2.28.2020 – S.54-Adult-Use Cannabis

It’s hard to believe that Town Meeting is already upon us. The weeks have gone quickly, and we are looking forward to visiting with folks in our towns. We are also aware that when we return to Montpelier, we will have one week to get legislation out of our policy committees in time for crossover, in order to have it considered by the Senate without a rules suspension.

This week we passed S.54, an act relating to the regulation of cannabis. The bill creates a Cannabis Control Board for the purpose of safely, equitably, and effectively implementing and administering the laws enabling access to adult-use cannabis in Vermont. The Board will develop and establish a tax and regulate system.

To be clear, adult-use cannabis is already legal in Vermont, but one has had to grow their own, obtain it on the black market, or drive to another state like Massachusetts where there are operating dispensaries. For a number of reasons, many people couldn’t grow their own and until recently when it was legalized in other states, the only access to adult-use cannabis was on the black market where quality control is non-existent. This was one of the main reasons the Legislature took the steps it did to create a tax and regulate system.

Medical marijuana, or to be exact, cannabis use for symptom relief, has been in place since 2004.

As S.54 was being considered, several standing committees in the House were asked to weigh in. While several members of the House Agriculture and Forestry Committee were completely opposed to any bill regarding the taxation and regulation of adult-use cannabis, others felt that there should be a strong relationship with the Agency of Agriculture, Food, and Markets (AAFM) and the regulation aspect of legalization. Why? Because adult-use cannabis is essentially the same plant as hemp that is raised for cannabidiol (CBD) – just different varieties with varying tetrahydrocannabinol (THC) levels.

We would have liked for the production aspect of the tax and regulate system to be housed in the AAFM. This would include cultivation, processing, nutrient management, and the enforcement of worker protection. The hemp program at AAFM is completely set up for licensing, registration, and cannabis quality control with the Information Technology infrastructure in place. Laboratory services are available as well as third-party laboratory certification. Additionally, we wanted the Secretary of AAFM to be a member of the Cannabis Control Board and we wanted to make sure that there was an opportunity for small cultivators and producers to participate. While we didn’t get everything we wanted, a lot of what we asked for was included in the final bill.

So how will this work? A seven-member Cannabis Control Board Nominating Committee, appointed by the Speaker (two members), the Senate Committee on Committees (two members), and the Governor (three members) will create a list of names that the Governor will choose from to appoint the Cannabis Control Board. The Committee will review the candidates to determine which ones are well-qualified for appointment to the Board and recommend those candidates to the Governor. When a vacancy on the Board occurs, the Governor is required to submit at least five names of potential nominees to the Cannabis Control Board Nominating Committee for review.

The job of the Cannabis Control Board will be to provide recommendations to the General Assembly on or before January 15, 2021, on the resources necessary for implementation of the act for fiscal years 2022 and 2023, including positions and funding. We will get another opportunity to weigh in at that point. The Board must consider utilization of current expertise and resources within State government and cooperation with other State departments and agencies where there may be an overlap in duties.

One provision requires the Board to consult with other State agencies and departments as necessary in the development and adoption of rules where there is shared expertise. An advisory committee will be established that is composed of members with expertise and knowledge relevant to the work of the Board. One of these members will be the Secretary of AAFM or their designee. In addition, there will be one member with expertise in laboratory science or toxicology. This will provide the opportunity for AAFM to weigh in regarding many of the issues mentioned earlier.

Also included in the bill is language regarding pesticides and worker protections, both issues that we felt merited the involvement of the AAFM. There were questions as to why security fences were needed. In the past couple of years, some of our hemp farmers have experienced the theft of hemp out of their fields. Given the additional value of adult-use cannabis, this provision is very necessary.

We were pleased that a tiered approach was included with an emphasis on small cultivators. Section 904a. of the bill states “It is the intent of the General Assembly to move as much of the illegal cannabis market as possible into the regulated market for the purposes of consumer protection and public safety. It is also the intent of the General Assembly to encourage participation in the regulated cannabis market by small, local farmers. In furtherance of these goals, the Board shall consider policies to promote small cultivators as defined in section 861 of this title. The application for small cultivator licenses shall be prioritized over larger cultivation licenses during the initial application period. In accordance with subdivision 881(a)(2)(B) of this chapter, the Board shall consider the different needs and risks of small cultivators when adopting rules and shall make exception or accommodation to such rules for cultivators of this size where appropriate.”

This mention of risks causes me to mention some additional thoughts that are cautionary in nature. After a couple of conversations with members of our Legislative Council, it is clear that farmers who would like to participate in the growing of adult-use cannabis should be careful about establishing a growing operation, regardless of the size, on their farm. Why? Cannabis is still illegal on a federal level and while nothing has happened in other states, depending on whom is in power, it could. Farmers who decide to grow adult-use cannabis should create a legal firewall between their farming and cannabis operations because, if enforced upon, they and their land would be subject to forfeiture.

The bill now moves back to the Senate where they may make additional changes, agree with what we’ve done, or ask for a Committee of Conference.