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Rhode Island Governor’s Budget Includes Legal Marijuana Sales In State-Run Stores

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The governor of Rhode Island called for marijuana legalization through a state-run program on Thursday, including the proposal in her fiscal year 2021 budget.

Gov. Gina Raimondo (D) said that adult-use cannabis shops should be operated by the government, which will source marijuana products through a contractor. While lawmakers in other states have floated the idea of a state-run program, none have ben enacted thus far.

“This legalization takes the form of a state-control model, similar to how liquor sales are regulated in New Hampshire and over a dozen states,” the budget states. “This regulatory approach will allow the state to control distribution, prevent youth consumption, and protect public health.”

Revenue from cannabis sales will be distributed between the state (61 percent), the contractor (29 percent) and municipalities (10 percent). The governor estimated that Rhode Island will take in $21.8 million in fiscal year 2020, $21.1 million in 2021 and $39.6 million in 2022, with revenue expected to grow by three percent each subsequent year.

“A State-control model for adult-use marijuana distribution would enhance the State’s ability to control the marketplace, deter over-consumption, and mitigate problematic, profit-driven practices.”

Under the plan, adults would be able to purchase up to one ounce of cannabis per visit and possess up to five ounces total. Home cultivation of recreational marijuana would be prohibited, according to WPRI.

The Office of Cannabis Regulation (OCR) would be responsible for regulating the market, as well as the state’s medical cannabis and industrial hemp programs.

The budget notes that OCR would work with the Division of Taxation to “ensure proper collection of marijuana excise and sales taxes,” license cannabis businesses and helps “local and state law enforcement in the proper enforcement of the state’s cannabis laws.” It would also partner with the Department of Public Health and the Department of Behavioral Healthcare, Developmental Disabilities and Hospitals to “address the prevention, treatment, and public health aspects of a legal cannabis market.”

This is a significant development in the Ocean State, as the governor had previously been reluctant to take a stance on legalization. But as more states in the region started pursuing the policy change, she said early last year that she was in favor of moving forward with reform.

Raimondo included a legalization proposal in her 2020 budget, but the plan was not adopted by the legislature.

She said in November that she’d again attempt to get legalization approved, calling it “the next logical step” after the growth of the state’s medical cannabis program. That came after Raimondo partnered with nearby states’ governors to discuss a regional approach to legalizing cannabis.

This is the first time her office has put forward a proposal to legalize through a state-run system.

Already, however, top lawmakers are pushing back against the budget plan as it concerns cannabis.

Senate President Dominick Ruggerio (D) said that he’s “disappointed that revenue from the proposed legalization of recreational marijuana was included in the budget proposal.”

“Seeing as the marijuana proposal is unlikely to pass, we effectively have a proposed budget that is out of balance to the tune of $21.8 million,” he said.

House Speaker Nicholas Mattiello (D) expressed a similar sentiment in a statement, saying that he’s “very concerned about her proposal to generate revenue from the sale of recreational marijuana when she was advised this would not be an acceptable policy to the General Assembly.”

“Over $20 million has been estimated, which is risky and short-sighted at best,” he said.

Liz Tanner, the director of the Department of Business Regulation, told WPRI that cannabis “is an industry that’s already around us whether we like it or not,” and she characterized the governor’s proposal as the “most restrictive and conservative adult-use plan by far.”

The idea of establishing a state-run market isn’t unheard of, however, as New Mexico’s House of Representatives approved a bill last year that called for the government to manage most sales in the cannabis market. It later died in the Senate, and a working group convened by the governor advised against the state-run model. In Pennsylvania, a lawmaker similarly introduced legislation last year to legalize and have the state operate marijuana shops.

As 2020 legislative sessions come online, a number of top state officials are paying attention to cannabis reform. The governor of New Mexico put legalization in her agenda for the year—and lawmakers filed a bill to accomplish that on Thursday. New York Gov. Andrew Cuomo (D) renewed his call for legalization in his State of the State address this month. And Virginia’s governor used his State of the Commonwealth speech to reaffirm his commitment to decriminalizing cannabis.

New Mexico Marijuana Legalization Bill Filed After Governor Puts Issue On 2020 Agenda

Photo courtesy of Mike Latimer.

Marijuana Moment is made possible with support from readers. If you rely on our cannabis advocacy journalism to stay informed, please consider a monthly Patreon pledge.

Kyle Jaeger is Marijuana Moment's Los Angeles-based associate editor. His work has also appeared in High Times, VICE and attn.

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Lindsey Graham Challenger Jaime Harrison Backs Legalizing Marijuana

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The Democrat mounting a well-funded bid to oust Senate Judiciary Committee Chairman Lindsey Graham (R-SC) says he supports legalizing marijuana.

“I think we should legalize, regulate and tax marijuana like we do alcohol and tobacco,” Jaime Harrison argued this week. “There is simply no medical reason to lock people up over this issue. In essence, this is about common sense.”

The former South Carolina Democratic Party chairman said that the issue is also a matter of criminal justice reform.

“We know that marijuana arrests, including those for simple possession, account for a large number of drug arrests. The racial disparities in marijuana enforcement—black men and white men smoke marijuana the same rates, but black men are much more likely to be arrested for marijuana possession—is just unacceptable,” he said in an interview with CNBC. “Across the country, we are finding that states are legalizing marijuana and medical marijuana, and it’s just time for South Carolina to lead on this issue.”

Federal campaign finance disclosures filed on Wednesday show that Harrison, who also served as an aide to Rep. Jim Clyburn (D-SC) and a lobbyist with the Podesta Group, outraised Graham for the second quarter in a row.

The state Democratic party, on Harrison’s last day in office as chair in 2017, approved a resolution endorsing a pending medical cannabis bill in the South Carolina legislature.

“Caregivers and patients are searching for treatment options for unmet medical needs, particularly for epilepsy, Alzheimer’s disease, cancers, and the effects of chemotherapy,” the measure said. “The cannabis plant in various forms including oils, creams, drops and liquids has shown some promise in treating these medical conditions.”

A South Carolina Senate committee advanced a medical marijuana bill last year but it never ended up advancing to a floor vote.

In 2018, the state’s Democratic primary voters approved an advisory medical cannabis ballot question by an 82 percent to 18 percent margin.

Graham, for his part, opposes marijuana legalization and hasn’t brought any pending cannabis legislation up for hearings or votes in his panel, which handles criminal justice issues.

That said, he has cosponsored a handful of reform bills in past years. For example, in 2016 he signed onto legislation to protect medical marijuana states from federal interference and reschedule cannabis, and in 2017 he cosponsored a bill to remove CBD from the list of federally banned substances.

He has a mixed record when it comes to votes on cannabis amendments.

In 2015, Graham voted against an Appropriations Committee amendment that would have allowed the U.S. Department of Veterans Affairs to recommend medical cannabis to patients; but the next year he reversed himself and supported a similar measure. Also in 2016, he backed an amendment to prevent the Department of Justice from spending money to interfere with state medical cannabis laws.

Shortly after it was announced he would be taking over the Judiciary panel’s gavel, Sen. Cory Booker (D-NJ) joked that he would be sending marijuana-infused brownies to congratulate Graham, a quip that the incoming chairman seemed to appreciate.

While South Carolina typically isn’t seen as a state where Democrats are likely to pick up a U.S. Senate seat, this year’s contest between Harrison and Graham is attracting attention from national political observers due to the outsized funding haul the challenger has been able to bring in so far.

Illinois Collects $52 Million In Marijuana Tax Revenue In First Six Months Of Legal Sales

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GOP Congressman Withdraws Amendment To Block D.C. Psychedelics Decriminalization

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A GOP congressman filed an amendment to a spending bill on Wednesday, seeking to undermine a local Washington, D.C. ballot initiative to deprioritize enforcement of laws against a broad class of psychedelics.

But while Rep. Andy Harris (R-MD) made the case that his proposed measure represented a reasonable compromise—making it so only psilocybin mushrooms would be low police priorities and only if a doctor recommended them for medical reasons—he ultimately withdrew the amendment rather than force a vote.

“This amendment deals with Initiative 81…which would make the use of hallucinogenic drugs a low priority for enforcement in the District of Columbia,” Harris said in his opening remarks before the House Appropriations Committee.

The congressman added that he’s particularly concerned about the scope of the ballot measure, acknowledging that “there is limited data that psilocybin may be useful in some circumstances” but asserting that the same can’t be said of the other entheogenic substances such as mescaline that would be covered under the activist-driven initiative.

Watch the debate over Harris’s D.C. psychedelics amendment below: 

It should be noted that while activists behind the initiative submitted their signatures last week and believe they have more than enough to qualify for the November ballot in the nation’s capital, the Board of Elections has yet to certify them. Harris acknowledged that but said “I suspect it might be [qualified for the ballot] by the time” the spending bill goes to a bicameral House and Senate conference committee that will finalize the Fiscal Year 2021 Financial Services and General Government bill for delivery to the president’s desk later this year.

It’s not clear if he was signaling that he planned to reintroduce his amendment, which also stipulates that driving under the influence of psychedelics would be prosecutable, on the House floor or if he plans to work to get a senator to tack it onto that chamber’s version of the legislation, which deals with funding for D.C.

“I think the District of Columbia is different from other cities because we have people coming in from all over the country—and we certainly, I would hope, don’t want to be known as the drug capital of the world,” he said.

There was some debate on the measure by the panel. House Appropriations Financial Services and General Government Subcommittee Chairman Mike Quigley (D-IL) and Rep. Betty McCollum (D-MN) voiced opposition while the subcommittee ranking member, Rep. Tom Graves (R-GA), and Rep. Robert Aderholt (R-AL) spoke in favor of the proposal.

“If the district residents want to make mushrooms a lower priority and focus limited law enforcement resources on other issues, that is their prerogative,” Quigley said. “Congress has allowed jurisdictions in California and Colorado to exercise their sovereign right to set policy on mushrooms, the District of Columbia too should be allowed to use their local funds to support their local needs and their priorities.”

Graves argued that “we all can agree that policies that increase the availability of psychedelic drugs in our nation’s capital, that’s dangerous.”

“As the nation’s capital, the District of Columbia, it should be a place where Americans come to see their government at work, for history, maybe go to a Braves-Nats game—it shouldn’t be a destination for illegal drugs,” he said.

McCollum said the amendment serves as another example of Congress attempting to impose excess regulations on D.C. and argued in favor of statehood for the district.

“Now we’re not even allowing the District of Columbia to move forward and decide whether or not this is a good idea,” she said. “I oppose the amendment.”

Rep. Eleanor Holmes Norton (D-DC) celebrated the amendment’s withdrawal with a taunt on Twitter, saying, “Regular #homerule offender @RepAndyHarrisMD tried to bar DC from using its own funds to enact a proposed ballot initiative on entheogenic plants + fungi or any similar law, but then withdrew it before the committee could defeat it.”

That prompted Harris to reply that the “process of educating Congress about how dangerous this initiative is has begun. DC has enough of a drug abuse problem without becoming the drug capital of the country.”

Harris’s office didn’t respond to Marijuana Moment’s request for comment about whether he withdrew the amendment because he sensed he didn’t have the votes to pass it in committee.

In his closing remarks at the markup, the congressman said that his measure “is more than just mushrooms. That’s my whole point.”

“Mushrooms is psilocybin—that has a medical use. This includes mescaline, peyote, three other substances [that] have no medical use at all,” he said.

Melissa Lavasani, who proposed the D.C. ballot measure and is part of the Decriminalize Nature D.C. group working to pass it, said in a press release that “our campaign is about helping D.C. residents by enacting common sense reforms to police priorities that ensure that those using healing plant and fungi medicines are not law enforcement targets.”

This isn’t Harris’s first go at pushing for legislation that leverages Congress’s control over the D.C. budget to interfere in local drug policy issues.

Harris has been a consistent opponent of cannabis reform, repeatedly backing a long-standing congressional rider that bars D.C. from using its tax dollars to implement a legal marijuana marketplace. Last year, however, it was not included in the annual spending bill as introduced by House Democratic leaders and the congressmen didn’t attempt to introduce an amendment to reinsert it. It was included in the Senate version and was included in the final enacted bill following conference committee negotiations, however.

The Drug Policy Alliance sent a letter to committee leadership in advance of Wednesday’s hearing, urging them to oppose any attempts to interfere in D.C.’s ability to vote on the psychedelics reform initiative.

Colorado Marijuana Regulators Propose ‘Franchise’ Business Model For Equity Applicants

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Colorado Marijuana Regulators Propose ‘Franchise’ Business Model For Equity Applicants

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Colorado marijuana regulators are looking for feedback on a proposal to create a franchise cannabis business model to promote equitable participation in the industry by people from communities harmed by the war on drugs.

When legislators initially approved a bill to create an accelerator program for marijuana businesses, it was only designed to give eligible entrepreneurs an opportunity to share a cannabis facility with an existing company. But following stakeholder meetings, regulators laid out a proposal to let those entrepreneurs functionally serve as franchises of current larger marijuana businesses, operating out of separate facilities but sharing branding, advertising and intellectual property under certain conditions.

“The Division contemplates certain components of this alternative ‘separate premises’ model will be similar to a franchisor-franchisee business relationship,” the state’s Marijuana Enforcement Division said in a notice last month.

In order to participate under the new model, the division said it would require a series of disclosures, including initial investments from both parties, terms of any financial arrangements and obligations for the licensee such as non-compete requirements.

Additional requirements could still be developed. For example, the department is considering whether franchisees should be offered reduced or waived rent to use facilities owned by existing businesses that agree to be “endorsement holders.” Regulators are also contemplating limitations for the amount of money a franchise can charge an accelerator licensee as a fee for use of their facilities, as well as liability rules.

“Available incentives for accelerator-endorsed licensees to support the ‘separate premises’ model may also include fee reductions resulting from increased financial assistance and no-cost rent arrangements, and reduced accelerator-endorsed licensee liability,” the division said.

Beyond potentially collecting fees from licensees, the benefit of becoming an endorsement holder under this separate premises model seems to be that they get to indirectly expand their business and exposure while supporting entrepreneurs who might not have the immediate resources to break into the industry.

That said, some advocates are weary of the proposed based on past experience.

“While accelerator programs sound good on paper, they so often create terrible long term power dynamics for smaller businesses that we can not endorse this approach,” Jason Ortiz, president of the Minority Cannabis Business Association, told Marijuana Moment.

“Any relationship that puts a small business owner at the whim of a larger conglomerate makes us concerned that the power dynamic there does not favor the smaller business, who will now have their operation tied to the success of the larger entity,” he said. “We instead encourage any business to invest in grant based programs that allow for smaller businesses to operate on their own premises and to run their business how they see fit.”

At the same time, Morgan Fox, media relations director for the National Cannabis Industry Association, told Marijuana Moment that the proposal “looks like it could create a lot of opportunities for people to get into the industry without having large amounts of capital and could generally lower the barriers of entry significantly.”

“Judging from the comments in the feedback solicitation, it appears that the possibility of predatory or unfair franchise relationships is at the front of the Marijuana Enforcement Division’s priorities and it intends to make it very difficult for endorsement licensees to exploit accelerator licensees,” he said. “However, we’ve learned from the shortcomings and abuses in other equity programs around the country that it is important to continually monitor and assess these programs to ensure their effectiveness.”

Stakeholders can fill out an online form to submit input on the proposal. A hearing to finalize the rulemaking is tentatively set for July 30.

At the same time, the division is also working on the implementation of a bill that defines who qualifies as a social equity cannabis business applicant for the accelerator program. Gov. Jared Polis (D) signed that legislation, which also gives him authority to streamline pardons for prior marijuana convictions, last month.

The division is scheduled to hold a separate hearing on implementing the new bill on July 28.

Illinois Collects $52 Million In Marijuana Tax Revenue In First Six Months Of Legal Sales

Photo courtesy of Kimberly Lawson.

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