Legislative Update
The Cannabis Control Board is expected to hold its first public meeting on Thursday, May 27, and conclude its search for an Executive Director by the end of the month. Earlier in the week, the House passed a version of bill S.25, the preeminent legislation to reform Act 164, then later in the week the Senate suspended the rules, bypassing a Committee of Conference process, reconciled the bill to rush it to Governor Scott’s desk, then adjourned the General Assembly for the year on Friday evening.
“By the end of the day on Friday, the Senate and House had expedited the legislative process for bill S.25 and delivered a final version to the Governor for him to consider, then proceeded to adjourn the General Assembly for the year. Below we take a deep look at the final bill.”
The Vermont legislature adjourned on Friday, May 21, about a week ahead of schedule, they were originally scheduled to adjourn on Friday, May 28. This past week the House and the Senate chambers worked in concert to reconcile their differences with bill S.25, the leading bill to reform Act 164, without the need for a Committee of Conference, in an attempt to rush the bill to Governor Scott’s desk in time before the session ends. We break down the expedited legislative process and examine the final version of bill S.25, and also take look at where Act 164 and the Cannabis Control Board (CCB) are in their own formation process.
Bill S.25
On Tuesday, May 18, the House approved bill S.25 moving the legislation closer to the Governor’s desk while introducing some changes from the original Senate version of the bill. Then, on Wednesday, May 19, the House took up the bill once again to pass two additional amendments, approving the bill, once again, for the Senate. The next day, Thursday, May 20, the Senate chamber accepted the bill, and Senator Balint, and President pro tempore, suspended the rules and ordered the bill get taken up immediately and without a traditional Committee of Conference process. By the end of the day on Friday, the Senate and House had expedited the legislative process for bill S.25 and delivered a final version to the Governor for him to consider, then proceeded to adjourn the General Assembly for the year. Below we take a deep look at the final bill.
Opt-In
The Senate version of S.25 included a provision that would automatically opt-in retail sales for a municipality that did not conduct a town vote by March 2023. The intention behind this language was to attempt to reform the retail sales opt-in provision in Act 164, which is largely seen as an obstacle for small businesses. The House version removed the Senate's provision, and the Senate agreed when they suspended the rules on Thursday. While opt-in is considered inequitable cannabis policy, we think the Senate provision should’ve remained in the final bill as it was an incremental move to eliminate opt-in altogether.
Cannabis Control Board and Advisory Committee
In the Senate our Coalition introduced some amendments to bill S.25 to help bring greater accountability to the new marketplace, including allowing the Advisory Committee (AC) to remove members of the CCB, directing the AC form before the CCB delivers its initial rulemaking, so that body may influence the rules, and include a 13th member on the AC to represent medical patients interests. Much of our language ended up getting modified in the legislative process and the final bill does not include our increased accountability for the CCB, the AC will not form before initial rules are proposed, and the 13th member of the AC is from the Vermont Cannabis Trade Association. Some additional changes to the CCB and the AC in the final version include a 14th member of the AC to be the chair, or a designee, from the Marijuana for Symptom Relief Oversight Committee.
Social Equity
In 2020 Vermont enacted a cannabis taxation and regulation bill, S.54, without a social equity program – that is uncommon, in this day in age, and we see that as a regrettable mistake. People must come before profit. This year, bill S.25 begins to construct what would ultimately become a social equity program, it would create a “Cannabis Business Development Fund” however lawmakers could not agree on the details of that fund nor the social equity applicants and concluded more time is needed to develop the program. Our Coalition, through the work of the Vermont Racial Justice Alliance, and H.414, proposed a robust social equity program, complete with details and research backing the policy, to be included in bill S.25, but both chambers refused to adopt the proposed amendments.
Licensing Fees
Significant delays in Act 164’s formation and implementation process have placed the CCB in a position where it is unable to meet major milestones in market formation without help from the legislature, and bill S.25 includes language to prevent such delays, one of them being licensing fees. The Senate version of bill S.25 said the Joint Fiscal Committee, a bi-chamber committee that meets throughout the year, including when the State House is not in session, shall be given temporary authority to approve fees and work with the CCB. The House version removed the Senate’s provision and remains in the final version of the bill. In House’s response to passing S.25, Representative John Gannon said, “I’m still hopeful that we will be able to get it done so that applications can start in April and licensing can start in May of next year.”
THC Caps
While the final version of bill S.25 does include some modifications to Act 164’s prohibited products clause, it does not remove the THC caps. The final bill directs the CCB to deliver recommendations to the General Assembly by November 1, 2021, on whether or not the 60% THC cap on “solid concentrates” should remain, and whether or not the Agency of Agriculture shall permit hemp or CBD to be processed into delta-9 THC. The consideration to modifications to the “solid concentrates” cap is an incremental win, and this is an issue we will continue to fight for.
Medical Cannabis
There are arguably more significant changes to the state medical cannabis program, in bill S.25 than changes to the emerging adult-use market. The final version of the bill moves up the date the Vermont Marijuana (VMR) folds under the Department of Public Safety (DPS) in Act 164 from March 2022 to January 2022 and absorbs the Marijuana Patient Fund into the CCB’s general fund. The bill will also modify the makeup of the AC to include a designee from the Vermont Cannabis Trade Association and the chair, or a designee, from the Marijuana for Symptom Relief Oversight Committee. Neither of these changes are seen as benefitting patients or caregivers in the state program.
Advertising
Similar to licensing fees, advertising is a major milestone in Act 164’s formation and implementation process that requires the legislature. The Senate also used bill S.25 to patch up the significant delays surrounding advertising and began to include some advertising guidelines for the CCB to complete with State Attorney Generals Office and the legislature, later this year. The final version of S.25 does include some guidelines but more work will be needed, between the CCB and the legislature to complete the advertising guidelines for the marketplace. The advertising provisions in bill S.25 include no advertising that appeals to individuals under 21 years of age, no prizes or giveaways, no advertising on a medium where over 15% of the audience is reasonably expected to be under 21 years of age, and all advertising must be submitted to the CCB before dissemination. As we previously reported on, we anticipate much of the advertising language to be fluid for the next year,
Act 164 & Cannabis Control Board Updates
The CCB now has an office, a website, and as we had previously reported on, and they are in the final stretch in their search for an Executive Director. There are rumors going around the State House about the final candidates in this process, but we look forward to seeing the CCB select a well-qualified Executive Director and complete its formation process so it can begin its work as soon as possible. Looking at the entire timeline for Act 164, the process is still in its January 2021 - April 1 milestone, April 1 being when the CCB was to deliver sweeping recommendations to the legislature. The April 1 milestone will now most likely occur on April 1, 2022, or sooner, during next year’s legislative session.
In its final form, bill S.25 does little to patch up the significant delay’s in Act 164’s formation and implementation process, nor does it address the racial, agricultural, economic, or medical inequalities that exist and were highlighted by the Governor last year when he did not sign S.54 but allowed it to become law. As a state, we must address the shortcomings in our new taxation and regulation law, and preserve and expand our medical cannabis program. We will have more on our position on bill S.25 in the near future.