Lincoln aldermen labor over establishing fees and fines related to recreational marijuana

 

[December 12, 2019] 

This week discussion of recreational marijuana continued in the chambers of the Lincoln City Hall. The city council had already set ordinances allowing for resale and grower businesses within the city limits. The current discussion centered on setting rules and stipulations for legal sales.

On Monday, December 2nd the council voted that on-site consumption of cannabis would not be permitted within the city of Lincoln. Because this is a rule that store owners will have to abide by, the next step in the process is to establish a fine for violations. Aldermen spent quite a bit of time discussing how to approach this rule as well as discussing the business license fees for the retail cannabis stores.

The discussion began by talking about possession rules. City Attorney John Hoblit reviewed what is legal according to state guidelines for Illinois residents and said that the rules are different for non-residents.

He shared that beginning January 1, 2020, if obtained legally an individual may have in his/her possession 30 buds of marijuana flower, five grams of processed marijuana or 500 milligrams of THC. It was noted later that possession in a vehicle includes the product being in a sealed child-proof container. If the container is open inside the vehicle, then that would be a violation subject to fine and/or arrest.

Hoblit said that while reviewing the laws and working to establish a document for aldermen to review, another issue had arisen with the terminology related to possession in one’s “own home.” The question arises what is “the privacy of one’s own home?” Hoblit said that for example if someone is smoking cannabis in their front yard where everyone can see, then that is not being done in private even though it is being done on private property. He went on to say that on the other side, if the consumption is taking place in the back yard of a home that has a fence, then there is a reasonable expectation of privacy for the homeowner, and that should be alright.

Hoblit also noted that none of these allowable locations apply to those living in federally assured housing such as the housing authority in Lincoln. He said that because recreational use is not legal on a federal level, and the federal housing is supported by federal dollars, those properties would be exempt from local or state laws.

Regarding possession and illegal transportation, Hoblit also shared that the current fines are $250 for possession up to 10 grams and $750 for possession from 10 to 30 grams. There is also a Class A misdemeanor charge for criminal transport of cannabis. The arresting police officer will be responsible for making a decision if the violation is that of a city ordinance or should the suspect be charged for the misdemeanor.

Ron Keller said that looking at state rule 10.35 pertaining to cannabis the word public is defined as a location where usage can be “observed by others.”

Keller also noted that he had a few concerns about ‘one’s own home.’ He said for example, one person in the household might not be permitted to smoke cannabis inside the home. That person might have to go outside to a shed or shelter to consume marijuana, so that was not technically one’s own home. Hoblit said that was a good point and the wording for the city documents could be revised to say one’s own property.

Another question came from both Keller and City Administrator Beth Kavelman. What would be the rule for a guest in the home where cannabis is regularly consumed anyway? Could that guest also consume though not in his or her own home.

It was mentioned that the fines for possession could be strengthened, but police Chief Paul Adams said he wasn’t sure the city should do that. He said the city fines are already higher than the state and the big issue is just because a fine is imposed does not mean the violator is going to pay it. He said there are a lot of fines on the books that have not been paid. Those fines have been turned over to collection agencies but collection is not all that effective.

Steve Parrot said he would be interested in knowing what 30 grams of processed cannabis costs. He said if someone can afford hundreds of dollars for the drug, then they can afford the fine. Kevin Bateman said he agreed with Parrott, but Jeff Hoinacki reminded the council that Adams had just said the fines are not being paid. The comments prompted Tracy Welch to ask if the city should actually be considering fines based on the violators ability to pay.

Parrott asked if there could be some kind of purchase control at the point of sale, if a customer has unpaid fines perhaps the retailer could then refuse to sell product to the person. Hoblit said the city didn’t have the authority to do something like that.

Bateman had suggested earlier in the evening that the Adams and Hoblit work together to draft the ordinance and fine amounts. At the end of the discussion he made the same suggestion that something be drafted and brought to the council for vote on December 16th.

Establishing retail fees and fines

Kevin Bateman opened this discussion saying that the licensing fee for alcohol establishments with gambling is $2,500 per year. Bateman suggested that the cannabis license be double that amount at $5,000 for the first year only then $3,500 for license renewals.

Bateman said that for illegal sales (to underage persons or selling more than the allowable quantities), he would suggest that the fine be $3,500 for the first offense, $7,500 for the second offense, and if a third offense occurs the license be pulled and that retailer never be allowed another license in Lincoln.

Jeff Hoinacki asked if there would be a time period for the violations. Bateman said no, it would be life of the license, regardless of if it were three violations in one year or in five years.

Parrott said he would like for the fine to have more bite and suggested the second offense be $10,000.

Ron Keller wanted to know why the cannabis license should be so much higher than liquor. Bateman said that the cannabis was going to be a lucrative business in Lincoln and the license fee is reasonable.

The discussion that ensued centered on the thought that the city is picking on the cannabis dealers and making them pay more because of what they are selling. Parrott said that he was okay with that, particularly in the area of fines because these dealers are “messing with people’s lives.” He said he did not want them to believe they could violate the laws and get by with a “hand slap.”

Bateman also said that in his research of states that are establishing rules, the cannabis fines tend to be higher than fines for alcohol.

Sam Downs said that he was concerned about the “three strikes and you’re out” rule coupled with “for the life of the business.” He said that was excessive. He added that those kind of restrictions are not placed on businesses selling alcohol or tobacco.

City treasurer Chuck Conzo said he would like to see fines high, but he also agreed with Downs that having an ‘open end’ on violations is not right. His suggestion was three violations in three years. He said the three-year clock could start at the date of the offense and reset for three years from the date of the last offense.

Welch said that once again if felt like the dollar amounts were being set based on ability to pay and he said that was not done for liquor. Conzo said that was a different product and a different situation. However, Welch said the fact is, alcohol is everywhere in the city. He said the city police do stings and find violators. He asked Adams how many times the stings produce violations. Adams said quite often. Welch went on to ask, “What does this say to people coming to (Lincoln) to open a new business?”

Conzo however said this was not the same. There will only be one retail cannabis store so there won’t be others coming to town. Welch said, not at the moment, but the state could change their minds about the number of retailers. Then there would be a possibility that more would want to come to Lincoln.

Hoblit said that the city should be aware, this is not a decision they have to make before the end of the year. While some decisions did have to be made before January 1st such as whether or not to permit at all, this one could wait. He said that the state is going to be very stringent in their fines and fees because this is a new venture and no one knows what to expect. He said that down the road, the state may relax the rules, and yes there could be more room for competition.

Hoblit said that the city should be aware of this, and could set rules now that later on might be changed or amended to fit the needs of the city and the retailers.

The topic eventually moved on to in-store consumption. Again this is not a black and white area for the council or the retailers. The city has said there shall be no in-store consumption, but the question posed asked how a retailer to deal with the person who consumes a product as he or she is leaving the store. The business owner or store clerk should not be expected to try and stop that person.

Adams said that those cases would have to be determined by the arresting officer. The police would need to determine if the customer was given permission to consume or did he or she just do it.

Bateman said his initial thought was that the no in-store consumption rule would apply to sampling. Customers will not be permitted to come in and ‘try’ a product before they purchase it.

Hoblit said that for the store owner or employee there is an easy fix for this – self reporting. If a store clerk witnesses on site consumption he or she could report it to the police and that would relive the business of the liability for that customer.

Hoblit also suggested that the city should review how it approaches smoking violations for consumption in businesses, and perhaps use that as a model.

For the second half of the cannabis discussion on Tuesday evening, there was nothing placed on the next voting agenda. There is still work to do on this topic including more research by Hoblit and drafting the appropriate documents for approval.

For the voting session on December 16th, aldermen will have one action item pertaining to license fees for retail establishments selling recreational cannabis. As always the council can table the item if they feel they are not prepared to take a vote.

[Nila Smith]