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Illinois Cannabis Laws and Property Ownership

Chicago Business Lawyer

Illinois Cannabis Laws create new issues for Property Owners

Cannabis may be legal in Illinois after January 1, but it is still illegal under federal laws.  This will make for some interesting discrepancies in how the laws will be applied.  Federal law remains in direct conflict with the new Illinois state law.  There are a number of issues that property owners should be concerned with on January 1.

Federal Subsidized Housing:  In federal subsidized housing – like the Housing Authority of Cook County – medical or recreational use of marijuana has been and remains prohibited in the Housing Authority’s housing programs. This includes participants using Housing Choice (“Section 8”) Vouchers in the private rental market,
tenants in properties using project-based vouchers, HACC family sites and HACC-owned or managed low-income public housing.

There are a number of other issues that property owners must deal with.

Residential Leases:  In multi-family residential properties, landlords will have to review the leases so as not to violate the new laws.  The mere presence of cannabis on the property can no longer form the basis for terminating a lease.  But there are limits on what can be home grown and the amount of cannabis one is legally permitted to own.

Commercial Leases:  Landlords should look into what will be required for their insurance coverage.   Any workplace can establish a zero-tolerance policy for the use of cannabis in the workplace.   For this reason, Landlords should consider adding provisions to their leases that mandates this policy in the tenant’s business.   And if you are leasing to a legal cannabis dispensary, there are a host of other issues that should be discuss with your lawyers.

Condominiums:   Boards and property managers will have to contend with the issues of second hand smoke.   This is addressed in the Act which amends the Illinois Condominium Property Act (“ILCPA”) to include a provision regarding the use of cannabis:

Sec. 33. Limitations on the use of smoking cannabis. The condominium instruments of an association may prohibit or limit the smoking of cannabis, as the term “smoking” is defined in the Cannabis Regulation and Tax Act, within a unit owner’s unit. The condominium instruments and rules and regulations shall not otherwise restrict the consumption of cannabis by any other method within a unit owner’s unit, or the limited common elements, but may restrict any form of consumption on the common elements.

Condo Boards can ban the use of cannabis like they can smoking of tobacco products but should not have a right to ban the use of cannabis in non-smoking products like Gummy Bears.

There are lots of issues that will be arising as the new laws take effect on January 1.   So, let’s be careful out there!