(309) 740-4033 tom@collateralbase.com
Victory for Hemp

Victory for Hemp

Hemp Ban Overturned

Hemp is completely legal to grow in Illinois with the proper state license.

Illinois Hemp Ban Overturned in Rural Oakland

The City of Oakland tried to ban hemp farming inside its city limits by claiming authority under the Illinois Municipal Code section regarding Urban Agricultural Areas. Collateral Base represented the prejudiced farmer and had the municipal ordinance tossed by an Illinois Court. Because the City of Oakland is not a home rule community Dillion’s Rule in Illinois barred the City from banning hemp due to its lack of authority. 

Let’s touch on what is a “home rule” or “non-home rule” municipality in Illinois. 39 States follow “Dillion’s Rule” – including Illinois – and it allows municipalities to allow themselves to govern their community with greater detail than the state law applies, but first they must become a “home rule” unit of government.

Q: What is “home rule,” why would a community want to become a home rule unit, and how?

A: In Illinois, home rule is the State constitutional authority of local governments to override the state and self-govern provided the General Assembly did not explicitly limit that power or maintain the exclusive exercise of authority in a specific area, for example the CRTA limited home rule communities from banning home grow cannabis for medical marijuana patients.

Home rule municipalities explicitly have police powers.  Article 7 of the Illinois Constitution regarding home rule provides that they “may exercise any power and perform any function pertaining to its government and affairs including, but not limited to, the power to regulate for the protection of the public health, safety, morals and welfare; to license; to tax; and to incur debt” without specific statutory authority.

 

Hemp Questions?

How home rule is different than non-home rule

Non-home rule basically bows to the state laws, unless the municipality has a statute or enumerated constitutional powers that enable it to create new ordinances. However, a home rule municipality can go beyond state regulations unless expressly pre-empted by statute and can rely on its police powers.  Here we will examine the differences between the language from the Illinois Constitution on home rule units. 

The City of Oakland went beyond its non-home rule powers when making its hemp farming ban.

Ill. Const. Art. 7, § 7 for Non-home Rule Municipalities

  1. to make local improvements by special assessment and to exercise this power jointly with other counties and municipalities, and other classes of units of local government having that power on the effective date of this Constitution unless that power is subsequently denied by law to any such other units of local government;
  2.  by referendum, to adopt, alter or repeal their forms of government provided by law;
  3.  in the case of municipalities, to provide by referendum for their officers, manner of selection and terms of office;
  4.  in the case of counties, to provide for their officers, manner of selection and terms of office as provided in Section 4 of this Article;
  5.  to incur debt except as limited by law and except that debt payable from ad valorem property tax receipts shall mature within 40 years from the time it is incurred; and
  6. to levy or impose additional taxes upon areas within their boundaries in the manner provided by law for the provision of special services to those areas and for the payment of debt incurred in order to provide those special services.

These are the only powers a non-home rule municipality in Illinois may have – so the City of Oakland had to try and find another statute that enabled them to ban hemp farming throughout its city limits.  We will get to that soon, but we note that the City of Oakland then argued that the statutory authority did not matter because they could ban hemp under its police powers – but non-home rule municipalities do NOT have police powers.  As you can see from the powers of the Home Rule Units under Section 6 of  Article 7 of the Illinois Constitution below.

SECTION 6. POWERS OF HOME RULE UNITS

(a) A County which has a chief executive officer elected by the electors of the county and any municipality which has a population of more than 25,000 are home rule units. Other municipalities may elect by referendum to become home rule units. Except as limited by this Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs including, but not limited to, the power to regulate for the protection of the public health, safety, morals and welfare; to license; to tax; and to incur debt.

We put the police powers in bold.

What are Police Powers in Illinois?

They are: the power to regulate for the protection of the public health, safety, morals and welfare; to license; to tax; and to incur debt.

Urban Agricultural Areas in Illinois

The City of Oakland went to the Illinois Municipal Code and found a restriction against urban agricultural areas that a city can regulate if it bears a direct relationship with the public health, safety or welfare.

The only problem was – this law did not exist until 2019 and Oakland had no urban agricultural area. The City of Oakland tried to find any method they could to ban the hemp farming inside its city limits.  The City argued that its zoning laws from 1968 qualified as an urban agricultural area.  This is not how law works, as statutes do not operate retroactively.

Division 15.4 of the Illinois Municipal Code, titled Municipal Urban Agricultural Areas

The cited statute, 65 ILCS 5/11.4-30(a,) provides in full:

(a) A municipality may not exercise any of its powers to enact ordinances within an urban agricultural area in a manner that would unreasonably restrict or regulate farming practices in contravention of the purposes of this Act unless the restrictions or regulations bear a direct relationship to public health or safety. (Emphasis Added).

The City of Oakland skipped over all the regulatory hurdles to get to its objective of banning hemp.  Illinois amended the Illinois Municipal Code in 2019 to provide for urban agriculture and provided protections and procedures for farmers to establish an “urban agricultural area.” We must review Article 11, Division 15.4 of the Code regarding Municipal Urban Agricultural Areas. The City looked straight past the controlling provisions of the Code in search of its desired ends – banning hemp farming in its City limits. The City skipped right over numerous Sections of the Code that requires prior to adopting an ordinance designating an urban agricultural area, the municipality must:

  1.  receive an application for establishing an urban agricultural area [65 ILCS 5/11-15.4-15(a)]; 
  2. establish an urban agricultural area committee after receiving an application to so establish one [65 ILCS 5/11-15.4-10(a); 
  3. elect a chair for that committee [65 ILCS 5/11-15.4-10(b)]; 
  4. fix a time and place for a public hearing and notify each taxing unit of local government [65 ILCS 5/11-15.4-20]; 
  5. publish notice of this hearing in a newspaper of general circulation for days before such hearing [65 ILCS 5/11-15.4-20]; and 
  6. hold the public hearing; allow any interested person – like the Plaintiffs in this case – to appear and voice objections and comments with respect to the hearing [65 ILCS 5/11-15.4-20].
  7. Only after such public hearing, and in compliance with the procedures as provided in the Code, may the municipality adopt an ordinance establishing and designating an urban agricultural area [65 ILCS 5/11-15.4-20].

The City of Oakland did none of these things in banning hemp farming from its City limits. Instead, it just said that it did, which the court pointed out that it clearly did not and had no ‘urban agricultural area’ to regulate. Therefore, the City’s ban on hemp failed under judicial review.  The City of Oakland may try to appeal the decision, but that won’t fix the problems with its hemp ban. 

Illinois hemp bans may not be possible in home rule municipalities either because of the State’s comprehensive hemp licensing program, but that issue remains for another day.  

Thomas Howard

Thomas Howard

Cannabis Lawyer

Whether this is your first land use issue or most recent, our office has helped people and businesses alike.

Thomas Howard was on the ball and got things done. Easy to work with, communicates very well, and I would recommend him anytime.
R. Martindale

Need A Business Lawyer?

Call our law offices with your legal questions for help on:

  1. real estate contracts
  2. business contract disputes
  3. Shareholder litigation
  4. cannabis business
  5. fraud actions
  6. mechanic's liens

 

    REACH US BY EMAIL


    Illinois Hemp Lawyer

    Illinois Hemp Lawyer

    Illinois Hemp Lawyer

    Final Illinois Hemp Rules Released

     

    Our Illinois Hemp Lawyers have written extensively on the first new agricultural commodity of the 21st century – hemp – over on our sister website focusing on our cannabis law practice – www.CannabisIndustryLawyer.com.

    Illinois hemp Lawyer

    Illinois hemp application bot

    Illinois Hemp Farmers & Processors Need a Business Lawyer

    For answers on the confusing term “agent”  discussed below – you can find the 2nd Notice Filing and Responses to Public Comments – Linked Here. 

    Call Cannabis Attorney Thomas Howard at (309) 740-4033.

    Want to Get a Hemp License

    24/7 we answer the phone – and follow up quickly

    Thomas Howard

    Thomas Howard

    Peoria Hemp Lawyer

    Whether you’re growing and processing your first crop of hemp, or your 4th, we can help you in Illinois.

    Welcome to the Collateral Base – Attorneys for Business & Cannabis, with litigation experience in secured transactions and commercial banking litigation in all over Illinois, with offices in Chicago and Peoria.

    Counties: Peoria, Cook, McLean, Woodford, Tazewell, Knox, Henry, Rock Island, Fulton, LaSalle, Bureau, Mason, Logan, Sangamon, Macon, Woodford.

    Cities: Peoria, Chicago, Pekin, Morton, Eureka, Bloomington-Normal, Springfield, Rock Island, Princeton, Ottawa, Lewistown, Galesburg, Monmouth.

    Final Illinois Hemp Rules Released

    Approximately one month after the public comment period ended for the first draft of the Illinois Hemp Regulations, the State has released its final version.

    Now you can read them yourself

    – Hemp Rules Link

    We are going to discuss the new rules, which could be the final rules.  Currently, the State calls them the Industrial Hemp Rules With Second Notice Edits.

    For more about the procedure of releasing regulations, or rules, after a law is passed – watch the video above.

    Illinois Hemp Application Rules

    In Illinois, two main hemp applications are covered by the rules – the cultivators’ license, and the processors registration.

    The first draft of the rules required any person that either grew (cultivated) or manufactured (processed) hemp needed a license.

    However, the first draft of the Rules did not make it clear if each and every employee of the company growing or processing hemp required a separate license.

    Think if each and every employee at the local bar required a liquor license – how much more expensive would your drink order become?!

    But, unlike your drink order, CBD rich hemp cannot make you intoxicated.  So when reading the newly revised rules.  We caught the attention of a few new terms and what they may mean.

    New Changes to Hemp Rules

    The newly added terms in the Hemp rules are in red line – and one of them is the new term of art – an “agent.”

    An “Agent” is :

    “Agent” means any family member, employee, contracted employee, or farmhand of a licensed or registered hemp cultivator or processor.

    This is a new term under the rules.  We did not use the red-line version right here, but if you look at the rules link – you will see it in red. This new “Agent” term creates a very burdensome and expensive reading of the rules.  Let’s explain.

    Section 1200.20 General Provisions

    The general provsions of Illinois Hemp’s regulations provides that:

    No person shall cultivate (or process) industrial hemp in the State without first receiving an Industrial Hemp Cultivation License (or registration to process) from the Department.

    The next questions is, okay, if each person requires a license or registration to either grow or process hemp in Illinois, then how is “Person” defined under the regulations.

    A “Person” defined under Hemp Regulations in Illinois.

    You can find the answer in the definitions section – a “Person” is defined as:

    “Person” means any individual, partnership, firm, corporation, company, society, association, the State or any department, agency, or subdivision thereof, or any other entity, or the agent thereof.

    Does each Employee Require a Hemp License or Registration?

    Illinois hemp rules second draft

    WTF does that mean?

    Because each “person” that handles or grows hemp requires a license or registration to do so in Illinois, and the definition of the term “person” includes the newly defined term “Agent,” then we have a legal conclusion confronting us.

    Does each employee – or even family member – count as an agent, which is a person – who all require a license or registration to either grow or process hemp?

    Agent should me one license (or registration) per business location.  If you read the comments to why they added the term “agent” it was to help address the issue of licensing all employees and provide clarity – but as you see it does not happen by only reading the rules, you also have to read the commentary on the rules to get the intent of the agency.

    How to Start Your Illinois Hemp Application

    The vast majority of the information required to complete your business’ Illinois hemp license application is available online. 

    We wait for Illinois to produce their official form of application to be able to help our clients make sure their application is correct.

    We are also in close contact with the State of Illinois regarding the scope of the licenses and registrations to see if the newly introduced terms may come onto the scene.  For now it appears that Illinois will be starting to take hemp applications very soon.

    So call now to start your Hemp application – right now.

     

    Want to Get a Hemp License?

    We are helping businesses like yours get into the fast growing Illinois Hemp market.

    Thomas Howard was on the ball and got things done. Easy to work with, communicates very well, and I would recommend him anytime.

    R. Martindale

    Need A Business Lawyer?

    Call our law offices with your legal questions for help on:

    1. real estate contracts
    2. business contract disputes
    3. Shareholder litigation
    4. cannabis business
    5. fraud actions
    6. mechanic's liens

     

      REACH US BY EMAIL