CCB and Legislative Update

The CCB has wrapped-up Rule 1 and 2, and the public input period for Rule 3 and 4 is well underway. Key pieces of legislation, including H.701, the license fee bill, are advancing in the State House, committees in both chambers are holding important conversations that may bring sweeping changes to the emerging adult-use marketplace. We continue to work with our Coalition and colleagues to influence these rules and bills to bring greater equity and fairness to the market for all.

Vermont is in the heat of it. The rulemaking process continues to move along, the CCB is firing on all cylinders passing major milestones, while lawmakers in numerous committees in both chambers of the State House work on several key pieces of legislation. On February 3, the Board filed its final proposed Rule 1 and 2 with the Secretary of State and the Legislative Committee on Administrative Rules, a final step in the state rulemaking process before it goes into effect. With all of this happening, according to Act 164, as of February 1, the medical dispensary holders can cultivate and manufacturer products for transfer or sale to a vertically integrated licensee, the application period for many of the initial licenses opens April 1, and the first day of adult-use sales in Vermont is May 1!

“With the rulemaking process in full swing and several different bills moving in various directions in the State House, we want to pause and take a moment to acknowledge the impracticality of this climate for individuals and small businesses interested in participating in the adult-use market. Applications for small cultivators, integrated licensees, and testing labs open April 1, which means the necessary rules and key pieces of legislation will barely be final by then, if at all – putting aside the best intentions of the CCB, this market rollout being defined by Act 164 is unreasonable and fundamentally inequitable.”

Rule 1 & 2

After months of public meetings, grassroots advocacy, lobbying, and public engagement, the CCB filed its final proposed Rule 1 and 2 with the state on February 3, marking the end of a process and an early understanding of what the future of legal cannabis will look like in Vermont. Though the Legislative Committee on Administrative Rules can still alter the language in the proposed final rules, they are expected to convene on February 24 to discuss the rules, what the Board filed will likely be the final rule. 

Rule 1 is the Licensing of Cannabis Establishments, the final proposed rule may be viewed here, Rule 2 is the Regulation of Cannabis Establishments, and that final proposed rule may be viewed here. As a brief overview of the final rules, from their earlier versions, we have managed to move the CCB in some areas, such as defining greater plant counts for outdoor production and increasing some licensing application exemptions for small producers, making them more accessible, while other areas seem to have taken a step back, such as the elimination of a nursery license and the lack of direct sales for producers, more work is clearly needed. We will have a more in-depth look at Rule 1 and 2 in a future post.

Bill H.701 & S.188

The license fee bill has emerged over the past month and is on the move. Bill H.701 has been voted out of its sponsor committee, the House Committee on Ways and Means, it has since left the House chambers already and is now in the Senate. This bill is moving quickly, it is absolutely vital to the adult-use market, and the CCB, there will be no market without it. The House Committee on Ways and Means has included license fee "Option C" into H.701, with the following fee breakdown:

Outdoor Cultivator License Annual Fee, As Currently in H.701
Tier 1, $750.00; Tier 2, $1,875.00; Tier 3, $4,000.00; Tier 4, $8,000.00; Tier 5, $16,000.00; and Tier 6, $34,000.00.

Indoor Cultivator License Annual Fees, As Currently in H.701
Tier 1, $1,500.00; Tier 2, $3,750.00; Tier 3, $8,000.00; Tier 4, $16,000.00; Tier 5, $36,000.00; and Tier 6, $75,000.00.

Mixed Cultivator License Annual Fees, As Currently in H.701
Tier 1, $1,800.00; Tier 2, $2,250.00; and Tier 3, $5,000.00.

Manufacturer Cultivator License Annual Fees, As Currently in H.701
Tier 1, $10,00.00; Tier 2, $2,500.00; and Tier 3, $15,000.00.

Other License Annual Fees, As Currently in H.701
Retailers, $10,000.00; Testing Laboratories, $1,500.00; and Integrated licensees, $100,000.00.

In addition to the annual licensing fee, bill H.701 includes an annual $100.00 local licensing fee and a $1,000.00 one-time fee application fee. An applicant can also pay $500.00 for intent-to-apply, and if the applicant subsequently seeks a license within six months after paying the intent-to-apply fee, the initial one-time application fee of $1,000.00 shall be reduced by $500.00. Read the current version of H.701 here.

In addition to affecting change on bill H.701, we have been doing committee work on bill S.188, the agriculture bill. Central to this bill is the outdoor designation of outdoor cultivation as agriculture, a long-held tenet of VGA and the Vermont Cannabis Equity Coalition. Also in this bill, we seek the allowance of all cultivators to sell living plants and seeds to other licensed cultivators and the general public, to increase home grow plant counts to 6 mature and 12 immature, the same numbers found in bill S.186, the medical cannabis bill, on-farm direct sales, and more. As of today, Friday, February 11, S.188 has been voted of the Senate Committee on Agriculture and is headed to, most likely, Ways and Means. Read the current version of S.188 here.

Conclusion & thoughts on Process

With the rulemaking process in full swing and several different bills moving in various directions in the State House, we want to pause and take a moment to acknowledge the impracticality of this climate for individuals and small businesses interested in participating in the adult-use market. Applications for small cultivators, integrated licensees, and testing labs open April 1, which means the necessary rules and key pieces of legislation will barely be final by then, if at all – putting aside the best intentions of the CCB, this market rollout being defined by Act 164 is unreasonable and fundamentally inequitable. We hear you out there, loud and clear, this is the reason why VGA and the Vermont Cannabis Equity Coalition strongly opposed bill S.54, and it is why we continue to fight and focus most of our organizational efforts and resources on advocacy.