A key Connecticut legislative committee heard testimony on Monday about a bill that would dictate how tax revenue from marijuana sales would be allocated if the state legalizes cannabis for adult use.
SB 1138 wouldn’t legalize marijuana itself; rather, it’s part of a three-bill cannabis reform package that’s working through the legislature, with the goal of later combining the legislation into a single proposal for floor action. For now, each piece of legislation is being considered in committees that have jurisdiction over the areas touched on by the individual bills.
A proposal to legalize cannabis for adult use, which would also expunge the records of those with prior marijuana possession convictions, was approved by the Senate Judiciary Committee earlier this month. Another part of the legalization package was approved by the legislature’s General Law Committee last month.
The separate legislation taken up by the Finance, Revenue and Bonding Committee on Monday would impose a 6.35 percent tax on retail marijuana sales. A three percent local tax could be imposed in jurisdictions that allow cannabis businesses to operate. And there would also be a $35 per ounce tax on marijuana transfers from growers.
Tax revenue (except from the local tax) would be specifically designated for community reinvestments in areas that are socioeconomically disadvantaged. Each “distressed community” would have a non-profit community development corporation that would be responsible for providing certain programs and services meant to support residents.
Those services include free or low-cost early childhood education, vocational programs, restoring public spaces like playgrounds or libraries, supporting home ownership through home buyer education and expanding community centers.
“SB 1138 is a groundbreaking approach to community reinvestment,” Jason Ortiz, executive director of the advocacy group CURE CT, told Marijuana Moment. “By ensuring the funds go directly to community-based organizations, we can create real opportunity to address our needs and with our own hands.”
The bill would also establish an oversight council responsible for identifying communities that are eligible under the reinvestment provisions and ensuring that the community development corporations are properly funded and using that money to support the legislation’s core goals.
Finally, the bill calls for some tax revenue to be used to support literacy education, funding the state’s reading instruction program and statewide early reading initiatives.
Monday’s hearing featured testimony from several witnesses, including Matt Simon, New England political director for the Marijuana Policy Project, and members of the anti-legalization group Smart Approaches to Marijuana.
“The goal of regulating and taxing cannabis is not merely to produce tax revenue. Far from it,” Simon said at the hearing. “Instead this issue presents an opportunity to scrap a policy that has failed the people of Connecticut and replace it with a system that will divert hundreds of millions of dollars each year out of this illicit market and into a thoughtfully regulated market, where cannabis is sold by law abiding businesses that create jobs, pay taxes and follow rules and regulations that have been put into place to protect public health and safety.”
“Regulating and taxing cannabis sales will generate significant new revenue for our state and local governments,” said Kebra Smith-Bolden, codirector of the Connecticut Coalition to Regulate Marijuana, said in a press release.
“Under the proposed plan, virtually all of the funds will be directed to the communities that have been most devastated by cannabis prohibition,” she said. “For decades, minority and low-income individuals have been disproportionately affected by marijuana enforcement and the war on drugs. It is fitting that they be the ones who benefit from cannabis tax revenue following legalization.”
The panel has not yet scheduled a vote on the bill, but pending legislative deadlines mean that action would have to come soon in order for the proposal to advance.
House Speaker Joe Aresimowicz (D) supports legalization and said that lawmakers may decide on the issue in a special session if they are unable to pass legislation before the current session ends on June 5. However, he voiced concerns about the community reinvestment bill that the finance committee debated. The speaker said he’s generally opposed to earmarking revenue, arguing that doing so can put lawmakers in a bind later on.
“Things change, and we need to adjust midstream. So that’s why we’ve been opposed to earmarks,” he told The Hartford Courant. “That’s why I just don’t like earmarks because they’re really hard to live up to in a changing economy and a changing budget process.”
Elsewhere in the region, lawmakers discussed a legalization bill at a Pennsylvania Democratic House-Senate joint hearing on Monday, and a New Hampshire Senate committee debated House-passed cannabis legalization legislation last week.
This story has been updated to include additional information about testimony offered at Monday’s hearing.