Nov. 19: Illinois agrees to hold off enforcing Hemp Act against ILHAA lawsuit plaintiffs and members until federal TRO hearing

Illinois has agreed to hold off enforcing its new hemp law against the businesses suing to block it, and against members of their trade association, until a federal judge hears arguments on Thursday, Nov. 19, CBS Chicago reported Monday, Nov. 9. The agreement buys some hemp sellers one extra week beyond the Illinois Hemp Act's Nov. 12 effective date, but it does not stop the law from taking effect for everyone else, and no court has ruled on whether the law should be paused.

What the state agreed to

According to CBS Chicago, the state agreed not to enforce the new law "against the businesses involved in the lawsuit and members of their industry association for an extra week, through Thursday, Nov. 19." The station reported that Nov. 19 is when a federal judge is scheduled to hear arguments over whether to temporarily block the law while the case moves forward.

Muddy River News, a Quincy-based outlet, reported the same development Monday afternoon, quoting Craig Katz of the Illinois Healthy Alternatives Association (ILHAA). "The state, through the attorney general, has agreed not to perform the hemp ban for any of the plaintiffs in the case," Katz told the outlet. "So that's about 250 members." Muddy River News also reported that there has been no decision yet on the temporary restraining order (TRO) request.

The arrangement, as reported, is an agreement by the state rather than a court order. Hemp Law Watch did not locate a written order or stipulation on the public docket for this report, so the exact terms, including how membership is defined, are described here only as the two outlets reported them.

The lawsuit behind the pause

The case is Illinois Healthy Alternatives Association et al. v. Raoul et al., No. 1:26-cv-13799, in the U.S. District Court for the Northern District of Illinois. ILHAA and five businesses filed a complaint and an emergency motion for a temporary restraining order and preliminary injunction on Nov. 5, naming Attorney General Kwame Raoul and the heads of the Illinois Department of Agriculture, the Department of Financial and Professional Regulation, the Illinois State Police, the Department of Revenue and the Department of Public Health as defendants.

The business plaintiffs named in the motion are MNG 2005, Inc.; Green Street 79 LLC; Life Element, LLC; OPT Holdings Technologies LLC; and Zada Ventures LLC, doing business as Cubbington's Cabinet. They are represented by Michael Rothstein and Nate Goodman of Tabet DiVito & Rothstein.

The motion asks the court to stop the state from implementing the Hemp Act's redefinition of hemp, which reclassifies many hemp-derived products as "cannabis" under the Cannabis Regulation and Tax Act, and its 0.4 milligram total-THC-per-container limit. It also asks the court to bar the state from prohibiting out-of-state companies from selling federally legal hemp products into Illinois and from requiring hemp businesses to obtain cannabis licenses. The plaintiffs' central argument is that the law violates the U.S. Constitution's Commerce Clause.

ILHAA describes itself as a nonprofit trade association representing 250 companies in Illinois's low-potency hemp industry that employ more than 5,000 people. In its announcement of the lawsuit, the group said the industry is a half-billion-dollar business that generates more than $30 million in revenue for the state. Those are the association's own figures, not findings by a court or state agency.

What happens next in court

Muddy River News reported that the plaintiffs have a briefing scheduled for Nov. 10 and that the state must respond the following day, ahead of the hearing. CBS Chicago reported the hearing date as Thursday, Nov. 19. Until the judge rules, the law's status for businesses outside the agreement is unchanged.

Katz urged caution in his interview with Muddy River News. "I tend to preach conservatism, because this is still the subject of litigation," he said, while acknowledging that business owners need to make their own decisions. "Practically speaking, I don't know if they (state authorities) are ready to enforce it and if they have an appetite to enforce it. Theoretically, they can," he said. Katz also told the outlet that many stores have been holding blowout sales or pulling products from their shelves.

What the law does on Nov. 12

Under the Illinois Hemp Act, any consumable or topical product with more than 0.4 milligrams of total THC per container will no longer meet the state's definition of hemp beginning Nov. 12. The Illinois Department of Revenue's Informational Bulletin FY 2027-04 says those products may then be sold to consumers only by cannabis dispensaries licensed by the Illinois Department of Financial and Professional Regulation.

WBEZ, summarizing Chicago Sun-Times reporting on Nov. 9, said hemp-derived THC products over the 0.4 milligram threshold will have to be sold only at state-licensed dispensaries and taxed the same as cannabis products. In Chicago, cannabis excise taxes run from 22% to 37% depending on potency, according to Illinois Department of Revenue figures cited in that report.

How businesses are reacting

CBS Chicago spoke with Stephen Bossu, owner of Hopewell Brewing in Logan Square, who said THC drinks account for 10% to 20% of the brewery's overall revenue depending on the season. The lowest-dose product Hopewell sells contains 3 milligrams, the station reported, well above the 0.4 milligram limit. Bossu said losing those sales could mean difficult decisions, including potential layoffs. "We're a small business, right? We can't absorb hits all the time," he said.

Glenn McElfresh of the Hemp Beverage Alliance, who is also CEO of Chicago-based Plift, told CBS Chicago the state should focus on sensible regulation instead of pushing the products out of traditional retail. He said the law could force smaller brands to put expansion plans on hold and move sales into dispensaries.

The station also noted that supporters of the restrictions say stronger oversight is needed to protect consumers, especially kids.

According to the Sun-Times reporting summarized by WBEZ, Hopewell is offering 50% off its Choom THC drinks at its Logan Square headquarters. Spokespersons for the United Center and the Salt Shed, the first major U.S. arenas and music venues to carry THC-infused drinks, said they will comply with the new rules. Revolution Brewing owner Josh Deth said he hopes for a resolution allowing distribution through licensed liquor establishments, and Humboldt Park-based Perfectly Dosed, which supplies THC emulsion ingredients to about 50 Illinois beverage brands, breweries and restaurants, said it could move some warehousing and fulfillment out of state if the restrictions are prolonged. The company plans to apply for the new hemp product manufacturing license administered by the Illinois Department of Agriculture.

The federal backdrop

The Illinois fight is unfolding a month ahead of a federal change. A new federal definition of hemp, including a 0.4 milligram total-THC-per-container cap on finished products, is scheduled to take effect Dec. 11. Block Club Chicago has noted that pending federal legislation would push that deadline to 2028, though no such delay has been enacted. The plaintiffs argue that Illinois moving first, on Nov. 12, shuts out products that remain federally legal until at least Dec. 11.

Hemp Law Watch will update this story after the Nov. 19 hearing or if the court rules earlier.