Title
title
An Ordinance Amending Articles 8-2,8-42 and 23A-12 of the Oak Park Village Code Regarding Regulations on Sales of Intoxicating Hemp and Kratom and Licensing and Taxation of Retail Sales of Kratom
..end
Introduction
overview
This Ordinance imposes a tax of $1.31 per unit on each kratom product sold and increases the business license fee to $300 for those businesses that sell kratom, as well as updates the Village Code to recognize upcoming changes in state law in November regarding unregulated intoxicating hemp.
end
body
Recommended Action
Prior to this agenda item, the Village Board will have a discussion regarding this draft Ordinance. The Village Board could decide to only update the Village Code to reflect the upcoming changes to state law, or the Village Board could also implement a tax and license fee on establishments that sell kratom, which was not impacted by upcoming changes to state law, therefore allowing the Village Board to impose a tax and license fee.
Prior Board Action
The Board has taken the following prior action(s):
• Passed ORD 25-137 on March 18, 2025, which prohibited the sale of intoxicating hemp and kratom products to underage persons
Background
On March 18, 2025, the Village Board adopted an ordinance amending Chapter 8 (“Business Licensing”) of the Oak Park Village Code, adding the following regulations related to intoxicating hemp:
• Prohibits the sale of intoxicating hemp and kratom products to persons under the age of 21 years old
• Such products must be displayed within the establishment from behind a sales or service counter so the customer cannot access it without assistance from an employee
• Such products cannot be packaged or labeled with images designed or likely to appeal to children
• Such products cannot be packaged or labeled in a way that imitates a commercially available candy or snack food
• Establishments selling intoxicating hemp products must post the following sign:
THE SALE OF INTOXICATING HEMP TO PERSONS UNDER TWENTY-ONE YEARS OF AGE IS PROHIBITED BY LAW
After adoption of the Ordinance, the Village Board further directed staff to research the following for future Board action:
• A business license fee to cover the cost of enforcement
• A tax on the sale of intoxicating hemp products
• Required signage explaining potential health effects
• Educational campaign materials about intoxicating hemp
• Review of regulation for infused intoxicating hemp products, such as those sold in bakeries
Federal Update
The United States experienced the longest government shutdown, lasting 43 days from October 1, 2025, to November 12, 2025. To reopen, Congress passed and the President signed into law a series of bills, including the Fiscal Year 2026 Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Bill. This Bill closes the intoxicating hemp “loophole” which was created by the 2018 Farm Bill, which allowed products infused with cannabis-like levels of THC that came from intoxicating hemp to be manufactured and sold.
The Bill significantly narrowed the definition of industrial hemp products to exclude plants that have any “quantifiable amounts” of THC. Further, the Bill reclassifies as a Schedule I controlled substance any hemp-derived products that contain:
1. All cannabinoids not capable of being naturally produced;
2. Any cannabinoids capable of being naturally produced but synthesized or manufactured outside of the plant; or
3. Any “quantifiable” amounts of THC, THCA, or other cannabinoids that have similar effects as THC on humans or animals.
As a result of this change in federal law, effective November 12, 2026 (365 days after the passage of the Bill), many of the unregulated intoxicating hemp products will be banned under federal law.
State of Illinois Update
On June 12, 2026, Governor JB Pritzker signed SB 3222, which establishes the Illinois Hemp Act. This Act aligns state law with the new federal changes, effectively closing the intoxicating hemp loophole in Illinois and reclassifying intoxicating hemp as regulated cannabis. This new State law did not change the legal status of kratom, however.
SB 3222 immediately bans the sale of intoxicating hemp products to individuals under the age of 21. Additionally, beginning November 12, 2026, all intoxicating hemp products will be reclassified as cannabis and will be subject to regulations outlined in the Cannabis Regulation and Tax Act, which governs the current adult-use cannabis market. Notable components include:
• All products must use safe ingredients, undergo rigorous testing, and carry detailed labels
• Packaging must be child-resistant and cannot target minors, mimic children’s products, or make health claims
• Any product containing 0.4 mg total THC or greater may only be sold at State-licensed dispensaries
Local Impact
As a result of intoxicating hemp products being reclassified as State-regulated cannabis, the Village may not enact a local tax targeted at intoxicating hemp. Instead, these products will be taxed in the same manner as regulated cannabis. Additionally, aside from the general business license, the Village may not require an additional license fee.
kratom License Fee
A license fee may be imposed on businesses that sell kratom products. However, the fee must be within approximately ten times the Village’s costs of administration and enforcement. For example, if the Village’s per-license cost for administration and enforcement of the license (inspections, administrative work, etc.) amounted to $300, the license fee cannot exceed $3,000.
kratom Tax
State law precludes the Village from imposing a targeted sales tax on kratom products. Staff has discussed options for a Village-imposed tax:
1. Per Unit. Products could be taxed on a per unit basis. Example: The Village could collect an amount for each package sold of kratom sold at retail.
2. Potency. Products could be taxed based on potency. Example: The Village could collect an amount for every 10 mg of kratom in a package, per the amount indicated on the package label.
Since kratom products are not regulated, it has been found that what is listed on the package is not always represented truthfully. For this reason, staff recommends imposing a per-unit tax on kratom products. This would be a similar structure to how the City of Chicago has modeled its water bottle tax.
Timing Considerations
SB 3222, which reclassifies intoxicating hemp products as cannabis, begins on November 12, 2026. Local ordinance should be amended by this date to be in alignment with SB 3222.
Financial Impact
There is no budget impact associated with this item aside from internal staff time for the additional license fee and tax. The City of Chicago proposed a similar ordinance with a tax on intoxicating hemp and kratom products at a rate of $1.31 per product unit. The Village Board can apply the same tax rate specific only to kratom products. Regarding the additional business license fee, a kratom dispensing establishment can follow the license fee schedule of tobacco sales, which is $300.
The local demand for kratom products is currently unknown; however, the overall demand for kratom is believed to be significantly less compared to cannabis and intoxicating hemp. At this time, there is no estimated revenue this tax would generate due to the unknown local demand.
Operations Impact
The Finance Department would need to collect the tax. Given that it is unknown at this time the demand for this product, nor has the Village been able to identify if it is sold in Oak Park, staff at this time cannot provide the number of operational hours it would take to monitor and collect this tax, except an estimation that if the product is sold in Oak Park it is far less than intoxicating hemp. Development Services would spend some transition hours to update the new licensing fee for these businesses that sell these products.
DEI Impact
The addition of an additional licensing fee and tax on kratom products may create a hardship for small business owners. The demand for kratom products is currently unknown; however, it is believed to be low compared to cannabis and intoxicating hemp.
Community Input
There has been no community input given in relation to this item. The Board of Health primarily focused on intoxicating hemp such as Delta 8.
Staff Recommendation
Staff recommends 1) amending the ordinance to remove mention of intoxicating hemp and 2) creating a tax and licensing fee for kratom, similar to Board direction on intoxicating hemp.
Advantages:
• Aligns local ordinance with State regulations outlined in SB 3222 regarding intoxicating hemp products
• This aligns with prior Village Board direction on taxing intoxicating hemp products
Disadvantages:
• There are no disadvantages except that the use and volume are widely unknown to determine actual impact
Alternatives
Alternative 1:
The Village Board can delay action and seek additional information.
Advantages:
• While it is unknown how many kratom products are sold in Oak Park, it is believed to be minimal. Staff can gather additional information on the volume of kratom sold in Oak Park.
Disadvantages:
• The Village Code will ultimately be required to align with SB 3222.
Alternate 2:
The Village Board could ban kratom products entirely.
Advantages
• Kratom products are unregulated and known to interact with opioid receptors in the brain, with users experiencing different effects based on the dose
• Oak Park would join over 25 jurisdictions in Illinois that have opted to ban kratom products (24 municipalities, 2 counties)
Disadvantages
• Some research on kratom products shows that people may use them for pain management even if they are unregulated.
Anticipated Future Actions
A proposed ordinance is being brought to the Village Board’s consideration during this meeting.
Prepared By: Greg Olsen, Public Health Director
Reviewed By: Lisa Shelley, Deputy Village Manager
Approved By: Kevin J. Jackson, Village Manager
Attachment(s):
1. Draft Ordinance