A push to legalize commercial marijuana sales in Vermont took another step forward on Wednesday, with the House Ways and Means Committee voting to advance a bill to license and tax cannabis businesses.
If the legislation, S. 54, becomes law, retail marijuana sales would begin in Vermont in the next two years, and tax revenue to the state could reach a projected $50 million by fiscal year 2024.
“Today’s vote is another clear indicator that S. 54 enjoys strong momentum in the House,” Matt Simon, New England political director for the advocacy group Marijuana Policy Project, told Marijuana Moment following the vote. “Vermonters are looking forward to seeing this bill become law in 2020 so the state can begin to reap the many benefits associated with sensible regulation of cannabis.”
The vote to advance the bill was 8–3.
The Vermont Legislature in 2018 legalized low-level marijuana possession and home cultivation, becoming the first U.S. state legislature to do so. But lawmakers at the time stopped short of allowing retail sales or licensing commercial businesses. The Senate approved a commercial cannabis sales measure last year, but it stalled in the House.
The bill, S. 54, is still alive in the two-year session and would create a variety of marijuana business licenses, establish a government agency to oversee the new industry and set tax rates on legal sales. The bill would also set limits on product potency, capping THC in cannabis flower at 30 percent THC and limiting concentrates to 60 percent THC.
Passage of the bill would more closely align Vermont with other legal cannabis states, such as Massachusetts and Colorado, where adults 21 and older can purchase legal, lab-tested products from state-licensed stores.
As part of Wednesday’s committee action, lawmakers adopted amendments that revised the bill’s planned tax rate, increasing it from a proposed 16 percent sales tax to a 20 percent combined rate that consists of 14 percent excise tax and 6 percent sales tax.
“We sort of found that 20 percent, which is what Massachusetts does, is a good place to land,” Rep. Janet Ancel (D), the committee chair, told VTDigger after the vote. “I think there might be some tolerance for being a little higher than that, but not much.”
Under the new tax structure, Vermont is projected see marijuana revenues ramp up quickly after legal sales kick off. Estimated revenue for fiscal year 2022 is just $1.3 million, but that increases to $30.1 million in fiscal 2023, $50.9 million in 2024 and $63.8 in 2025.
The tax provisions include some limitations. Registered medical marijuana patients would be exempt from state taxes, and municipal governments would be prohibited from adding their own new local taxes on cannabis.
With the successful Ways and Means Committee vote, the measure now heads to another panel, the House Appropriations Committee, before heading to the full House for a vote. Because the Senate approved an earlier version of the legislation last year, differences between the chambers’ proposals would need to be ironed out before a final measure is sent to the governor’s desk.
Gov. Phil Scott (R) initially opposed retail cannabis sales, but a top Democrat in the House said that he’s recently warmed to the proposal and has been “at the table” in ongoing discussions about specific provisions. An administration official said last month that the governor was considering using tax revenue from marijuana sales to fund a proposed after-school program.
This story was updated to reflect the additional vote of a lawmaker who was absent for the early part of the committee hearing.
New York Legal Marijuana Push ‘Effectively Over’ For 2020, Governor Says
New York Gov. Andrew Cuomo (D) conceded on Saturday that it’s unlikely marijuana will be legalized in the state this year.
“Marijuana and the gig economy were two of the more complicated initiatives that we wanted to work through that we didn’t get a chance to do,” he said in response to a question about which policy issues he would’ve liked to tackle in the annual budget bill that passed this week.
“Is the session effectively over? It’s up to the legislature, but I think it’s fair to say it’s effectively over,” he added, noting that several state lawmakers have been infected with coronavirus.
(Marijuana Moment’s editor provides some content to Forbes via a temporary exclusive publishing license arrangement.)
Congresswoman Wants Ban On DC Marijuana Sales Lifted Through Coronavirus Legislation
A congresswoman is calling on the government to end a policy prohibiting Washington, D.C. from legal marijuana sales, arguing that the jurisdiction is in particular need of tax revenue from cannabis commerce due to the coronavirus outbreak.
Rep. Eleanor Holmes Norton (D-DC) has repeatedly condemned the congressional rider barring the District of Columbia from allowing retail sales that has been extended each year since 2014, shortly after local voters approved a ballot measure to legalize low-level possession and home cultivation. But given the need for resources to combat the pandemic, she said a reversal of the provision should be included in the next COVID-related relief bill.
“At this moment of unparalleled need, D.C. should be able to collect tax revenue from all available sources, like every other jurisdiction, including from recreational marijuana, which is believed to be widely used in the District,” the congresswoman said in a press release on Friday, adding that D.C. was shorted in the last stimulus because Congress treated it as a territory rather than a state.
“While I am working for a retroactive fix in the next coronavirus bill, it is imperative that Congress also repeal the D.C. recreational marijuana commercialization rider in the next bill to help D.C. shore up its finances,” she said. “It is beyond unreasonable that congressional interference keeps only the District from commercializing recreational marijuana, while all other jurisdictions are free to do so.”
— Eleanor Holmes Norton (@EleanorNorton) April 3, 2020
“Bringing the District in line with other jurisdictions would create a critical source of tax revenue in our time of need.”
Last year, the House approved an appropriations bill that excluded the D.C. rider, but it was included in the Senate version and ultimately made its way into the final package that the president signed. The cannabis commerce ban was also included in President Trump’s budget proposal earlier this year.
“True to form, Representative Eleanor Holmes Norton continues to be one of the best allies to the cannabis reform movement,” Justin Strekal, political director for NORML, told Marijuana Moment. “During this unprecedented COVID-19 outbreak, it is critical that lawmakers analyze and reform any and every aspect of public policy to mitigate the health crisis and build a foundation for a strong recovery.”
“As the majority of states that regulate cannabis have deemed the industry essential to the continued functioning of their jurisdictions, the continued congressional prohibition of the District of Columbia enacting it’s own adult-use program becomes even more ridiculous,” he added.
Norton, in an interview about her push, said that the congressionally mandated prohibition on sales doesn’t prevent people from accessing cannabis but does block the city from collecting tax revenue.
“You can buy two ounces but, by the way you’ve got to do that on the black market,” she told WUSA-TV. “But there’s nobody to tax it. And I’m simply trying to get the taxes the District is due for merchandise, in this case marijuana that’s being consumed readily in the District of Columbia.”
🟢🟢 LEGALIZING COMMERCIAL MARIJUANA IN D.C. 🟢🟢
I spoke to D.C.'s Delegate @EleanorNorton
She's pushing for fully legal commercial marijuana sales in the District in a 4th Congressional stimulus package.
The District needs the money.
And people are smoking weed anyway. pic.twitter.com/PL9yoDKlrj
— Adam Longo (@adamlongoTV) April 3, 2020
Legislative priorities for Congress have shifted significantly as lawmakers attempt to address the outbreak, and that’s meant putting some reform efforts on hold. However, the issue isn’t being ignored entirely, and it’s possible that other members may look to attach modest marijuana proposals to additional coronavirus legislation.
For example, Rep. Katherine Clark (D-MA) said this week that U.S. Department of Veterans Affairs policy preventing its doctors from recommending medical cannabis in legal states puts service members at risk in Massachusetts because the state is shuttering recreational shops (but not medical dispensaries) and some veterans fear registering as patients out of concern that they could lose federal benefits.
Eleven senators wrote a letter to Appropriations Committee leadership asking that they allow small cannabis businesses to access federal loans and disaster relief programs. While the lawmakers said it should be enacted through an annual spending bill, advocates have argued that the policy change should be pursued through coronavirus legislation since these businesses are facing challenges just like those experienced by many other companies during the pandemic.
Photo courtesy of WeedPornDaily.
North Dakota Activists Say Marijuana Legalization Initiative Unlikely In 2020 Due To Coronavirus
North Dakota activists announced on Thursday that they are suspending their campaign put marijuana legalization on the November ballot due to the coronavirus outbreak.
In a Facebook post, Legalize ND said “we are going to have to face a few hard realities going forward” as businesses are shuttering, public events are being cancelled and individuals are encouraged to shelter in place. The pandemic means in-person signature gathering can’t take place, and the state does not allow for alternative signing options such as by mail or online.
“Due to the virus all of our major avenues for signature collection have been cancelled or indefinitely postponed, and going door to door is not safe for both those knocking and those getting knocked,” the group said. “Businesses will continue to collect, but we don’t want to create another vector for the coronavirus. As a result, at this time if something major doesn’t change we will not be able to make the 2020 ballot.”
Legalize ND said there’s no way for state policies related to signature gathering to be changed ahead of the November election. They needed to collect 13,452 valid signatures from voters before July 6 in order to qualify. In all likelihood, the campaign said it would have to shift its focus to the July 2022 primary election.
“This isn’t the solution we want, but given the situation it is what will have to happen,” the post states. “Stay safe, and hopefully we can make a major push when the quarantine ends.”
The proposed initiative would allow individuals to purchase and possess up to two ounces of cannabis. Unlike a much more far-reaching measure the same group pushed in 2018 that included no possession or cultivation limits, which voters rejected, this version would prohibit home growing, impose a 10 percent excise tax and establish a regulatory body to approve licenses for marijuana businesses.
North Dakota voters approved a medical cannabis initiative in 2016.
The coronavirus outbreak has dealt several blows to drug policy reform efforts in recent weeks.
Likewise in Washington, D.C., advocates for a measure to decriminalize psychedelics asked the mayor and local lawmakers to accept online signatures for their ballot petition.
In Oregon, advocates for a measure to decriminalize drug possession and a separate initiative to legalize psilocybin for therapeutic purposes have suspended in-person campaign events amid the pandemic.
In New York, Gov. Andrew Cuomo (D) recently conceded that legalization was “not likely” going to happen through the budget, as he hoped. Coronavirus shifted legislative priorities, and comprehensive cannabis reform seems to have proved too complicated an issue in the short-term.
Idaho activists announced on Thursday that they are suspending their campaign, though they are still “focusing on distributing petitions through online download at IdahoCann.co and encouraging every volunteer who has downloaded a petition to get them turned in to their county clerk’s office by mail, regardless of how many signatures they have collected.”
Finally, in Arizona, a legalization campaign is petitioning the state Supreme Court to instruct the secretary of state to allow individuals to sign ballot petitions digitally using an existing electronic system that is reserved for individual individual candidates seeking public office.
Photo courtesy of Philip Steffan.