The Vermont House of Representatives on Thursday approved a finalized version of a bill to legalize, tax and regulate marijuana sales in the state.
While both the House and Senate had previously passed the bill, S. 54, a bicameral conference committee had to be convened to resolve differences between their respective versions. And following a series of meetings and compromises, negotiators on the panel reached a deal on Tuesday, sending the final proposal back to the floor of both chambers for final consent.
The House approved the compromise legislation in a 92-56 vote. It’s expected to be taken up by the Senate next week, and if it passes there as well, it will head to the the desk of Gov. Phil Scott (R).
Vermont legalized possession of up to one ounce of cannabis and cultivation of two plants in 2018, but there are currently no regulations in place that allow for retail sales.
“It’s exciting to see that Vermont is on the cusp of ending cannabis prohibition for adults,” Matt Simon, New England political director of the Marijuana Policy Project, said in a press release. “Most Vermonters are not interested in growing their own plants, and many are unable to do so because it is prohibited by their rental agreements, so the only sensible policy is to create a regulated market for adult-use cannabis in Vermont. Governor Scott should recognize the merits of this bill and sign it into law after it passes the Senate.”
Under the proposed bill, cannabis would be subject to a 14 percent excise tax, in addition to the state’s six percent sales tax.
S. 54 also contains some social equity provisions such as prioritizing marijuana business licenses for minorities, women and people disproportionately impacted by the war on drugs. An independent regulatory commission would additionally be tasked with promoting small business participation in the market.
A new Cannabis Control Commission would be responsible for issuing licenses for retailers, growers, manufacturers, wholesalers and labs. The body would also take over regulation of the state’s existing medical cannabis industry from the Department of Public Safety .
A 30 percent THC limit would be imposed on cannabis flower, while oils could contain up to 60 percent THC. Flavored vape cartridges would be banned.
“Why do we tax and regulate and control particular substances? We have several reasons,” Rep. Tommy Walz (D) said during the House’s debate prior to voting on the legislation. “One, of course, is that we can get revenue out of it. But also because we can provide some harm reduction. It can provide some protections.”
Local jurisdictions would have to proactively opt in to allow marijuana businesses to operate in their area. Municipalities would also be able to establish their own regulations and municipal licensing requirements.
The three House and three Senate members charged with negotiating the final bill had at times contentious meetings where they hashed out issues such as tax rates, local control, advertising, saliva testing of drivers and even an unrelated seat belt enforcement provision the House unsuccessfully pushed to insert.
Rep. Anne Donahue (R) gave an extensive speech where she agreed fundamentally with the purpose of the legislation.
“Why do we want a tax and regulate sales system for marijuana in Vermont? I think we have a list of pretty good reasons,” she said. “We began with the acknowledgement that this is something that people are using and, in fact, are using legally in Vermont. We want to divert it from the black market. The only way to do that is to create a tax and regulate legal market.”
But ultimately she said the lack of a total ban on advertising and marketing left her opposed to the measure. The contention over advertising occupied much of Thursday’s discussion.
A timeline for the legislation states that it would formally take effect on October 1, 2020—but regulators would then have to make a series of determinations about rules and licensing before retail sales would launch. Dispensary licenses would have to be issued on or before October 1, 2022.
A fiscal analysis on the final bill projects that Vermont will generate between $13.3 million and $24.2 million in annual cannabis tax revenue by Fiscal Year 2025. Licensing fees will lead to additional funds for the state, but the regulatory board created by the legislation will set those levels at a later date. For now, the Joint Fiscal Office estimates the fees could lead to another $650,000 in revenue every year. Municipalities hosting marijuana businesses will also be able to levy additional local fees.
The governor hasn’t indicated whether he’s supportive of the newly revised legislation, but a top legislator said earlier this year that he’s been “at the table” in earlier negotiations and has expressed interest in using some tax revenue to fund an after-school program he’s pursuing. That said, Scott only reluctantly signed the legalization of possession and homegrow into law after vetoing an earlier version, and it’s not clear if the road safety provisions in the final commercialization bill will be enough to satisfy concerns he has voiced about impaired driving.
Outside of the cannabis sales legalization bill, the House approved separate legislation this month that would provide for automatic expungements of marijuana convictions and allow people to possess and grow more cannabis without the threat of jail time than is currently allowed. The Senate could give approval to the latest version next week, setting it up to head to Scott’s desk.
This story has been updated to include comments from lawmakers during the vote.