UPDATE: A city official initially said public consumption of cannabis anywhere in the city would be prohibited. However, later Tuesday, a spokeswoman said public consumption at some businesses will be allowed.

Chicago would declare the sale of legal weed off limits in the Central Business District under rigid zoning rules proposed by Mayor Lori Lightfoot that a downtown alderman hopes to relax.

Samir Mayekar, deputy mayor for economic and neighborhood development, said that an “exclusion zone” is justified “given the high density of business and tourists” in the Central Business District.

But Ald. Brendan Reilly (42nd) argued that a city struggling to close an $838 million budget gap can’t afford to declare its Central Business District off-limits.

“In order for this to be a successful revenue play for the city, we need to have some dispensaries located downtown,” Reilly said.

“I don’t think we should have a proliferation of these licenses in the central core. But, I’d like to at least have the conversation ... about, perhaps, a limited number. A couple close to ... where the bulk of our commuters work and our visitors and tourists spend their time and money.”

The so-called “exclusion zone” would stretch from Oak Street to Ida B. Wells Drive and from Lake Michigan to LaSalle Street in River North and to the Chicago River in the Loop.

“It’s about density and the high density of tourists especially and the concerns we’ve heard from certain aspects of the business community and the public safety community,” Mayekar said.

Besides being prohibited in the Central Business District, recreational marijuana also could not be sold within 500 feet of schools, within 1,500 feet of other dispensaries and in residential districts and buildings.

Recreational marijuana use within the city limits would be banned entirely by anyone under the age of 21. Beginning Jan. 1, Chicago’s licensed medical dispensaries would be permitted to sell weed for recreational use, but only to customers 21 and older.

Rules for public consumption businesses being developed

Even when recreational weed becomes legal Jan. 1, smoking in outdoor public places won’t be allowed anywhere in the state. But the law does say cities can allow public consumption in lounges or businesses.

Initially Tuesday, Mayekar said consumption in all public places would be prohibited. However, later the city said it intends to issue some consumption licenses for lounges or businesses where cannabis use would be permitted.

Details of how those public consumption licenses would be awarded were not immediately released.

“The regulations around on-site consumption have not yet been finalized,” said Lauren Huffman, a city spokeswoman. “We are taking the initial step of introducing zoning regulations so we can start to give businesses certainty around where dispensaries will be located. We have not yet made final decisions around where and how on site consumption will be regulated, but are having ongoing conversations with our partners in the industry, the community and the City Council around the best way to regulate the practice.”

‘Cannabis zones’

To ensure the new state law “maximizes economic opportunity” across the city, Chicago would be divided into seven “cannabis zones” outside the central core.

The number of recreational marijuana dispensaries — capped at 91 citywide under state law— would be evenly divided, with 13 dispensaries in each of seven zones with roughly the same population, Mayekar said.

“The purpose of creating zones is to ensure even distribution across the city and to prevent over-saturation in any one area,” he said.

Cannabis zoning applications will be heard by the Zoning Board of Appeals, a process intended to give area residents a say in which licenses get approved and which applications are rejected.

“Adult-use cannabis — there’s not consensus about that across our city. There are certain communities that might not support it. ... If there are communities that don’t want dispensaries in their retail corridors, there is a process for them to be heard,” Mayekar said.

“There are other communities that really do want this. They can be heard and dispensaries can open there. It’s about inclusive, equitable growth that has the community in mind.”

The zoning rules, to be introduced at Wednesday’s City Council meeting, were drafted by “cannabis professionals,” community leaders, business representatives and policy experts with an eye toward expanding “wealth and social equity for all Chicago’s residents,” City Hall said.

“We will be ensuring that legalization not only creates new revenues for our city but also unique opportunities for entrepreneurs from communities victimized by [the] War on Drugs to be at the forefront of developing equity and wealth from this emerging industry,” Lightfoot was quoted as saying in a press release.

Mayekar said he’s not at all concerned about some of the seven districts getting only a handful of applicants and others triggering a stampede of applications.

He noted that Denver has over 500 dispensaries. Los Angeles has 150 dispensaries and is planning a 50 percent expansion, he said.

“I don’t think we have that concern. But obviously, if we needed to, we will work to modify ... the legislation,” Mayekar said.

“Any time you’re standing up a new industry....you have to be flexible. Just like you saw with ride-share, the industry will evolve. The city and the regulatory framework is only as good as it can adjust to the realities on the ground.”

Pamela Althoff, a former Republican state senator who now leads the Cannabis Business Association of Illinois, was surprised to learn cannabis businesses wouldn’t be allowed in the Central Business District.

“That’s huge,” Althoff said, referring to the swath of land where pot shops could be prohibited. “I had not heard anything like that at all with the conversations going on in Chicago.”

Some cannabis firms already had scouted prospective locations in the area, including the site of the former Apple Store on the Magnificent Mile and a spot on the riverfront near Wacker Drive and Lake Street.

Those plans now appear to be up in smoke.

Contributing: Tom Schuba