  An applicant may modify their training materials to meet the above requirements for 30 days following the notice.  If the applicant is unable or unwilling to modify the training materials, then the Department shall deny the approval.  If the Department denies the approval, it shall provide a detailed description of the reasons for the denial.

 

g)         The Department will send approval notices to successful applicants who meet the requirements of this Section.  Approved responsible vendor providers may begin offering training upon receipt of the approval notice.  Only responsible vendor providers approved by the Department can provide a responsible vendor program.

 

h)         An approval for a responsible vendor provider shall be valid only for the provider named in the application.  An approval is not transferable or assignable.

 

i)          A responsible vendor provider may not subcontract or engage with an outside third-party to offer any of its training.

 

j)          If the responsible vendor provider hires new trainers who were not previously disclosed at the time of the provider's original application of subsection (c)(1), the provider shall submit the required information and documents of any new trainers to the Department within five calendar days after hiring the new trainer.

 

k)         The Department may rescind its approval of a responsible vendor provider that allows an individual or entity that has not been disclosed to the Department to offer its training course.

 

l)          The Department shall deny a responsible vendor provider application where the provider or proposed trainer holds an ownership interest in a cannabis business establishment or is the individual owner an agent, employee, or affiliate of a cannabis business establishment or an affiliated entity of a cannabis business establishment.

 

(Source:  Added at 48 Ill. Reg. 13377, effective August 20, 2024)

 

Section 1291.110  Curriculum Requirements

 

a)         The curriculum for a responsible vendor program shall include, at a minimum, the following topics:

 

1)         Health and safety concerns of cannabis use, including the responsible use of cannabis, its physical effects, onset of physiological effects, recognizing signs of impairment and overconsumption, and appropriate responses in the event of overconsumption.  (Section 15-40(i)(3)(i) of the Act)  This topic shall specifically include information on the health risks associated with the use or abuse of cannabis, how cannabis can affect an individual's health, dosing, the criteria and severity for cannabis use disorder listed in the Diagnostic and Statistical Manual of Mental Disorders, fifth edition ("DSM-5"), and the contact information for the Illinois Poison Center.  The criteria for Cannabis Use Disorder listed in DSM-5 can be found at https://thriveworks.com/help-with/addiction/marijuana-addiction-cannabis-use-disorder/ and are also enumerated in this subsection (a)(1).  The DSM-5 defines a mild cannabis use disorder as having the presence of 2-3 of the criteria within the last twelve months, moderate is 4-5 in the last twelve months, and severe is 6 or more within the last twelve months.

 

A)        Cannabis is often taken in larger amounts or over a longer period than was intended.

 

B)        There is a persistent desire or unsuccessful efforts to cut down or control cannabis use.

 

C)        A great deal of time is spent in activities necessary to obtain cannabis, use cannabis, or recover from its effects.

 

D)        Craving, or a strong desire or urge to use cannabis.

 

E)        Recurrent cannabis use results in failure to fulfill role obligations at work, school, or home.

 

F)         Continued cannabis use despite having persistent or recurrent social or interpersonal problems caused or exacerbated by the effects of cannabis.

 

G)        Important social, occupational, or recreational activities are given up or reduced because of cannabis use.

 

H)        Recurrent cannabis use in situations in which it is physically hazardous.

 

I)         Cannabis use continues despite knowledge of having a persistent or recurrent physical or psychological problem that is likely to have been caused or exacerbated by cannabis.

 

J)         Tolerance, as defined by either: 

 

i)          a need for markedly increased cannabis to achieve intoxication or desired effect; or

 

ii)         a markedly diminished effect with continued use of the same amount of the substance.

 

K)        Withdrawal, as manifested by either:

 

i)          the characteristic withdrawal syndrome for cannabis; or

 

ii)         cannabis is taken to relieve or avoid withdrawal symptoms.

 

2)         Training on laws and regulations on driving while under the influence and operating a watercraft or snowmobile under the influence.  (Section 15-40(i)(3)(ii) of the Act)  This topic shall specifically include information on possible penalties for refusing a chemical test and the level of concentrations of tetrahydrocannabinol that can form the basis for a driving under the influence conviction;

 

3)         Sales to minors prohibition.  (Section 15-40(i)(3)(iii) of the Act)  This topic shall include penalties levied under Section 10-20 of the Act and Section 6-20 of the Illinois Liquor Control Act of 1934 [235 ILCS 5].

 

4)         Quantity limits on sales to purchasers.  (Section 15-40(i)(3)(iv) of the Act)  This topic shall include information on the purchasers and patient limits as provided in Section 10-10 of the Act and Section 10(a) of the Compassionate Use of Medical Cannabis Program Act [410 ILCS 130];

 

5)         Acceptable forms of identification.  (Section 15-40(i)(3)(v) of the Act)  This topic shall specifically include information on the acceptable forms of identification for:

 

A)        Verifying age as provided in Section 10-20(e) of the Act;

 

B)        Verifying residency;

 

C)        The forms of identification that cannot serve as evidence of the purchaser's state of residence; and

 

D)        Information on the proper methods for checking an ID.

 

6)         Safe storage of cannabis, including information about preventing the accidental consumption by minors by storing cannabis in a locked place and/or in child resistant containers; (Section 15-40(i)(3)(vi) of the Act)

 

7)         Compliance with all inventory tracking system regulations.  (Section 15-40(i)(3)(vii))  This topic shall include information regarding the requirements of Section 15-75 of the Act and shall explain the difference between the State Verification System and any commercial inventory system a dispensing organization may use to track inventory.  Additionally, this topic must highlight the importance of verifying the physical inventory in the dispensary against the inventory reported in the State Verification System;

 

8)         Waste handling, management, and disposal.  (Section 15-40(i)(3)(viii) of the Act)  This topic shall include information on the proper disposal and destruction of cannabis waste in accordance with Section 15-90 of the Act;

 

9)         Health and safety standards.  (Section 15-40(i)(3)(ix) of the Act)  This topic shall include information including, but not limited to, the following:  safe and healthy working conditions for employees including worker rights and protections guidance issued by the Occupation Safety and Health Administration, and health and safety guidelines issued by the Illinois Department of Public Health and local health departments.  It shall also include information regarding any specific cannabis-related public health and safety standards, guidelines, mandates, or orders that may be in place at the time of the training;

 

10)       Security surveillance requirements.  (Section 15-40(i)(3)(xi) of the Act)  This topic shall specifically include information on where surveillance cameras should be located in a dispensary to ensure that all required areas are covered and where cameras are prohibited by law (e.g., bathrooms and locker rooms).  Additionally, this topic shall include information regarding the Department's and Illinois State Police's (ISP's) ability to access all surveillance cameras remotely and at any time, and that all recordings must be saved for a period of a least 90 calendar days;

 

11)       Permitting inspections by State and local licensing and enforcement authorities.  (Section 15-40(i)(3)(xii) of the Act)  This topic shall specifically include instruction on allowing inspections by the Department, ISP, and local law enforcement officials, and the best practices for verifying with the relevant agencies that those individuals are authorized to inspect the dispensary;

 

12)       Purchaser privacy.  This topic shall specifically include instruction on HIPAA protections for medical cannabis patients, the prohibition on collecting an adult use purchaser's personal information without the purchaser's consent, and maintaining a purchaser's confidentiality; and

 

13)       Packaging and labeling requirements.  This topic shall include the packaging and labeling information provided in Section 55-21 o the Act and 8 Ill. Adm. Code 1000.420 or their successor provisions.

 

b)         Providers have a continuing obligation after they are approved to update their curriculum within 30 calendar days of the effective date of any amendment to the Act or this Part that alters the accuracy of their curriculum.  Any updates to the curriculum shall be submitted to the Department for approval before the provider includes the amended curriculum in its course.

 

c)         After a provider has been approved, it may update its curriculum to reflect changes in the industry, scientific knowledge, or for any other reason.  Any updates to the curriculum must be submitted to the Department for approval before the provider includes the amended curriculum in its course.

 

d)         Failure to submit any updated materials, as required in subsections (b) and (c), may result in the Department rescinding its approval of the provider.

 

(Source:  Added at 48 Ill. Reg. 13377, effective August 20, 2024)

 

Section 1291.120  Programmatic Requirements

 

a)         To maintain approval by the Department, a responsible vendor provider must meet the following requirements:

 

1)         Provide a safe and secure environment for responsible vendor instruction, which may include in-person, live-streamed, or pre-recorded classes, or a mix of the above.

 

2)         Provide a pre-test and post-test to participants to assess the program's effectiveness and to assess any increase in knowledge in the curriculum areas described in Section 1291.110.  The responsible vendor provider shall make a copy of the pre-test, post-test, or a copy of any individual's examination or related records available to the Department upon request.  Passage of the written examination shall require a score of 70%.  A participant who fails to score at least 70% on the post-test shall not receive a certificate of proof of completion.

 

3)         Maintain a roster of individuals who have completed a responsible vendor program.  The roster shall include the participant's name, address, telephone number, employers, and date of birth of each individual who completed the program, including those who passed and failed the program, and the date each individual completed the program.  The roster shall be made available to the Department upon request.

 

4)         Issue a certification of completion to each individual who successfully completes the program indicating that the individual has completed an approved Department responsible vendor training program.  The certification must include:

 

A)        Individual's first and last name;

 

B)        Number of completed hours of instruction;

 

C)        Trainer's name;

 

D)        Date of completion;

 

E)        Name of the approved responsible vendor provider; and

 

5)         Submit a semi-annual report to the Department by July 15 for the reporting period of January 1 through June 30 and by January 15 for the reporting period of July 1 through December 31.  Each report shall contain the following information:

 

A)        The number of participants trained during the reporting period;

 

B)        The number of classes scheduled and completed during the reporting period and the locations of each class;

 

C)        The total fees charged by the provider during the reporting period; and

 

D)        The number of dispensaries represented by participants completing a responsible vendor program and the respective counties of those dispensaries.

 

6)         Submit a fee schedule indicating the cost of the program, if any.  The responsible vendor provider must notify the Department within five business days of any change to the fee schedule.

 

7)         Notify the Department before a new trainer begins providing instruction of the provider's responsible vendor program.  The notification shall include:

 

A)        The name of the responsible vendor provider;

 

B)        The name of the trainer;

 

C)        The trainers' resume and/or a curriculum vitae;

 

D)        A written statement detailing the trainer's relevant experience; and

 

E)        A signed statement from the trainer attesting that they do not hold an ownership interest in a cannabis business establishment.

 

b)         The Department may attend any in-person or remote, real time online video instruction at any time.  Upon request, a provider must make any login information or class places and times available to the Department.

 

c)         Failure to comply with this Section or any other provisions of the Act or this Part will result in the Department withdrawing its approval.

 

(Source:  Added at 48 Ill. Reg. 13377, effective August 20, 2024)

 

Section 1291.130  Responsible Vendor Provider Recordkeeping

 

a)         Responsible vendor providers' records shall be maintained electronically and be available for inspection by the Department upon request.  The Department may audit any records held by the responsible vendor at any time.

 

b)         Responsible vendor providers shall develop recordkeeping policies and procedures consistent with this Part.

 

c)         Responsible vendor providers shall retain all records for at least three years from the date of creation and shall include, but not be limited to, the following:

 

1)         Program training materials;

 

2)         Enrollment rosters and training records for registrants – records must include registrants who successfully completed the program and those who did not complete or failed the program;

 

3)         Completed program certificates for each successful individual;

 

4)         Storage and transfer of records.  If a responsible vendor provider ceases operations due to insolvency, revocation, bankruptcy or for any other reason, all records must be preserved at the expense of the responsible vendor for at least three years in a form and location in Illinois acceptable to the Department.  The provider shall retain the records longer if requested by the Department.  The provider shall notify the Department of the location where the records are stored or transferred;

 

5)         Approval notifications from the Department; and

 

6)         All other records, policies, and procedures required by the Act and this Part.

 

(Source:  Added at 48 Ill. Reg. 13377, effective August 20, 2024)

 

Section 1291.140  Closure of an Approved Program

 

The following procedures shall be followed for closure of an approved responsible vendor provider and removal from the approved list.  The responsible vendor provider shall:

 

a)         Notify the Department, in writing, postmarked or emailed at least 30 calendar days in advance of the closing date.

 

b)         Notify individuals who have completed or are in the process of completing the program of the closure at least 15 calendar days in advance of the closing date and of the location where their completion records will be maintained for at least three years from the closing date.

 

c)         Stop enrolling individuals immediately and provide refunds in the full amount of the program's fee to individuals who will be unable to complete the program.

 

d)         Notify the Department in writing the names of the persons responsible for the maintenance of records for at least three years from the date of closure.

 

(Source:  Added at 48 Ill. Reg. 13377, effective August 20, 2024)

SUBPART C: CHANGES TO DISPENSING ORGANIZATIONS

 

Section 1291.200  Cosmetic and Non-Cosmetic Changes to Dispensing Organization Operations

 

a)         Cosmetic changes to a dispensary do not require Department approval.

 

b)         Cosmetic changes are changes made to the physical appearance of the dispensing organization not requiring structural changes to the building.  Cosmetic changes include, but are not limited to:

 

1)         Painting;

 

2)         Decorations;

 

3)         Movement of furniture or shelfing that does not block the view of an existing security camera;

 

4)         Movement of any non-cannabis products such as clothing or stickers; or

 

5)         Movement of the storage of any non-cannabis products.

 

c)         A dispensing organization must obtain the Department's approval before making any non-cosmetic changes to the dispensary.

 

d)         Approval for any proposed non-cosmetic change must be requested by the dispensing organization in writing in a form or manner prescribed by the Department.  If the Department does not approve the proposed non-cosmetic changes, the dispensing organization is prohibited from undertaking those changes.

 

e)         For the purposes of this Section, non-cosmetic changes include, but are not limited to:

 

1)         any change which blocks the view of an existing security camera;

 

2)         any structural or non-structural change to the dispensing organization's floorplan;

 

3)         any change of the square footage of the dispensary;

 

4)         any structural change to the vault where cannabis or cannabis-infused products are stored;

 

5)         the sealing off, creation of or relocation of a common entryway, doorway, passage or other means of public ingress and/or egress, when the common entryway, doorway, passage, or window alters or changes limited access areas, such as the cultivation, harvesting, manufacturing, testing, or sale of cannabis within the dispensing organization;

 

6)         any change which requires a local government permit; or

 

7)         any physical modification to the dispensary that impacts the operation of the dispensary in a manner inconsistent with the plans previously submitted and approved by the Department.

 

f)         This Section does not exempt dispensing organizations from complying with any local licensing authority or local jurisdiction requirements regarding changes, alterations, or modifications to the dispensary.

 

(Source:  Added at 48 Ill. Reg. 13377, effective August 20, 2024)

 

Section 1291.210  Change of a License's Entity or Ownership or Control Structure and the Sale or Transfer of a License

 

a)         A license issued by the Department shall be valid only for the specific dispensing organization identified on the application and for the specific location proposed and approved by the Department.

 

b)         Any proposed change of ownership or sale or transfer of a license must be requested by the dispensing organization in a form or manner prescribed by the Department.  Upon review, the Department will approve a proposed change of ownership or sale or transfer of a license that complies with the Act and this Part.  If the Department does not approve of the proposed changes, the dispensing organization is prohibited from undertaking those changes.

 

c)         The Department shall receive approval from the current dispensing organization to engage with the buyer regarding the Department's review and approval of any change of ownership or sale or transfer of a license.  Approval shall be on a form or manner provided by the Department and made readily available on its website.

 

d)         As used in this Section, a "sale" includes but is not limited to a transaction to acquire at least 51% of the dispensing organization licenses between an existing license holder and a buyer that is not already registered as a principal officer on the affected licenses.

 

e)         As used in this Section, a "transfer" includes but is not limited to a transaction to acquire a dispensing organization license, which results in a change of at least 51% of the ownership structure of the dispensing organization, between persons that are already registered as principal officers on the affected licenses.  A "transfer" shall not include a reallocation as described in Section 1291.213(c).

 

f)         As used in this Section, a "change of ownership" means any or all of the following, or any combination thereof:

 

1)         Any action which results in a change of at least 51% of the ownership structure of the dispensing organization;

 

2)         A change in an employee identification number (EIN) associated with the dispensing organization;

 

3)         The addition of a person that will have a revenue sharing arrangement with or assume the responsibility for the debts of the dispensing organization;

 

4)         Any agreement or contract between a dispensing organization and a third-party MSC in which the MSC offers its services or expertise to the dispensing organization through an instrument, such as a management service agreement that does not otherwise meet the exception for a consultant or conditional management service agreement under Section 1291.214.  If an agreement or contract between a dispensing organization and a third-party exists that does not meet the limited exception under Section 1291.214, then all individuals who meet the definition of a principal officer under Section 1291.30 and the Act shall be approved by the Department prior to the agreement or contract taking effect; or

 

5)         Any action which indicates a change in control over the dispensing organization.  In evaluating whether a person exerts "control" over a dispensing organization, the Department will consider the totality of the evidence, including, but not limited to, the following or any combination thereof:

 

A)        Any action which results in a person owning or controlling at least 51% of the dispensing organization that does not otherwise qualify for an exemption under Section 1291.213, if any;

 

B)        The person's ability to materially influence and direct the operational and managerial decisions of the dispensing organization including but not limited to corporate decision-making, employment decisions, product selection, access to security systems, advertisement decisions;

 

C)        The person is an immediate family member of one or more persons in control of the dispensing organization and has a common purpose or motive relating to their collective ability to materially influence and direct the operational and managerial decisions of the dispensing organization.  An "immediate family" member as used herein shall mean a spouse (other than a spouse who is legally separated from the individual under a decree of divorce or separate maintenance), parents, siblings, and children whether by blood, marriage or adoption; or

 

D)        The person has the ability to control the proxy machinery or to win a proxy contest;

 

E)        The person is a primary creditor or a guarantor, such as through a loan or guaranty agreement, of the dispensing organization.  As used in this subsection "primary creditor" means a person who would receive an ownership interest requiring registration as a Principal Officer in a dispensing organization upon a default of a loan or other similar agreement.

 

(Source:  Added at 48 Ill. Reg. 13377, effective August 20, 2024)

 

Section 1291.211  Required Documents and Actions for Change of Ownership or Sale or Transfer of a License Application

 

a)         When requesting approval for a change of ownership or sale or transfer of a license, the following documents or information shall be included as part of the application for approval.  The Department may request any other documents or information to aid its review of the proposed transaction and dispensing organizations are required to produce any document or information the Department requests.

 

1)         Written narrative identifying each impacted license, the current ownership of each impacted license, the nature of the proposed transaction, and the proposed new ownership structure as a result of the proposed transaction;

 

2)         An illustration of the proposed transaction that demonstrates the pre-transaction structure, the transaction, and the post-sale structure;

 

3)         Purchase or transaction agreement;

 

4)         Operating agreement of the buyer that will hold the licenses if approved;

 

5)         Articles of incorporation of the buyer that will hold the licenses if approved;

 

6)         If the buyer operates any cannabis businesses within any non-Illinois jurisdiction, certification from the jurisdiction of any non-Illinois regulatory body stating the date of issuance of the license, and whether the records of the regulatory body contain any record of disciplinary action taken or pending, or proof from the buyer that after reasonable attempts the buyer was unable to obtain certification;

 

7)         Letters of good standing from the jurisdiction in which the buyer is incorporated in, or proof from the buyer that after reasonable attempts the buyer was unable to obtain certification;

 

8)         Table of Organization, Ownership, and Control of the post-transaction ownership structure.  The table shall identify all intended proposed principal officers and entities that through direct or indirect means, will manage, own, or control the interest and assets of the license or medical registration holder.  If the entities have boards, all board members shall be identified.  The Table of Organization, Ownership and Control shall also identify the following information:

 

A)        The proposed new management structure including:

 

i)          the name of each business entity;

 

ii)         the office or position held by each individual;

 

iii)        the percentage ownership interest of each individual and business entity; and

 

iv)        if the business entity has a parent company, the name of each parent company's principal officers and the percentage ownership interest.

 

B)        All business entities identified in the table must identify each individual's title and ownership share, regardless of whether they meet the definition of a principal officer.

 

C)        If a business entity identified in the table is a publicly traded company, the following information shall be provided in the Table of Organization Ownership and Control:

 

i)          The name and percentage of ownership interest of each individual or business entity with ownership of more than 5% of the voting shares of the entity, to the extent the information is known or contained in 13D or 13G U.S. Securities and Exchange Commission filings.

 

ii)         To the extent known, the names and percentage of interest of ownership of persons who are relatives of one another and who together exercise control over or own more than 10% of the voting shares of the entity.

 

9)         All proposed principal officers shall submit a principal officer application in compliance with Section 1291.30;

 

10)       If a trust has any interest in a dispensing organization license, the dispensing organization must disclose to the Department the trustee and all beneficiaries of/participants in the trust, on a form or manner prescribed by the Department.  Trust beneficiaries and participants that meet the definition of a principal officer must register as principal officers.  The Department may not approve a trust if any trust beneficiary or participant is a person that is otherwise prohibited from having an ownership interest in the entity.

 

11)       Any relevant financial or ownership disclosures of the buyer, including, but not limited, to any documents involving guaranties, trusts, financing agreements, convertible debt arrangements, employment agreements, stock options, warrants, grants, buy-sell agreements, inheritance, and/or gifting;

 

12)       Updated license materials, such as any amended policies and procedures, and any other changes that may be made in accordance with Subpart D;

 

13)       Any dispensary name registrations, such as a DBA (doing-business-as);

 

14)       Federal tax identification issuance letter from the IRS for any entities holding ownership of the licenses post-transfer;

 

15)       If change of ownership or sale or transfer involves a license that was required to submit a community engagement plan as part of licensure, the buyer must provide a community engagement plan that is the same or similar to the one provided as part of the licensee's application (see Section 15-60(h) of the Act); and

 

16)       The Department may waive the submission of certain documents upon a showing of a good faith attempt to comply, which may include a written explanation of the steps taken to acquire those documents or why the submission of documents would be not applicable.

 

b)         If the Department determines the application materials and proposed new principal officer applications are complete, it will perform a site inspection of the dispensaries before approving the sale and issuing the new dispensing organization licenses.  In determining the scope of this inspection, the Department may consider the history for compliance of the dispensing organization and whether the dispensing organization is subject to any ongoing monitoring.

 

c)         All outstanding Department-imposed fees and fines on the current license numbers must be paid to the Department before the change of ownership or sale or transfer of a license is approved.

 

d)         The seller shall deliver all business, training, and operational records to the buyer.  The buyer shall retain those records for five years from the transfer date.

 

(Source:  Added at 48 Ill. Reg. 13377, effective August 20, 2024)

 

Section 1291.212  Prohibitions and Denials

 

a)         The Department may deny a request for a change of ownership or sale or transfer of a dispensing organization license for reasons including, but not limited to, the following:

 

1)         The entity is attempting to sell or transfer a Conditional Adult Use Dispensing Organization License.

 

2)         The entity is attempting to sell or transfer an Early Approval Adult Use Dispensing Organization License ("same-site") issued under Section 15-15 of the Act and Early Approval Adult Use Dispensing Organization Licenses at secondary sites ("secondary site") issued under Section 15-20 of the Act.

 

3)         The proposed principal officers, entity, or entity's owners held a cannabis-related registration and/or license that has been subjected to an adverse action by any licensing jurisdiction in the United States or any foreign jurisdiction, any governmental agency, any law-enforcement agency, or any court;

 

4)         The proposed principal officers, entity, or entity's owners, employees, agents or representatives submitted information to the Department that was deceptive, misleading, false, or fraudulent or that tended to deceive or create a misleading impression whether directly or by omission or ambiguity;

 

5)         The proposed principal officers, entity, or entity's owner, employees, agents, third-party agents, independent contractors, or representatives made statements to any regulatory or governmental authority that are deceptive, misleading, false, or fraudulent, or that tend to deceive or create a misleading impression, whether directly, or by omission or ambiguity;

 

6)         The proposed principal officers, entity, or entity's owners have a conviction for distribution of a controlled substance to a minor;

 

7)         The proposed principal officers, entity, or entity's owners conduct in Illinois or another jurisdiction posed or could pose a risk to the public health, safety, or welfare; and the risk posed by the proposed new ownership entity actions relates or could relate to the operation of a cannabis business;

 

8)         The proposed principal officer's entity, or entity's owners have engaged in unprofessional or unethical conduct in Illinois or any jurisdiction, regardless of whether such conduct has resulted in any litigation, discipline, adverse action, or settlement;

 

9)         The entity did not commit to the same or similar community engagement plan provided as part of the original dispensing organization's application; or

 

10)       The change of ownership or sale or transfer of the license would result in a single person or entity having a direct or indirect financial interest in more than 10 dispensing organization licenses, as prohibited by 410 ILCS 70/15-36(c).

 

b)         Buyer may agree to accept any Department-initiated encumbrances a dispensing organization license may have besides a formal complaint initiated against the license.  If the dispensing organization licensee involved in a proposed change of ownership or sale or transfer has a complaint filed against it by the Department prior to or during the Department's review of the transaction, then the Department's review of the change of ownership or sale or transfer of a license shall cease until the corresponding case of the formal complaint is resolved.

 

c)         If the seller entered into an agreement with the Department, such as a consent order or a non-disciplinary action as defined in Section 1291.60, the agreement may, with the buyer's consent, transfer to the buyer and the new dispensing organization license number unless otherwise resolved prior to the approval of the change of ownership or sale or transfer of a license.

 

d)         A buyer or seller may withdraw a change of ownership or sale or transfer of a license request at any time with notice provided to the Department in writing.  The Department shall inform the other party of the withdrawal in writing within five calendar days after receiving the notice.

 

e)         If a dispensing organization fails to respond to a request or inquiry of the Department regarding a proposed change of ownership or sale or transfer within 90 calendar days of the request or inquiry, the change of ownership or sale or transfer of a license will be considered withdrawn and the Department will provide written notice to both buyer and seller.  Any fees paid are non-refundable and shall be paid at the time of application.

 

(Source:  Added at 48 Ill. Reg. 13377, effective August 20, 2024)

 

Section 1291.213  Exceptions to the Change of Ownership Request Requirement

 

The Department will consider the following to not be a change of ownership or sale or transfer of a dispensing organization license:

 

a)         Death, Incapacity, and Receivership of a Principal Officer.  The death, incapacity, or receivership of a principal officer may not result in the change of ownership or sale or transfer of the licenses for fee purposes, however; the dispensing organization shall notify the Department of the affected principal officer within 10 business days of that principal officer's triggering event.  The dispensing organization shall provide the Department any updated necessary policies and procedures, Tables of Organization, Ownership, and Control, and any other documents the Department may require related to the change of ownership event.

 

b)         Conversion.  A dispensing organization may combine with or convert, including, but not limited to, under the Entity Omnibus Act [805 ILCS 415], for the exclusive purpose of changing its entity jurisdiction to one of the states or territories of the United States or the District of Columbia, its entity type or change the legal name of an entity without filing a change of ownership or sale or transfer of a license request.  This exception applies only if the principal officers' interests will remain the same after the combination, conversion, or change of legal name, and there will not be any new principal officers (individuals or entities).  Within 14 calendar days of the combination, conversion, or change of legal name the dispensing organization must submit the following to the Department:

 

1)         A copy of the transaction documents;

 

2)         A copy of any documents submitted to the Illinois Secretary of State;

 

3)         A copy of any document submitted to the Secretary of State or similar regulator of another state if the entity is organized under the laws of a state of the United States other than Illinois, a territory of the United States, or the District of Columbia;

 

4)         Identification of the dispensing organization's or principal owners' registered agents; and

 

5)         Identification of any principal officer for which disclosure is required by Section 1-10 of Act and 68 Ill. Adm. Code 1291.10.

 

c)         Reallocation of Owner's Interests Among Remaining Principal Officers.  A dispensing organization may reallocate the ownership interests among existing principal officers if it provides notification of the reallocation to the Department and there are no new principal officers, or the reallocation does not otherwise result in a change of ownership or sale or transfer of the license pursuant to Section 1291.210.  A reallocation must meet the following requirements:

 

1)         The interests being reallocated results in a change of less than 51% of the ownership structure of the dispensing organization;

 

2)         All interests are reallocated to other existing principal officers;

 

3)         Only consensual reallocations where all principal officers whose ownership percentages will change agree to the reallocation.  Proof that the transfer was consensual may include that it was done in accordance with any bylaws, membership agreement, or other similar business entity documents agreed to by the owners or per affirmation.

 

4)         If any principal officer will not hold any interest or remain a principal officer in a dispensing organization following the reallocation, that principal officer shall return their dispensing organization agent ID card to the Department in accordance with Section 15-40(d) of the Act; and

 

5)         All principal officers remain responsible for all actions of the dispensing organization while they were a principal officer and are subject to administrative action based on the same regardless of the reallocation.

 

d)         Dissolution of Intermediary Companies.  The dissolution of any intermediary companies of a licensee shall not be considered a change of ownership or sale or transfer of a license so long as the ultimate parent company of the license holding entity or entities remains the same, the ownership percentages of the existing principal officers remain the same, and no new intermediary companies or principal officers are added to the existing ownership structure.  If any holding companies of a dispensing organization are dissolved, the licensee shall submit an updated Table of Organization, Ownership, and Control to the Department for the Department's approval prior to any change taking effect.

 

e)         Addition of Intermediary Companies.  The addition of any intermediary companies of a licensee shall not be considered a change of ownership or sale or transfer of a license so long as the ultimate parent company of the license holding entity or entities remains the same, the ownership percentages of the existing principal officers remain the same, and no new principal officers are added to the existing ownership structure.  If any holding companies are added to the ownership structure of a dispensing organization, the licensee shall submit an updated Table of Organization, Ownership, and Control to the Department for the Department's approval prior to any change taking affect.

 

f)         Change of Executive Officer or Member of the Board of Directors.  A change of ownership or sale or transfer of a license application is not required for the removal or addition of an executive officer or member of the board of directors of a dispensing organization so long as the change does not otherwise qualify as a change of ownership or sale or transfer of a license as outline in Section 1291.210.  However, the addition of an executive officer or member of the board of directors must be approved by the Department as a principal officer in accordance with Section 15-60(b) of the Act prior to any change taking effect.

 

g)         A Consultant or Conditional Management Service Agreement ("CMSA") or Other Similar Agreement That Is Executed Pursuant to Section 1291.214.  If a CMSA or similar agreement is submitted for review with terms that are not substantially similar to those outlined in Section 1291.214, the agreement or contract will be considered a change of ownership or sale or transfer of a license pursuant to Section 1291.210 and must proceed through the process outlined in Section 1291.211.

 

(Source:  Added at 48 Ill. Reg. 13377, effective August 20, 2024)

 

Section 1291.214  Consultant and Conditional Management Service Agreements Exception

 

a)         Pursuant to this Section, a dispensing organization or conditional licensee and a management services contractor may contract for a consultant or Conditional Management Service Agreement ("CMSA") that does not qualify as a change of ownership or sale or transfer of a license under Section 1291.210 such that any contractors are required to register as a principal officer of the underlying licenses.

 

b)         Services provided under a CMSA may include, but are not limited to, management or supervision, operations, technical assistance, consulting, hiring employees, accounting, recordkeeping, leasing of equipment or real or intellectual property, and provision of goods or materials.

 

c)         A CMSA is prohibited from being sold, assigned, or otherwise transferred to a third-party.

 

d)         Prior to the execution of any CMSA submitted pursuant to this Section, a dispensing organization or conditional licensee shall submit to the Department:

 

1)         A third-party authorization form;

 

2)         A copy of the CMSA and any related agreements between the parties; and

 

3)         The operating agreement of the management services contractor.

 

e)         Dispensing organizations and conditional licensees must get approval from the Department prior to execution of a CMSA.

 

f)         Dispensing organizations and conditional licensees must obtain approval from the Department prior to making any material changes to a CMSA.  Prior to any material change to a CMSA, the dispensing organization or conditional licensee must submit to the Department, a copy of any proposed material changes to the Management Services Agreement and any related agreements between the parties, any proposed material changes to information detailing any renumeration paid, or to be paid, to the management services contractor by the dispensing organization; and any proposed material changes to any previously required submissions.

 

g)         A CMSA must clearly identify the licenses it applies to and contain the following provisions to be approved by the Department in order to qualify for this exception:

 

1)         The terms of the CMSA shall include a single, fixed fee and are prohibited from including percentage-based commissions, profit-sharing, or interest rates;

 

2)         A CMSA shall acknowledge that the management services contractor and its owners, principals, and staff who are engaged, directly or indirectly, in operating the cannabis business, are supervised in those operations by the dispensing organization and its principal officers;

 

3)         A CMSA shall acknowledge that the management services contractor and its owners, principals, and staff do not have a security interest in the conditional license;

 

4)         A CMSA shall acknowledge that the management services contractor and its owners, principals, and staff do not have an ownership interest or any right, including a future or contingent right, to obtain any ownership interest in the dispensing organization or conditional license; and

 

5)         A CMSA for a Conditional Licensee shall automatically terminate upon the Conditional Licensee being issued its 15-36 License.  The term of the CMSA for a 15-36 Licensee shall not exceed five years.

 

(Source:  Added at 48 Ill. Reg. 13377, effective August 20, 2024)

 

Section 1291.215  Death, Incapacity, and Receivership of a Principal Officer

 

a)         In the event of the death, incapacity, receivership, or other event rendering one or more principal officer incapable of performing the duties associated with the license, the principal officer, principal officers' successor in interest (e.g., appointed guardian, executor, administrator, receiver, trustee), or dispensing organization shall notify the Department in writing within 10 business days of the triggering event.  The notification shall be supported by proof, such as a death certificate or court order, and shall be on a form or manner prescribed by the Department.

 

b)         As soon as reasonably possible after a triggering event described in subsection (a), and in order to continue the operations of the dispensing organization, the Department may approve a successor in interest to act on behalf of the affected principal officer.  As used in this subsection, "successor in interest" is an individual who has the authority to act on behalf of the affected principal officer (e.g., appointed guardian, executor, administrator, receiver, custodian, trustee), as documented by a court order or other similar document appointing guardianship, receivership, administration or through a will or trust.  The successor in interest is subject to all terms and conditions under which a principal officer is held to, however, the Department's approval of the successor in interest creates no vested right to the future approval as a principal officer for the successor in interest.  The Department may approve a successor in interest if the individual or the dispensing organization submits the following:

 

1)         The name of the successor in interest;

 

2)         The name of the principal officer for which the successor in interest is succeeding along with the corresponding principal officer license numbers;

 

3)         The phone number, mailing address, and email address of the successor in interest; and

 

4)         Documentation demonstrating the following:

 

A)        That the principal officer is incapable of performing the duties associated with the license including, but not limited to, a death certificate or court order;

 

B)        That the successor in interest is at least 21 years of age;

 

C)        That the successor in interest is not delinquent in filing any required tax return or paying any amount owed to the State of Illinois as evidenced by the Illinois Department of Revenue;

 

D)        That the successor in interest is the principal officers' legal successor as evidenced by documentation such as a court order appointing guardianship, receivership, or a will or trust agreement;

 

E)        An attestation that naming the successor in interest will not have the effect of granting any of the owners or principal officers, including the successor in interest, direct or indirect ownership or control of more than 10 adult use dispensing organization licenses; and

 

F)         If the affected principal officer's ownership interest is held by a trust, that trust shall be disclosed to the Department within 10 business days of the trust receiving the impacted ownership interest in compliance with the trust disclosure parameters in Section 1291.30.

 

c)         The Department will provide an approved successor in interest written approval to continue operations for a specific period of time.

 

d)         The Department may request an updated Table of Organization, Ownership, and Control in order to reflect a successor in interest.

 

(Source:  Added at 48 Ill. Reg. 13377, effective August 20, 2024)

 

Section 1291.220  Relocation of an Early Approval Adult Use Dispensing Organization

License at a Same Site

 

a)         Early Approval Adult Use Dispensing Organizations ("Same-site Licensee") whose licenses were issued pursuant to Section 15-15 of the Act may submit an application on forms provided by the Department to relocate their dispensary.

 

1)         Same-site Licensees who apply to relocate their dispensaries to a new location pursuant to this Part may be approved, subject to all other statutory and administrative requirements, if:

 

A)        the proposed location is within the same geographic district, as those geographic districts are defined in 68 IAC 1290.20, as the Same-site Licensee’s existing associated medical cannabis dispensing organization registration issued under the Compassionate Use of Medical Cannabis Program Act is authorized to operate; and

 

B)        the Same-site Licensee’s existing location is within the boundaries of a unit of local government that prohibits the retail sales of adult use cannabis; or

 

C)        the Same-site Licensee has obtained a signed statement from a city manager, village president, mayor, corporate counsel, or other official from the unit of local government where it is located approving the Same-site Licensee to relocate to another location within that unit of local government.  If the unit of local government is a county, it must obtain signed statements from the county executive, county president, corporate counsel, or other official from the county board where it is located approving the Same-Site Licensee to relocate to another location within that county.

 

2)         The Same-site Licensee shall submit the fee required for the relocation of its existing associated medical registration.  This is the only fee required for the Same-site Licensee to relocate under this Section.

 

b)         The Department shall approve or deny an application to relocate under subsection (a) within 30 days after receiving a completed application.

 

c)         If the Department does not approve or deny an application to relocate under subsection (a) within 30 days after receiving a completed application, the application shall be deemed to be approved.

 

d)         If the Department denies an application to relocate pursuant to subsection (a), it shall do so in writing and provide a specific reason for the denial.

 

e)         An application to relocate shall be deemed complete upon submission of all documents (e.g., zoning approval) required by the application form provided by the Department.

 

f)         If, upon reviewing the application, the Department discovers any documentation required by the Department’s application to relocate are missing, the Department may request the missing documentation.  In this case, the application is not complete until the missing documentation is submitted.

 

g)         After receiving the Department’s approval to relocate under subsection (a), the Same-site Licensee shall submit floorplans of the new location for the Department’s approval in a form or manner prescribed by the Department and the Act.  The Department shall approve or deny the floorplans within 10 business days of the Department's receipt of the floorplans.

 

h)         Prior to the commencement of operations at a new location that was approved by the Department under subsection (a), the Same-site Licensee must also pass a building and site inspection conducted by the Department to ensure compliance with the Act.  The Same-site Licensee shall request a building and site inspection of the new site on forms provided by the Department.  The Department shall schedule a building and site inspection within 10 business days upon receiving the Same-site Licensee's request for a building and site inspection.

 

(Source:  Added at 46 Ill. Reg. 2660, effective January 28, 2022)

 

Section 1291.225  Relocation of an Adult Use Dispensing Organization License

 

a)         Adult use dispensing organization licenses issued in a specific BLS region shall remain in that BLS region, even if the license changes its ownership or is sold or transferred, unless the Act specifically allows a license to change BLS regions pursuant to Section 15-25(e-5) of the Act.

 

b)         Adult use dispensing organizations whose licenses were issued pursuant to Section 15-15 or Section 15-36 of the Act may submit an application on forms provided by the Department to relocate their dispensary.

 

c)         Dispensing organizations that apply to relocate a dispensary to a new location pursuant to this Section will be approved, subject to all other statutory and administrative requirements, if:

 

1)         The proposed location is within the same BLS region, as defined in 68 Ill. Adm. Code 1291.10 that the dispensing organization's corresponding conditional license was awarded in; or

 

2)         The proposed location is in the same geographic district as those geographic districts are defined in 68 Ill. Adm. Code 1290.20, if the original dispensing organization license was issued pursuant to Section 15-15 of the Act; and

 

3)         The adult use dispensing organization shall submit the fee required for the relocation of its existing associated medical registration.  This shall be the only fee required for the same-site licensee to relocate.

 

d)         The Department shall approve or deny an application to relocate under subsection (b) within 30 calendar days of receiving a completed application.

 

e)         If the Department does not approve or deny an application to relocate under subsection (a) within 30 calendar days of receiving a completed application, the application shall be deemed to be approved.

 

f)         If the Department denies an application to relocate pursuant to subsection (a), it shall do so in writing and provide a specific reason for the denial.

 

g)         An application to relocate shall be deemed complete upon submission of all documents required by the application form provided by the Department.

 

h)         If, upon reviewing the application, the Department discovers any documentation required by the Department's application to relocate is missing, the Department will request the missing documentation.  In this case, the application is not complete until the missing documentation is submitted.

 

i)          After receiving the Department's approval to relocate under subsection (a), the adult use dispensing organization license shall submit floorplans of the new location for the Department's approval in a form or manner prescribed by the Department.  The Department shall approve or deny the floorplans within 10 business days of the Department's receipt of the floorplans.

 

j)          Prior to the commencement of operations at a new location that was approved by the Department, the adult use dispensing organization license must also pass a building and site inspection conducted by the Department in accordance with Section 15-60(j)(5) of the Act.  The adult use dispensing organization license shall request a building and site inspection of the new site on forms provided by the Department.  The Department shall schedule a building and site inspection within 10 business days upon receiving the adult use dispensing organization license's request for a building and site inspection.

 

(Source:  Added at 48 Ill. Reg. 13377, effective August 20, 2024)

 

Section 1291.230  Changes to a Conditional Adult Use Dispensing Organization License and Location Parameters

 

a)         A conditional adult use dispensing organization license cannot be sold, transferred, or assigned and the conditional license holder cannot in any way change its ownership structure, including by removing or adding any principal officers, except in the event of the death of a principal officer.

 

b)         Notwithstanding subsection (a), this prohibition does not preclude third parties who are not registered as principal officers from investing in, lending to, or otherwise providing capital to the conditional adult use dispensing organization license holder.

 

c)         Pursuant to this Section, third parties are not required to register as principal officers of the conditional adult use dispensing organization license holder so long as any third party interest cannot be realized or otherwise vest until the Conditional Adult Use Dispensing Organization License holder is issued a corresponding Adult Use Dispensing Organization License under Section 15-36.  In order to realize that interest or have the interest vest, all third parties are subject to the Department's approval processes under Section 15-60(b) of the Act, either through the sale or transfer of the Adult Use Dispensing Organization License to the third party or through the third party's registration and approval as principal officer to the Adult Use Dispensing Organization License holder.

 

d)         In order to become operational, a conditional licensee shall be issued an adult use dispensing organization license pursuant to Section 15-36 of the Act by the conditional license's expiration date.

 

e)         In order to identify or find a physical location, a conditional licensee shall provide proof of its physical location to the Department at least 30 days prior to the conditional license's expiration date. Proof shall include, but is not limited to, one of the following:

 

1)         proof of building ownership by the conditional licensee;

 

2)         agreement to purchase building or lease that is dependent on zoning or state license approval;

 

3)         signed lease for the term of the initial license; or

 

4)         proof of zoning approval or application for zoning approval.

 

f)         The Department may rescind a conditional license even after submitting proof in accordance with subsection (e), if, after an unreasonable time and considering the totality of the conditional license's steps towards becoming operational, the conditional licensee has not become operational as identified in subsection (d).

 

g)         A conditional license holder shall provide evidence that the location is not within 1,500 feet of an existing dispensing organization.

 

(Source:  Added at 48 Ill. Reg. 13377, effective August 20, 2024)

SUBPART D: DISPENSING ORGANIZATION REQUIREMENTS

 

Section 1291.300  Security Requirements

 

a)         A dispensing organization shall develop and implement a security plan to deter and prevent improper entry into the dispensary and theft of cannabis or currency.

 

b)         Security measures in the plan shall include, but not be limited to, the following:

 

1)         Establishing a locked door or barrier between the dispensary's public entrance and the limited access area;

 

2)         Preventing individuals from remaining on the premises if they are not engaging in activity permitted by the Act or this Part.  Any physical removal shall comply with State and federal laws;

 

3)         Maintaining a policy that addresses the maximum capacity;

 

4)         Dispensing all cannabis from the restricted access area, which may include a pass-through window into the vaults. Any pass-through window from the vault to the restricted access area shall be capable of being closed and locked when not in use and shall not contain an opening greater than 9 inches;

 

5)         Storing cannabis during all hours in an enclosed locked room or cabinet that is accessible only to dispensing organization agents;

 

6)         Storing cannabis during non-operational hours in a locked reinforced vault room;

 

7)         Storing currency during non-operational hours in a locked reinforced vault room or other location in a manner as to prevent diversion, theft or loss;

 

8)         Keeping the reinforced vault room securely locked and protected from unauthorized entry at all times;

 

9)         Keeping an electronic daily log of dispensing organization agents who access the reinforced vault room;

 

10)       Maintaining all locks and security equipment in good working order including a manual lock on all doors leading to the exterior of the dispensing organization;

 

11)       Maintaining an operational security and alarm system at all times;

 

12)       Preventing keys from being left in locks or stored in a location accessible to individuals other than specifically authorized personnel;

 

13)       Maintaining integrity of security systems, including, but not limited to, limiting access to combination numbers, passwords or other security measures to specifically authorized agents;

 

14)       Ensuring the dispensary interior and exterior premises are sufficiently lit to facilitate surveillance;

 

15)       Ensuring that trees, bushes and other foliage outside of the dispensary premises do not allow for an individual or individuals to conceal themselves and that trees, bushes, and other foliage outside of the dispensary premises do not obstruct the view of the perimeter of the dispensary;

 

16)       Developing policies and procedures for immediately securing all product and currency following any instance of diversion, theft or loss of cannabis; for conducting an investigation into the cause of the diversion, theft, or loss; and to remediate any deficiencies that may have allowed the diversion, theft, or loss to occur;

 

17)       Developing sufficient additional safeguards in response to any special security concerns, or as required by the Department; and

 

18)       Installing counters which separate limited access areas from restricted access areas which are at least 48" in height, except counters spanning up to 36" in length may be reduced to no lower than 33" and not higher than 36" in height. Dispensing organizations operating before January 1, 2023, are exempt from this requirement until the time that they move locations.

 

c)         A dispensing organization shall provide additional security measures as needed and appropriate for the community where it operates.  (Section 15-100(f) of the Act)

 

d)         Restricted Access Areas

 

1)         All restricted access areas must be identified by the posting of a sign that shall be a minimum of 12" x 12" and that states "Do Not Enter – Restricted Access Area – Authorized Personnel Only" in lettering no smaller than 1" in height.

 

2)         All restricted access areas shall be clearly described in the floor plan of the dispensing organization, in the form and format directed by the Department, reflecting walls, partitions, counters and all areas of entry and exit.  The floor plan shall show all storage, disposal and retail sales areas.

 

3)         All restricted access areas must be secure, with locking devices that prevent access from the limited access areas.  (Section 15-100(g) of the Act)

 

e)         Security and Alarm Systems

 

1)         A dispensing organization shall have a security system designed to monitor, prevent and detect unauthorized intrusion, and theft or loss of cannabis or currency.  The system shall use commercial grade equipment and be installed by an Illinois-licensed private alarm contractor or private alarm contractor agency.  The system shall include, at a minimum:

 

A)        A perimeter alarm on all entry points to the dispensary;

 

B)        Glass break protection and security shatterproof film on perimeter windows;

 

C)        A failure notification system that provides an alert to designated dispensing organization agents within five minutes of any operational failure of the surveillance system.  The alert must be by phone or text message;

 

D)        A sufficient number of panic and hold up buttons and alarms, a duress alarm, and an after-hours intrusion detection alarm, each of which will directly or indirectly notify the Public Safety Answering Point ("PSAP") for the law enforcement agency having primary jurisdiction;

 

E)        Security equipment to deter and prevent unauthorized entrance into the dispensary, including electronic door locks on the doors in or providing access to limited and restricted access areas, and devices or a series of devices to detect unauthorized intrusion.  Dispensing organizations must have video surveillance capable of producing images that allow for facial recognition at each door leading to the exterior of the dispensary;

 

F)         Video surveillance monitors with 19-inch screens or larger;

 

G)        Video surveillance that provides unobstructed views of all enclosed dispensary areas, unless prohibited by law.  The surveillance equipment used must capture the image, with clear and certain identification, of any person entering or exiting the limited access area;

 

H)        Video surveillance that provides unobstructed views of all outside areas, the storefront, and the parking lot.  The surveillance equipment used must capture the image, with clear and certain identification, of any person entering or exiting the dispensary, the immediate surrounding area, and the license plates of vehicles in the parking lot;

 

I)         Video surveillance at each point-of-sale terminal which captures the sale, the individuals, and the computer monitors used for the sale.  The surveillance equipment used must capture the image, with clear and certain identification of any person involved in the sale;

 

J)         Video surveillance, available for immediate viewing by the Department, that provides 24-hour recordings which are correctly time and date stamped.  Recordings shall be retained for no less than 90 calendar days, and may not be deleted without Department approval if the dispensing organization is aware of the loss or theft of cannabis; a pending criminal, civil or administrative investigation; or a legal proceeding for which the recording may contain relevant information;

 

K)        Video surveillance that will immediately and at any time produce a clear, color still photo from the surveillance video, either live or recorded;

 

L)        Video surveillance that will export still images in a JPG, BMP, GIF, or JPEG image format.  Exported video shall have the ability to be archived in a format that ensures authentication of the video and guarantees that no alteration of the recorded image has taken place.  Exported video shall also have the ability to be saved in a file format that can be played on a standard computer operating system.

 

M)       Any video surveillance that is required to produce facial recognition compliant images shall be at a minimum of 80 pixels per camera.

 

2)         All security system equipment and recordings shall be maintained in good working order, in a secure location so as to prevent theft, loss, destruction or alterations.

 

3)         Access to surveillance monitoring recording equipment shall be limited to persons that are essential to surveillance operations, law enforcement, security system service personnel and Department personnel.  A current list of authorized dispensary agents and service personnel that have access to the surveillance equipment must be available to the Department upon request.

 

4)         All security and video surveillance equipment shall be inspected and tested at regular intervals, not to exceed one month from the previous inspection and test to ensure the systems remain functional.

 

5)         The security system shall provide protection against theft and diversion that is facilitated or hidden by tampering with computers or electronic records.

 

6)         In the event of a power outage, the dispensary shall ensure all access doors remain secure and any video surveillance system remains fully operational for no less than four hours.

 

7)         The dispensing organization must immediately report any security system outage to the Department, including, but not limited to, any loss of video recordings, and must submit an outage report in the form and format directed by the Department within five calendar days after the outage.

 

f)         All electronic video surveillance monitoring must record at least the equivalent of 8 frames per second and be available to the Department and ISP 24 hours a day in real-time via a secure web-based portal with reverse functionality.

 

g)         A dispensary shall have a reinforced vault built to the specifications of this subsection (g), unless it is a dispensing organization which operated before January 1, 2023. Dispensing organizations which operated before January 1, 2023, are exempt from this subsection (g) until the time that they move locations:

 

1)         The walls, floors, and ceilings of a vault shall be constructed of:

 

A)        At least 8" of reinforced concrete; or

 

B)        All of the following:

 

i)          18-gauge studs made of galvanized sheet metal meeting requirements of American Society for Testing and Materials (ASTM) A1003;

 

ii)         9-gauge, Type II, Class 1 carbon steel security mesh and attachment clips meeting ASTM F1267 on either side of the studs; and

 

iii)        Comparable materials and standards as approved by the Department.

 

2)         The door and frame unit of the vault shall conform to the following specifications or the equivalent:  30 man-minutes against surreptitious entry, 10 man-minutes against forced entry, 20 man-hours against lock manipulation and 20 man-hours against radiological techniques;

 

3)         A vault, if operations require it to remain open for frequent access, shall be equipped with a "day-gate" which is self-closing and self-locking, or the equivalent, for use during the hours of operation in which the vault door is open;

 

4)         The walls or perimeter of a vault shall be equipped with an alarm, which upon unauthorized entry transmits a signal directly to a central station protection company, a local or State police agency which has a legal duty to respond or a 24-hour control station operation by the registrant; and

 

5)         The door of a vault shall be equipped with contact switches.

 

h)         Approved Vendor List.  A dispensing organization shall submit a list to the Department of the names and contact information of all service professionals who will work at the dispensary for approval.  The list shall include a description of the type of business or service provided.  Changes to the approved vendor list shall be provided to the Department within five calendar days after any changes are made.  No service professional shall work in the dispensary until the individual's name is provided to the Department on the approved vendor list and the Department confirms approval.  A dispensing organization may permit a service professional who is not otherwise on the approved vendor list in the event of an emergency and after a good faith attempt to obtain the Department's pre-approval. In an emergency, the dispensing organization shall inform the Department as soon as possible of the event and the service professional's role.  Examples of service professionals include, but are not limited to, cannabis transporters, IT professionals, security professionals, cleaning services, and other individuals whose work requires them to be within the actual dispensary.

 

(Source:  Added at 48 Ill. Reg. 13377, effective August 20, 2024)

 

Section 1291.301  Minors Prohibited in Dispensary

 

a)         Unless otherwise authorized pursuant to the Compassionate Use of Medical Cannabis Program Act or the Act, no persons under the age of 21 shall be allowed entry into a dispensing organization.

 

b)         Each dispensing organization is responsible for checking and verifying customer identification prior to any customer entering the limited access area.  Each dispensing organization is responsible for all individuals entering the dispensing organization.

 

c)         Each dispensing organization shall use an electronic reader or electronic scanning device to scan a purchaser's government-issued identification if scanning the identification is possible in accordance with Section 10-20 of the Act.  Government-issued identification that cannot be scanned may still be accepted at the dispensing organization's discretion.

 

d)         Dispensing organizations may accept identification that does not contain an expiration date in order to verify the age of a purchaser, so long as the dispensing organization is otherwise able to verify the validity of the identification.  This does not include an expired identification document, unless otherwise permitted by law.

 

e)         As used in this Section, "government-issued identification" means a document issued by a unit of government, foreign or domestic, which identifies, at a minimum, the name, image, and date of birth of the Individual.  "Government-issued identifications" include, but are not limited to, passports; driver's licenses; temporary visitor driver's licenses; consular identification cards; international election identification cards; tribal identification cards and indigenous reservation government identification cards; visas; permanent resident cards; and municipal, local, or state identification cards.

 

(Source:  Added at 48 Ill. Reg. 13377, effective August 20, 2024)

 

Section 1291.305  Signage

 

All of the required signage in this Part shall be hung no lower than 4' and no higher than 9' from the floor unless the height restrictions are not feasible to comply with and shall not be obstructed.

 

a)         All dispensing organizations must display placards that state the following:

 

1)         "Cannabis consumption can impair cognition and driving, is for adult use only, may be habit forming, and should not be used by pregnant or breastfeeding women."; and

 

2)         "Adult Use Purchasers are not required to disclose personal information to the dispensing organization in order to purchase cannabis or cannabis infused products.  Dispensing organizations must allow anonymous purchases, if requested."

 

b)         Any dispensing organization that sells edible cannabis-infused products must display placards that state the following:

 

1)         "Edible cannabis-infused products were produced in a kitchen not subject to public health inspections that may also process common food allergens."; and

 

2)         "The effects of cannabis products can vary from person to person, and it can take as long as two hours to feel the effects of some cannabis-infused products.  Carefully review the portion size information and warnings contained on the product packaging before consuming."

 

c)         All dispensing organizations shall prominently post notices inside the dispensing organizations identifying the following activities that are strictly prohibited and punishable by law:

 

1)         No minors permitted on the premises unless the minor is a minor qualifying patient under the Compassionate Use of Medical Cannabis Program Act;

 

2)         Distribution of adult use cannabis to persons under the age of 21 is prohibited;

 

3)         Transportation of cannabis or cannabis products across state lines is prohibited;

 

4)         Cannabis remains federally illegal; and

 

5)         Smoking cannabis in a public place is prohibited.

 

d)         Dispensing organizations licensed under Section 115 of the Compassionate Use of Medical Cannabis Program Act shall post the signage in subsection (c)(1) notice as written. Organizations licensed under Section 15-65 of the Cannabis Regulation and Tax Act shall post the subsection (c)(1) notice stating, "no minors permitted on the premises".

 

e)         All of the required signage in this Part shall be no smaller than 24" tall by 36" wide, with typed letters no smaller than 2".  The signage shall be clearly visible and readable by customers.  The signage shall be placed in the area where cannabis and cannabis-infused products are sold and may be translated into additional languages as needed.  The Department may require a dispensary to display the required signage in a different language, other than English, if the Secretary deems it necessary.

 

f)         Handouts shall not be used in place of the required signage.

 

(Source:  Added at 48 Ill. Reg. 13377, effective August 20, 2024)

 

Section 1291.308  Purchaser Privacy

 

a)         Dispensing organizations are prohibited from obtaining, collecting, maintaining, recording, and/or storing a purchaser's personal information from the transaction itself without the purchaser's consent.  Any identifying or personal information of a purchaser obtained or received during a transaction shall not be retained, used, shared, or disclosed for any purpose except as authorized by the Act or this Part.  Dispensaries shall ensure their internal systems delete all purchaser personal information within 24 hours after any purchase is completed.

 

b)         Personal information includes, but is not limited to, a purchaser's name, address, birthdate, and/or email address.

 

(Source:  Added at 48 Ill. Reg. 13377, effective August 20, 2024)

 

Section 1291.310  Inventory Control System

 

a)         A dispensing organization AIC shall have primary oversight of the dispensing organization's State Verification System and Point of Sale System.  The inventory Point of Sale System shall be real-time, web-based and accessible by the Department 24 hours a day, seven days a week.

 

b)         A dispensing organization shall establish an account with the State Verification System that documents:

 

1)         Each sales transaction at the time of sale;

 

2)         Each day's beginning inventory, acquisitions, sales, disposal and ending inventory;

 

3)         All acquisitions of cannabis and cannabis-infused products from a cultivation center, craft grower, infuser, transporter, or dispensary including:

 

A)        A description of the products including the quantity, strain, variety and batch number of each product received;

 

B)        The name and license identification number of the cultivation center, craft grower, infuser, transporter, or dispensary providing the cannabis and cannabis infused products;

 

C)        The name and license identification number of the cultivation center or transporter agent delivering the cannabis;

 

D)        The name and license identification number of the dispensing organization agent receiving the cannabis; and

 

E)        The date of acquisition.

 

4)         The disposal of cannabis, including:

 

A)        A description of the products being disposed, including the quantity, strain, variety, batch number and reason for the cannabis being disposed;

 

B)        The method of disposal; and

 

C)        The date and time of disposal.

 

c)         A dispensing organization shall use a point of sale system that establishes and maintains an interface with the State Verification System to track the sale of cannabis, consistent with the Act and this Part.

 

d)         Upon cannabis delivery, a dispensing organization shall confirm the product's name, strain name, weight, identification number, and quantity on the manifest matches the information on the cannabis product label and package.  The product name listed and the weight listed in the State Verification System shall match the product packaging.

 

e)         An AIC shall conduct a daily physical count of all inventory, except as permitted under subsection (e)(4) and also conduct a reconciliation documenting and balancing cannabis inventory by confirming the State Verification System matches the dispensing organization's point of sale system and the amount of physical product at the dispensary.  The daily physical count shall include checking the use-by date for all inventory and quarantining any expired product.

 

1)         A dispensing organization must receive Department approval prior to completing an inventory adjustment.  It shall provide a detailed reason for the adjustment.  Inventory adjustment documentation must be kept at the dispensary for two years from the date performed.

 

2)         If, after the daily inventory reconciliation the dispensing organization identifies an imbalance in the amount of cannabis due to mistake, the dispensing organization shall determine how the imbalance occurred and, immediately upon discovery, take and document corrective action.  If the dispensing organization cannot identify the reason for the mistake within two calendar days after first discovery, it shall inform the Department immediately in writing of the imbalance and the corrective action taken to date.  The dispensing organization shall work diligently to determine the reason for the mistake.  The dispensing organization shall complete its investigation within 10 business days.  If the investigation is not complete within 10 business days, the dispensary shall notify the Department of next steps and a contemplated deadline.  The Department may extend the investigation period upon a showing of good cause.

 

3)         If, after the daily inventory reconciliation or through other means, the dispensing organization identifies an imbalance in the amount of cannabis due to theft, criminal activity or suspected criminal activity, the dispensing organization shall immediately determine the manner in which the theft or criminal activity occurred and take and document corrective action.  Within 24 hours after the first discovery of the reduction due to theft, criminal activity or suspected criminal activity, the dispensing organization shall inform the Department and ISP in writing.

 

4)         A dispensing organization is not required to perform a daily physical count of bulk cannabis inventory if stored pursuant to the requirements in this Part.  The dispensing organization must verify daily that any bulk cannabis inventory meets the storage requirements of this subsection (e)(4).  If the packaging of bulk cannabis inventory becomes torn or tampered with it must be recounted and resealed before the completion of the next daily physical count.  Bulk cannabis inventory must be counted monthly by physically removing each item from the sealed containers, counting each item, and checking the expiration date.  Bulk cannabis inventory must then be resealed and labeled with the last date it was counted.  All expired product must be destroyed in accordance with Section 1291.325.  For the purposes of this Section "bulk cannabis inventory" means cannabis and cannabis-infused products stored in the reinforced vault in clear, heat-sealed or taped shrink wrap bags or sheeting that is labeled with the date the inventory is sealed, the last four digits of the batch number, the number of items contained within the wrapping and the date the inventory was last counted.  Bulk cannabis inventory is included in the dispensing organization's total inventory available for sale.

 

5)         The AIC shall certify their consideration of the factors in this subsection (e)(5) on a form provided by the Department.

 

f)         A dispensing organization shall maintain the documentation required in this Section in a secure locked location at the dispensing organization.

 

g)         A dispensing organization shall ensure the oldest stock of cannabis and cannabis-infused product is dispensed first.  A dispensing organization may deviate from this requirement upon Department approval.

 

h)         If cannabis is abandoned at a dispensing organization, it shall be accounted for and destroyed in compliance with this Part.

 

(Source:  Added at 48 Ill. Reg. 13377, effective August 20, 2024)

 

Section 1291.320  Returns and Refunds

 

A dispensing organization may create a policy allowing for the return and refund of damaged, inadequate or erroneously dispensed cannabis subject to the following provisions:

 

a)         The policy shall not permit the resale of any returned cannabis product if the tamper-evident seal has been broken or the product has left the premises.

 

b)         Any returned product must be entered into the State Verification System within five calendar days after the return.

 

c)         All returned product that has either left the premises or has the tamper-evident seal broken must be destroyed in accordance with Section 15-90 of the Act.

 

(Source:  Added at 48 Ill. Reg. 13377, effective August 20, 2024)

 

Section 1291.325  Destruction of Cannabis and Cannabis Infused Products

 

a)         Any cannabis and cannabis-infused products to be destroyed shall be destroyed by rendering it unusable following the methods set forth in this Section.

 

b)         Any product to be destroyed shall be destroyed on the same day and time weekly unless otherwise approved by the Department on a case-by-case basis.  A dispensing organization shall notify the Department and ISP of this day and time at the initial registration inspection.  Any change in the day and time must be communicated to the Department and ISP at least three business days before the implementation.

 

c)         The allowable method to render cannabis waste unusable is by grinding and incorporating the cannabis waste with other ground materials so the resulting mixture is at least 50% non-cannabis waste by volume.  Other methods to render cannabis waste unusable must be approved by the Department before implementation.  Material used to grind with the cannabis falls into two categories, compostable waste and non-compostable waste.

 

1)         Compostable Mixed Waste:  Cannabis waste to be disposed as compost feedstock or in another organic waste method (e.g., anaerobic digester) may be mixed with the following types of waste materials:

 

A)        Food waste;

 

B)        Yard waste; or

 

C)        Other wastes as approved by the Department (e.g., agricultural material, biodegradable products and paper, clean wood, fruits and vegetables, plant matter).

 

2)         Non-compostable Mixed Waste:  Cannabis waste to be disposed in a landfill or by another disposal method may be mixed with the following types of waste materials:

 

A)        Paper waste;

 

B)        Cardboard waste;

 

C)        Plastic waste;

 

D)        Soil; or

 

E)        Other wastes as approved by the Department (e.g., non-recyclable plastic, broken glass, leather).

 

d)         Cannabis waste rendered unusable following the methods described in this Section can be disposed.  Disposal of the cannabis waste rendered unusable may be delivered to a permitted solid waste facility for final disposition.  Examples of acceptable permitted solid waste facilities include:

 

1)         Compostable Mixed Waste:  Compost, anaerobic digester or other facility with approval of the jurisdictional health department.

 

2)         Non-compostable Mixed Waste:  Landfill, incinerator or other facility with approval the jurisdictional health department.

 

e)         All cannabis flower product shall be weighed, recorded and entered into the State Verification System prior to rendering it unusable.  This event shall be performed by an AIC, or under the supervision of the AIC, and conducted under video surveillance.

 

f)         Electronic documentation of destruction and disposal shall be maintained for a period of at least five years.

 

(Source:  Added at 48 Ill. Reg. 13377, effective August 20, 2024)

 

Section 1291.330  Recalls and Product Safety

 

a)         Voluntary Recalls

 

1)         Each dispensing organization shall have policies and procedures governing voluntary recalls of cannabis products.

 

2)         All voluntary recall policies and procedures shall include the following at a minimum:

 

A)        A mechanism reasonably calculated to contact purchasers who have, or likely have, obtained the product from the dispensary, including information on the policy for return of the recalled product.  This may include outreach via media, as necessary and appropriate;

 

B)        A mechanism to identify and contact the adult use cultivation center, craft grower, or infuser that manufactured the cannabis;

 

C)        Policies for communicating with the Department, the Department of Agriculture, and the Department of Public Health within 24 hours of discovering defective or potentially defective cannabis;

 

D)        Policies for the collection of recalled product;

 

E)        Policies for destruction of any recalled cannabis product that comply with Section 1291.325; and

 

F)         Entry of recalled product into the State Verification System prior to destruction.  (Section 15-65 of the Act)

 

3)         Voluntary recalls may be initiated at any time as determined by the dispensing organization.

 

b)         Mandatory Recalls

 

1)         The Department may require dispensing organizations to conduct a recall of a cannabis product that is adulterated, misbranded, or otherwise poses a danger to public safety.

 

2)         The dispensing organization shall maintain policies and procedures for a mandatory recall that shall include, at a minimum:

 

A)        A mechanism reasonably calculated to contact purchasers who have, or likely have, obtained the product from the dispensary, including information on the policy for return of the recalled product.  This may include outreach via media, as necessary and appropriate;

 

B)        A mechanism to identify and contact the adult use cultivation enter, craft grower, or infuser that manufactured the cannabis;

 

C)        Policies for communicating with the Department, the department of Agriculture, and the Department of Public Health within 24 hours of discovering defective or potentially defective cannabis;

 

D)        Policies for the collection of recalled product;

 

E)        Policies for destruction of any recalled cannabis product that comply with Section 1291.325; and

 

F)         Entry of recalled product into the State Verification System prior to destruction.  (Section 15-65 of the Act)

 

3)         The Department may issue a mandatory recall and require dispensing organizations to immediately cease distribution of a cannabis product and recall the cannabis if the Department determines both of the following:

 

A)        The cultivation, manufacture, distribution, or sale of the cannabis or cannabis product creates or poses an immediate and serious threat to human life or health; and

 

B)        A recall is necessary to ensure the health and safety of affected cannabis consumers.

 

4)         The Department may require a dispensing organization to quarantine product without destruction for a minimum of 72 hours or until further notice of the Department, whichever occurs later, if the Department suspects the product is adulterated, misbranded, or otherwise poses a danger to public safety.

 

5)         The Department may require a dispensing organization to submit cannabis product that is suspected to be adulterated, defective, misbranded, or otherwise poses a danger to public safety to laboratory testing from a testing laboratory approved by the Illinois Department of Agriculture.  If the laboratory testing demonstrates the cannabis product is safe for consumption the Department may approve the dispensing organization to move the product back into active stock.

 

A)        For the purposes of this Section, "adulterated" shall include, but is not limited to, cannabis that has been tampered with by having the tamper-proof seal broken, cannabis that has been altered after it has been packaged, or cannabis that has materially changed condition since laboratory testing.

 

B)        For the purposes of this Section, "defective" shall have the same meaning as in Section 1291.60.

 

6)         In ordering a mandatory recall of cannabis pursuant to this Section, the director of the Department shall issue an order to that effect, which shall also include affidavits sufficient to lay out the factual basis for the recall.

 

7)         Whenever the Department issues a mandatory recall, an affected dispensing organization may file a request for hearing within 30 days of the recall.  All requests for hearing and any associated proceedings shall follow the rules of Practice in Administrative Hearings at 68 Ill. Adm. Code 1110.

 

A)        In the event a dispensing organization files a request for hearing, a formal hearing shall begin within 30 days of the filing of the request and shall be completed without appreciable delay.

 

B)        The Department shall bear the burden of proving the recalled cannabis is defective, adulterated, misbranded, or otherwise poses a danger to public safety.

 

(Source:  Added at 48 Ill. Reg. 13377, effective August 20, 2024)

 

Section 1291.335  Sale of Non-Cannabis Items

 

a)         Dispensing Organizations shall only sell items that are cannabis, cannabis paraphernalia, or related supplies. 

 

1)         "Related supplies" means branded merchandise including, but not limited to, clothing, water bottles, or keychains.  Merchandise may include the dispensing organization's name and logo in compliance with Section 55-20 of the Act.

 

2)         "Related supplies" also includes non-branded decorative or material items such as periodicals, ornaments, pins, or similar items.

 

3)         "Related supplies" also includes pre-packaged food and pre-packaged non-alcoholic beverages.

 

4)         The Department may approve additional items not specifically identified above at a licensed dispensing organization's request. In doing so, the Department shall consider the similarity of the items to the criteria listed in this subsection (a).

 

b)         Dispensing organizations may allow third-party vendors to promote or advertise in the public access area of the dispensary.  All advertisements by third-party vendors must comply with Section 55-20 of the Act.  The dispensing organization is responsible for ensuring compliance with the Act and this Part for all third-party vendors promoting or advertising inside of the dispensary.  The dispensing organization shall give the Department written notice of all third-party vendors at least three business days in advance of promoting or advertising.

 

(Source:  Added at 48 Ill. Reg. 13377, effective August 20, 2024)

 

Section 1291.340  Onsite Consumption Lounges

 

a)         Dispensing organizations may operate an onsite consumption lounge within its dispensary only if its unit of local government has authorized it to do so pursuant to Section 55-25 of the Act.  Proof of authorization must be submitted to the Department.

 

b)         Dispensing organizations may only operate an onsite consumption lounge at the dispensary's address or in a building contiguous to the dispensary.  If the dispensary's onsite consumption lounge is within the dispensary, the dispensary shall maintain a designated area for the purpose of the heating, burning, smoking, or consuming activities that is separate from the remainder of the dispensary.

 

c)         If specially authorized by its unit of local government, dispensaries may operate an outdoor onsite consumption lounge.  Outdoor consumption shall not be visible to the public (high fences, shrubs, etc., are permissible); and the interior of the onsite consumption lounge and dispensary shall be separated from the outdoor onsite consumption lounge by a locked and secured door. Patrons of the outdoor onsite consumption lounge may re-enter the interior onsite consumption lounge and dispensary's limited access area and bathrooms for the duration of their visit so long as a security guard, licensed agent, AIC or principal officer is stationed at the point of re-entry during all hours of the lounge's hours of operation. Onsite consumption lounge and dispensary staff may enter and exit all sections of the facility.

 

d)         Dispensaries which are authorized by their unit of local government to operate an onsite consumption lounge at its dispensary shall abide by all local rules, regulations, and ordinances, including, but not limited to:  zoning regulations, local health and safety standards, and fire safety regulations.

 

e)         Dispensaries seeking to operate an onsite consumption lounge at its dispensary must be approved by the Department in a form or manner prescribed by the Department.  In seeking approval, the dispensary shall submit, at a minimum, the following:

 

1)         A copy of the unit of local government's authorization to operate an onsite consumption lounge and any supporting documents thereof;

 

2)         A copy of the proposed floor plan of the onsite consumption lounge;

 

3)         Identification of all staff who will work at the onsite consumption lounge;

 

4)         A copy of the dispensary's policies and procedures for the onsite consumption lounge, including, but not limited to, any policies and procedures regarding pricing, security measures, staffing plans, hours of operation, etc. and those required by subsection (g)(9);

 

5)         A copy of the security plan of the onsite consumption lounge;

 

6)         A copy of the lease or landlord consent to operate an onsite consumption lounge or proof of ownership of the land the onsite consumption lounge is located; and

 

7)         A copy of the policies and procedures of the onsite consumption including all information required by Sections 15-65 and 15-110 of the Act.

 

f)         Dispensaries are prohibited from initiating any material changes to the consumption lounge without prior approval by the unit of local government and the Department.

 

g)         A dispensary may operate an onsite consumption lounge subject to the following conditions:

 

1)         All employees of an onsite consumption lounge shall be a licensed agent or agent-in-charge of the dispensary;

 

2)         Dispensaries shall verify all individuals entering an onsite consumption lounge are in compliance with Section 10-20 of the Act;

 

3)         Cannabis and cannabis infused products shall not be dispensed in the onsite consumption lounge unless in accordance with 410 ILCS 705/15-100(c)(5);

 

4)         Onsite consumption lounges must be separate and distinct from the remainder of the dispensary, including the public access area, the limited access area, and the restricted access area, and is separated from the remainder of the dispensary by a door capable of being locked; 

 

5)         Onsite consumption lounges shall not be publicly accessible (except as otherwise permitted as a point of re-entry under subsection (c)), unless the, entrance also includes its own public access area and security guard during all hours of operation;

 

6)         Onsite consumption lounges shall not hold any liquor license issued under 235 ILCS 5/5-1 or any gaming license issued under 230 ILCS 40/90;

 

7)         Onsite consumption lounges are permitted to serve food and drinks so long as the following conditions are met:

 

A)        The onsite consumption lounge has obtained the necessary certifications or licenses to serve food, other than cannabis-infused products, that are required by the unit of local government and State law;

 

B)        The onsite consumption lounge complies with the Illinois Food Code (77 Ill. Adm. Code 750) and the Food Handling Regulation Enforcement Act [410 ILCS 625]; and

 

C)        Such food or drink qualifies as a "related supply" as that term is defined in Section 1291.335.

 

8)         The onsite consumption lounge shall have security cameras, which comply with Section 15-100(i)(2) of the Act, facing any areas of ingress or egress.  Cameras are not required to record those consuming products, only those entering and leaving through areas of ingress or egress;

 

9)         All cash and currency collected at the onsite consumption lounge shall be treated the same as cash and currency collected by the dispensary and shall be stored securely in compliance with Section 15-100 of the Act;

 

10)       Copy of internal policies shall be kept onsite within the onsite consumption lounge that shall include, at a minimum:

 

A)        A business plan that includes a description of the proposed hours of operation;

 

B)        A responsible operations plan that includes a detailed explanation of how employees will monitor and prevent over-intoxication, underage access to the onsite consumption lounge, the illegal sale or distribution of cannabis or cannabis-infused products within the onsite consumption lounge, and any other potential criminal activity on the premises.  Operation plans may also identify how to best prevent impaired driving by encouraging consumers to consider alternative transportation options;

 

C)        A documented employee training plan that addresses all components of the responsible operations plan; and

 

D)        A cannabis product destruction and waste management plan that meets the requirements of this Part, as applicable, for destroying and disposing of cannabis waste left at the onsite consumption lounge.

 

11)       Only persons 21 years of age or older shall be permitted access to onsite consumption lounges;

 

12)       The onsite consumption lounge shall have a smoke-free area for both employees and the Department to monitor the onsite consumption lounge;

 

13)       The onsite consumption lounge shall have a ventilation system that directs air from the consumption area to the outside of the building through a filtration system sufficient to remove visible smoke, consistent with all applicable building codes and ordinances, and adequate to eliminate odor at the property line, if consumption by inhalation is permitted;

 

14)       If cannabis is abandoned in the consumption lounge, it must be destroyed in compliance with Section 1291.325;

 

15)       Dispensaries may charge a fee for entrance and usage of onsite consumption lounges; and

 

16)       Any other requirements that the Department deems necessary based on local zoning authorities or unique security concerns.

 

h)         Onsite consumption lounges remain subject to random inspections by the Department.

 

i)          If Department inspectors or emergency personnel enter the onsite consumption lounge and upon the inspector's or emergency personnel's direction, a dispensary is responsible for ensuring that all consumption and other activities, including sales within the dispensary, cease until the personnel have completed their investigation or services and have left the premises.

 

j)          State standards and requirements.  Any standards, requirements, and rules regarding the health and safety, environmental protection, testing, security, food safety, and worker protections established by the State shall be the minimum standards for all licensees with onsite consumption lounges under the Act statewide, where applicable.  Knowing violations of any State or local law, ordinance, or rule conferring worker protections or legal rights on the employees of a licensee may be grounds for disciplinary action under the Act, in addition to any penalties established by another unit of government.

 

(Source:  Added at 48 Ill. Reg. 13377, effective August 20, 2024)

SUBPART E: SOCIAL EQUITY CRITERIA LOTTERY

 

Section 1291.400  Conditional License Lottery under Section 15-35.20(c) of the Act

 

a)         The Department may distribute no more than 55 conditional licenses by lot pursuant to the requirements of Section 15-35.20(c) of the Act and this Part.

 

b)         The requirements contained in Sections 1291.400 through 1291.440 shall only apply to the 55 conditional licenses issued pursuant to Section 15-35.20(c) of the Act.

 

c)         All licenses issued pursuant to this Section shall be drawn by lot on the same day to the extent possible.

 

d)         Prior to conducting any lottery pursuant to this Section, the Department shall publish on its website a list of all applicants eligible to participate in the lottery.

 

e)         After the Department publishes the list of applicants eligible to participate in the lottery, all applicants shall have 5 business days to contest the Department’s list of applicants eligible to participate in the lottery.  Any contestation must be filed on the form published on the Department's website and submitted in the manner included on that form.

 

f)         The Department will revise and republish its list of applicants eligible to participate in the lottery if it concludes that any applicants were improperly included or excluded. The republished list of applicants is not subject to contestation under subsection (e). The Department is not required to provide any additional opportunities to contest the list of applicants eligible to participate in the lottery beyond the initial contest period described in subsection (e).

 

g)         The Department may conduct a lottery at any time after the 5-business day period to contest the list of lottery participants has concluded.

 

h)         The publishing of the list of applicants to participate in the lottery, and any revised list, is not a final agency decision.  Any opportunity to contest the list shall not be considered a rehearing or an action for administrative review.

 

i)          The Department will publish the certified results of the lottery. 

 

(Source:  Added at 46 Ill. Reg. 20783, effective December 13, 2022)

 

Section 1291.405  Conditional License Distribution under Section 15-35.20(c) of the Act

 

a)         To ensure the geographic dispersion of conditional license holders, the following number of licenses issued as a result of any lottery conducted pursuant to Section 1291.400 shall be awarded in each BLS Region in the following amounts:

 

1)         Bloomington:  1

 

2)         Cape Girardeau:  1

 

3)         Carbondale-Marion:  1

 

4)         Champaign-Urbana:  1

 

5)         Chicago-Naperville-Elgin:  36

 

6)         Danville:  1

 

7)         Davenport-Moline-Rock Island:  1

 

8)         Decatur:  1

 

9)         Kankakee:  1

 

10)        Peoria:  2

 

11)        Rockford:  1

 

12)        St.  Louis:  3

 

13)        Springfield:  1

 

14)        Northwest Illinois nonmetropolitan:  1

 

15)        West Central Illinois nonmetropolitan:  1

 

16)        East Central Illinois nonmetropolitan:  1

 

17)        South Illinois nonmetropolitan:  1. (Section 15-35(a) and 15-35.10(a) of the Act)

 

b)       Applicants are prohibited from applying in more than one BLS region and are limited to one application in that BLS region.  If an applicant submits more than one application, the applicant forfeits all applications from entry into the lottery and is prohibited from being a top participant.

 

c)         Within each BLS Region, the first applicant drawn will have the first opportunity to a conditional license.  The second applicant drawn will have the second opportunity to a conditional license.  The same pattern will continue for each subsequent applicant drawn.

 

(Source:  Added at 46 Ill. Reg. 20783, effective December 13, 2022)

 

Section 1291.410  Conditional License Lottery Application under Section 15-35.20(c) of the Act

 

a)         The Department will publish an online application for applicants on the Department's website.  Paper applications will not be accepted.

 

b)         After publishing the online application, the application submission window shall remain open for submissions for a minimum of 10 business days.  Applications must be submitted by 5:00 P.M. Central Time on the last day of the application submission window and no applications will be accepted after the application submission window closes.

 

c)         A principal officer cannot be on more than one application.  The Department shall require that all applicants provide each of its principal officers’ Social Security Numbers or Individual Taxpayer Identification Number, and any other unique, identifying information, required in the application to ensure that an individual principal officer is not listed as a principal officer on more than one application.

 

d)         All applicants shall pay a non-refundable application fee of $250, to be deposited into the Cannabis Regulation Fund.

 

e)         An application shall be accepted only if it is complete.  All incomplete applications shall be denied.  A completed application shall include the nonrefundable fee and, at a minimum, the following information:

 

1)         the applicant’s proposed entity name;

 

2)         the name of the persons filling out the application;

 

3)         the BLS Region in which the applicant is applying;

 

4)         the names, Social Security Numbers or Individual Taxpayer Identification Number, home addresses, birthdates, phone numbers, and email addresses, for all proposed principal officers of the proposed entity;

 

5)         the identification of and contact information, including phone number and email address, for a primary and alternate contact of the proposed entity, at least one of whom must also be a principal officer;

 

6)         an acknowledgment that if awarded an opportunity for a conditional license in the lottery,  the business entity is 51% or more owned or controlled by one or more individuals who each meet the combination of at least one or the criteria under subsection (e)(6)(A) (Criteria A) and one of the criteria under subsection (e)(6)(B) (Criteria B).  This does not mean multiple individuals need to meet identical criteria, but each individual must meet at least one criteria from Criteria A and one criteria from Criteria B.

 

A)        Criteria A (only 1 required):

 

i)          An individual who has resided for at least 5 of the preceding 10 years in a census tract that has a poverty rate of at least 20% according to the latest 5-year American Community Survey (Table S1701: Poverty Status in the Past 12 Months) that is publicly available at the start of the application submission window for the lottery conducted under Sections 1291.400 through 1291.440. The data set is available at https://data.census.gov/cedsci/table?q=poverty%20rate&g=0100000US%241400000&tid=ACSST5Y2020.S1701;

 

ii)         An individual who has resided for at least 5 of the preceding 10 years in a census tract where at least 20% of the households receive assistance under the Supplemental Nutrition Assistance Program in the latest 5-year American Community Survey (Table S2201: Food Stamps/Supplemental Nutrition Assistance Program (SNAP)) that is publicly available at the start of the application submission window for the lottery conducted under Sections 1291.400 through 1291.440. The data set is available at https://data.census.gov/cedsci/table?q=snap%20participation&g=0100000US%241400000&tid=ACSST5Y2020.S2201;

 

iii)        An individual who has resided for at least 5 of the preceding 10 years in a census tract area classified as "low income and low access" where at least 100 households are more than one-half mile from the nearest supermarket and have no access to a vehicle or a significant number (at least 500 people) or share (at least 33%) of the population is greater than 1 mile from the nearest supermarket, supercenter, or large grocery store for an urban area or greater than 20 miles for a rural area, as classified by the latest United States Department of Agriculture Economic Research Service's Food Access Research Atlas data set that is publicly available at the start of the application submission window for the lottery conducted under Sections 1291.400 through 1291.440.  The data set is available at the United States Department of Agriculture Economic Research Service's Food Access Research Atlas, is available at https://www.ers.usda.gov/data-products/food-access-research-atlas/go-to-the-atlas;

 

iv)        An individual who has received Medicaid, Supplemental Security Income, Social Security Disability, and/or subsidized housing for at least 5 of the preceding 10 years; and/or,

 

v)         An individual who has resided for at least 5 of the preceding 10 years in a census tract in the top 15^th percentile for the percent of residents in the census tract failing to graduate from High School in that state, as classified by the latest 5-year American Community Survey (Table S1501: Educational Attainment) that is publicly available at the start of the application submission window for the lottery conducted under Sections 1291.400 through 1291.440. The data set is available at https://data.census.gov/cedsci/table?q=s1501&g=0100000US,%241400000

 

B)        Criteria B (only 1 required);

 

i)          An individual who has been arrested for, convicted of, or adjudicated delinquent for any offense, or substantially similar offense, of Illinois, federal or other state law for:

 

•           possession of not more than 500 grams of cannabis; or

 

•           manufacture, delivery, or possession with intent to deliver, or manufacture of cannabis up to 30 grams;

 

ii)         An individual who has a family member who has been arrested for, convicted of, or adjudicated delinquent for any offense, or substantially similar offense, of Illinois, federal, or other state law for:

 

•           possession of not more than 500 grams of cannabis; or

 

•           manufacture, delivery, or possession with intent to deliver, or manufacture or cannabis up to 30 grams.

 

iii)        An individual who has been a victim of firearm injury, as those terms are defined in this Part.  This must be evidenced by either a police report or medical record.

 

C)        As soon a reasonably possible, but no later than 5 business days prior to the acceptance of applications, the Department shall make publicly available the documents applicants may use to establish eligibility under both subsection (e)(6)(A) (Criteria A) and subsection (e)(6)(B) (Criteria B).

 

7)         An acknowledgment that if awarded a conditional license, neither the entity nor any of its principal officers will violate the Act’s license number limitations.

 

8)         The acknowledgement will also include a statement or indication that the applicant understands the timeframes to do so as required in this Part.

 

f)         If an applicant fails to meet and prove the criteria identified in subsection (e)(6)(A) (Criteria A) and subsection (e)(6)(B) (Criteria B) within 45 calendar days after the date of the notice of being a top participant from the Department and any required 10 business day deficiency period or 5 business day intent to deny periods as those periods are set forth in Section 1291.420, the Department shall deny issuance of a conditional license and proceed to the next top participant as described in Section 1291.405(c).

 

g)         If two or more applications include the same principal officer, the Department will notify the applicant at its identified primary and alternate contacts and the principal officer who is listed on two or more applications, via email.  Upon this notification, the identified principal officer has 3 business days to notify the Department of its resignation from all but one of the proposed entities.  This notification shall be submitted to the Department in writing to FPR.CannabisAdministration@illinois.gov.  If the identified principal officer does not notify the Department of the principal officer’s required resignation within the required time period, each applicant notified shall forfeit its application and nonrefundable fee.

 

h)         False Information

 

1)         If the Department determines that any information on an application or in supporting documents is not truthful, the applicant associated with that application will be prohibited from:

 

A)        participating in the lottery;

 

B)        being a top participant; and

 

C)        being issued a conditional license or Adult Use Dispensing Organization License. 

 

2)         The Department shall notify the next eligible top participant drawn by lot of its opportunity for the conditional license, in accordance with Section 1291.405(c).

 

i)          If a principal officer identified on an application dies after the applicant has submitted its application but prior to the conducting of any lottery, the applicant does not need to inform the Department unless the applicant becomes a top participant eligible for a conditional license after the lottery is conducted.  If the applicant becomes a top participant, the applicant is required to follow the process identified in Section 1291.420.

 

j)          The Department will only communicate with the applicant or top participant’s primary and alternate contact regarding the applicant or top participant’s application.  In order to change its primary or alternate contact information, an applicant or a top participant must submit a request to change from the current primary or alternate contact email address the Department has on record.

 

(Source:  Added at 46 Ill. Reg. 20783, effective December 13, 2022)

 

Section 1291.420  Conditional License Post Lottery Proof Requirements under Section 15-35.20(c) of the Act

 

a)         The Department will publish a list of supporting documents (e.g., mortgage statements, bank statement, government-issued identification) that an applicant must submit in order to prove it meets the criteria required in Section 1291.410(e)(6)(A) (Criteria A) and Section 1291.410(e)(6)(B) (Criteria B) to be issued a conditional license.  This list shall be published on the Department’s website on the same day the Department opens the application submission window.

 

b)         Top participants shall have 45 calendar days after the day the lottery is certified to submit all required supporting documents to the Department via FPR.CannabisAdministration@illinois.gov or via the State file share system available upon request to the same email address.

 

c)         After a top participant has submitted its supporting documents, the Department has at least 60 calendar days to review the documentation.

 

d)         If the Department determines that the supporting documents are insufficient, the Department shall issue a deficiency notice to that top participant.  The top participant shall have 10 business days after the date that appears on the deficiency notice to submit sufficient documentation.

 

e)         If the top participant fails to provide sufficient documents after this deficiency period, the Department shall inform a top participant of its intent to deny the issuance of a conditional license prior to any denial of a conditional license.

 

f)         Top participants shall have 5 business days after the date that appears on the notice of intent to deny to contest the Department’s decision. Any contestation must be filed in accordance with 68 Ill. Adm. Code 1110.

 

g)         The Department’s final order to either affirm or revoke its intent to deny constitutes a final agency decision and may be appealed under the Administrative Review Law [735 ILCS 5/3-101].

 

h)         If the Department informs a top participant of a deficiency or of its intent to deny the issuance of a conditional license because of one of the applicant’s principal officers has violated the Act or this Part, the principal officer may resign from the top participant (or another licensee) in order for the top participant to remain eligible for a conditional license.  Proof of this resignation shall be submitted to the Department on the form published on the Department's website and submitted in the manner included on that form.

 

i)          If a principal officer of a top participant resigns after that top participant has been notified of the Department’s intent to deny, that top participant may not replace the resigned principal officer.  If a principal officer of a top participant resigns after that top participant has been notified of the Department’s deficiency notice or intent to deny, and that top participant therefore becomes ineligible to meet the requirements of the Act and this Part, the Department shall deny that top participant a conditional license.

 

j)          If the Department affirms its intent to deny, the Department shall deny issuance of a conditional license and proceed to the next to participant as described in Section 1291.420.

 

k)         If the Department denies issuance of a conditional license to a top participant, the Department shall notify the next eligible top participant drawn by lot of its opportunity for the conditional license, in accordance with Section 1291.405(c).

 

l)          The Department may issue conditional licenses to top participants in the order in which they are received by the Department.  Nothing in this subsection (l) prevents the Department from issuing conditional licenses before all top participants have submitted all necessary documentation.

 

m)        If a principal officer of an applicant dies after the submission of any application, and that applicant is then selected as a top participant, the top participant shall present proof of death to the Department.  A deceased principal officer may be replaced only if that principal officer was necessary for the top participant to remain eligible to be issued a conditional license.  If a necessary principal officer of a top participant dies prior to issuance of the conditional license, the top participant shall have 45 calendar days after the death of that principal officer to submit proof of a replacement principal officer to the Department in order to remain eligible for a conditional license.

 

n)         The Department shall deny issuance of a conditional license if it would result in a single person or entity having a direct or indirect financial interest in more than 10 Early Approval Adult Use Dispensing Organization Licenses, conditional licenses, or Adult Use Dispensing Organization Licenses.  Any entity that is awarded a conditional license that results in a single person or entity having a direct or indirect financial interest in more than 10 licenses shall forfeit the most recently issued license and suffer a penalty to be determined by the Department in accordance with section 15-145 of the Act, unless the entity declines the license at the time it is awarded.  (Section 15-30(k) of the Act)

 

(Source:  Added at 46 Ill. Reg. 20783, effective December 13, 2022)

 

Section 1291.440  Conditional Licensee Requirements under Section 15-35.20(c) of the Act

 

a)         A conditional license cannot be sold, transferred, or assigned and the conditional license holder cannot in any way change its ownership structure, including by removing or adding any principal officers, except for in the event of the death of a principal officer.

 

b)         If a principal officer of a conditional license holder dies prior to the issuance of any Adult Use Dispensing Organization License under Section 15-36 of the Act, the conditional license holder shall inform the Department of the death and submit an updated table of organization.

 

c)         A principal officer may be added to the ownership structure of a conditional license holder only in the event of replacing a deceased principal officer, subject to the Department’s approval of that principal officer.  The Department will consider, but is not limited to, the proposed principal officer's role, qualifications, and the necessity of adding a principal officer when considering the new principal officer.

 

d)         The death of a principal officer following issuance of a conditional license shall not impact the conditional license holder’s eligibility to be issued an Adult Use Dispensing Organization License under Section 15-36 of the Act.

 

e)         Identifying a Physical Location

 

1)         A conditional license holder who receives a conditional license through any lottery conducted pursuant to Section 1291.400 has 365 calendar days after the date of issuance of the conditional license to identify a physical location for the dispensing organization retail storefront.  For purposes of this subsection (e), proof of identifying a physical location includes, but is not limited to, one of the following: 

 

A)        proof of building ownership by the top participant;

 

B)        agreement to purchase building or lease that is dependent on zoning or state license approval;

 

C)        signed lease for the term of the initial license; or

 

D)        proof of zoning approval or application for zoning approval. 

 

2)         A conditional license holder shall provide evidence that the location is not within 1,500 feet of an existing dispensing organization. 

 

3)         If a conditional license holder is unable to find a suitable physical address within 365 calendar days after the issuance of the conditional license, the Department may extend the period for finding a physical address another 180 calendar days if the conditional license holder demonstrates the steps it has taken to secure a location and hardship.  If the Department denies the request for an extension or the conditional license holder is unable to become operational within 545 calendar days after being awarded a conditional license, the Department will rescind the conditional license and may proceed to the next applicant drawn in accordance with Section 121.405(c).

 

(Source:  Added at 46 Ill. Reg. 20783, effective December 13, 2022)