The governor of Rhode Island has again included a proposal to legalize marijuana as part of his annual budget plan—and this time he also added new language to provide for automatic cannabis expungements in the state.
Gov. Dan McKee (D) released his request for the 2023 fiscal year on Thursday, calling for adult-use legalization as lawmakers say they’re separately nearing a deal on enacting the reform. It appears that an outstanding disagreement between the governor and legislators concerning what body should regulate the program remains unresolved based on the new budget proposal, however.
In general, McKee’s plan would allow adults 21 and older to purchase and possess up to one ounce of cannabis, though it would not provide a home grow option. Adults could also store up to five ounces of marijuana in secured storage in their primary residence.
“The governor recommends creating a strictly regulated legal market for adult-use cannabis in the state,” an executive summary states. “This proposal would create a weight-based excise tax on marijuana cultivation, an additional retail excise tax of 10 percent, and also apply sales tax to cannabis transactions.”
Legislators have been in talks for months to reconcile competing legalization proposals that have been brought forward by the House, Senate and governor’s office previously. Now McKee is giving fresh details about what he hopes to see out of a potential policy change.
Under his plan, 25 percent of marijuana tax revenue and licensing fees would go to the “regulatory, public health, and public safety costs associated with adult-use cannabis.” Fifteen percent would go to local governments and 60 percent would go to the state general fund.
The executive summary says that the state’s sales tax revenue would be “boosted by the proposed introduction of adult-use cannabis tax revenue in FY 2023.” The state is estimating that it will collect $1.2 million in general revenue for the 2023 fiscal year and $16.9 “with a full year of sales in FY 2024.”
The revenue projections and provisions largely reflect what the governor proposed in his last budget request, with the exception of the new expungements language. Funding a process for expedited expungements is expected to cost the state about $400,000 for fiscal year 2023, the summary says.
“Prohibiting the possession, cultivation, and sale of cannabis to adults has proven to be an ineffective policy for the State of Rhode Island,” the findings section of the legislation itself says. “In the absence of a legal, tightly regulated market, an illicit cannabis industry has thrived, undermining the public health, safety and welfare of Rhode Islanders.”
“Regional and national shifts in cannabis policy have increased access to legal cannabis and marijuana products for Rhode Islanders in other states, the sale of which benefits the residents of the providing state while providing no funds to the State of Rhode Island to address the public health, safety and welfare externalities that come with increased access to cannabis, including marijuana.”
The effective date for the proposed bill would be April 1, 2023.
Not only does the governor’s plan not allow for home grow, it also sets out a series of fines and penalties for personal cultivation of any number of plants. For example, a person who unlawfully grows one to five plants would face a penalty of $2,000 per plant and an “order requiring forfeiture and/or destruction of said plants,” according to the text of the proposed legislation.
The bill also includes language to create a Cannabis Reinvestment Task Force that would be required to study and issue recommendations on using marijuana tax revenue for “job training, small business access to capital, affordable housing, health equity, and neighborhood and community development.”
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The proposal calls for 25 marijuana retailers to be licensed each year for the first three years of implementation. Those would be awarded on a lottery basis, but at least five would be specifically given to minority-owned businesses, a category. Additional licenses would be issued in the future based on market demand.
During negotiations over recent months, a key question that’s needed to be resolved is who should be in charge of regulating the adult-use marijuana program—an existing agency or a newly created body.
McKee has again proposed having the state Department of Business Regulation (DBR) regulate the cannabis industry.
Earlier this month, lawmakers signaled that the best route to satisfy both sides would be to create a compromise approach where a state agency like DBR and a new independent cannabis commission would each play a role. The governor did not incorporate that hybrid regulatory model into his latest proposal.
House Speaker Joseph Sherkarchi (D) recently said in opening remarks at the start of the 2022 session that lawmakers have “spent months analyzing the complex issue of marijuana legalization.”
“The House and Senate intend to soon have a draft of legislation ready, which will serve as a framework to begin a robust public hearing process,” he said. “We may not be the first state to legalize marijuana, but our goal is to do it in a way that is best for all of Rhode Islanders.”
Sen. Josh Miller (D), sponsor of one legalization proposal that was approved in the Senate last year, recently told Marijuana Moment that he agreed that lawmakers “should have a bill very soon with a structure very close to” what the speaker described. Miller’s legislation had proposed creating a new cannabis commission to oversee the market.
Senate President Dominick Ruggerio (D) said in his session opening remarks this month that the bill the body passed last year “included substantial measures to rectify the wrongs associated with the decades-long policies of prohibition.”
He noted that Senate leaders have been working in recent months with the House on a deal that “maintains the core principles of our proposal.”
“Because of those efforts,” he said, “I anticipate the General Assembly will legalize cannabis this legislative session.”
The speaker previously said that he’d be open to a compromise on regulatory structure and hinted at the possibility of a hybrid model.
Another issue related to how many marijuana business licenses also appears to have gotten closer to resolution amid negotiations. Miller’s bill proposed as many as 150 cannabis shops, whereas McKee’s plan calls for 25 each year for the first three years and then gives regulators discretion to add more depending on market demand. Rep. Scott Slater’s (D) separate legalization measure recommended just 15 retailers in his House bill. Miller said at an event in October that “we’re probably down to more in the 30, 40 range” as part of a deal.
Negotiators also recently reached an agreement to place a temporary moratorium on approving additional cannabis cultivator licenses. Some have protested adding cultivators beyond the existing medical marijuana licensees because they say there’s already a sufficient supply to meet demand in the adult-use market.
Ruggerio, for his part, said in September that lawmakers are “very close” to reaching a deal on a marijuana legalization bill
“We sent legislation—which we think is a very good piece of legislation—over to the House before we left in June,” the senator said, referring to the legalization bill that his chamber approved in June. “They are working on that legislation with some of the House people at this point in time.”
Another thing that remains to be seen is whether the negotiated legalization bill that’s ultimately produced will satisfy advocates and progressive lawmakers, some of whom have rallied behind an agenda for reform that emphasizes the need for bold social equity provisions.
While each of the competing bills contain components meant to address the harms of marijuana criminalization, the coalition led by Reclaim Rhode Island has said they’re insufficient. Advocates and supportive lawmakers have laid out specific items that they want to see incorporated such as setting aside half of cannabis business licenses for communities most impacted by prohibition.
“We can’t reverse the harm of the war on drugs, but we can start to repair it by passing automatic expungement and waiving all related fines, fees and court debt,” Rep. Karen Alzate (D), chair of the Rhode Island Legislative Black and Latino Caucus, said in September. “This bold legalization plan offers us the chance to turn a new leaf for the Ocean State, and it’s time we take it.”
Ruggerio said he does feel that the legalization bill that was approved in the Senate contained “very strong social justice provisions” and the Senate’s expedited expungements provision is “as close to automatic as practical.”
He also said in July that he’s not disappointed the House hasn’t advanced legalization legislation yet and that “what we really wanted to do was send it over and have them take a look at it” when his chamber passed its cannabis reform measure.
A coalition of 10 civil rights and drug policy reform advocacy groups—including the Rhode Island chapters of the ACLU and NAACP—had demanded that lawmakers move ahead with enacting marijuana reform in the state before the end of 2021. But that did not pan out.
Lawmakers have noted that neighboring states like Connecticut and Massachusetts have enacted legalization, and that adds impetus for the legislature to pursue reform in the state.
Shekarchi, meanwhile, said in July that he doesn’t intend to let regional pressure dictate the timeline for when Rhode Island enacts a policy change. Social equity, licensing fees, labor agreements and home grow provisions are among the outstanding matters that need to be addressed, the speaker said.
The House Finance Committee held a hearing on Slater’s legalization measure in June.
The governor previously told reporters that while he backs legalization it is “not like one of my highest priorities,” adding that “we’re not in a race with Connecticut or Massachusetts on this issue.”
“I think we need to get it right,” he said, pointing to ongoing discussions with the House and Senate.
The House Finance Committee discussed the governor’s proposal to end prohibition at an earlier hearing in April.
Both the governor and the leaders’ legalization plans are notably different than the proposal that former Gov. Gina Raimondo (D) had included in her budget in 2020. Prior to leaving office to join the Biden administration as commerce secretary, she called for legalization through a state-run model.
McKee gave initial insights into his perspective on the reform last January, saying that “it’s time that [legalization] happens” and that he’s “more leaning towards an entrepreneurial strategy there to let that roll that way.”
Shekarchi, meanwhile, has said he’s “absolutely” open to the idea of cannabis legalization and also leans toward privatization.
In late 2020, the Senate Finance Committee began preliminary consideration of legalization in preparation for the 2021 session, with lawmakers generally accepting the reform as an inevitability. “I certainly do think we’ll act on the issue, whether it’s more private or more state,” Sen. Ryan Pearson (D), who now serves as the panel’s chairman, said at the time.
Meanwhile, the governor in July signed a historic bill to allow safe consumption sites where people could use illicit drugs under medical supervision and receive resources to enter treatment. Harm reduction advocates say this would prevent overdose deaths and help de-stigmatize substance misuse. Rhode Island is the first state to allow the facilities.
The Senate Judiciary Committee also held a hearing last year on legislation that would end criminal penalties for possessing small amounts of drugs and replace them with a $100 fine.
Read the text of the governor’s marijuana legalization proposal below: