What’s Going On With the THC Caps?

A public battle between lawmakers in the State House is beginning to ensue over the issue of the THC caps in Vermont’s enabling statute, Act 164, an issue that we know is vital to countless businesses and consumers, so we want to take a moment to provide an update on what’s happening in the Montpelier.

Representative John Gannon (D) Wilmington-6 is the driving-force behind Vermont’s THC caps.

Where did the THC caps come from?

The idea for Vermont’s THC caps came from Representative John Gannon (D) Wilmington-6, who successfully advocated for them in 2020 in bill S.54, which became Act 164. When Vermont enacted Act 164 in October of 2020, allowing the state to tax and regulate cannabis, it became the only state to include THC caps in an adult-use cannabis marketplace, limiting solid cannabis concentrates to 60% THC and cannabis flower to 30% THC. Vermont is still the only state with THC caps with an active adult-use market, Connecticut just passed them, but its market did not open yet. There is no national trend to prohibit high-THC products in the 18 states with adult-use cannabis markets, Vermont and Connecticut are the only exceptions.

What impact will THC caps have on Vermont?

Cannabis concentrates, such as bubble hash and rosin, and concentrate-derived products, such as edibles and topicals, typically account for 50% of a state's entire adult-use market; they are popular products with consumers. Vermont’s adult-use cannabis market is projected to gross over $200 million annually. Rep. Gannon’s THC caps will endanger over $100 million of Vermont's upcoming cannabis market, severely impact product selection, viability and competitiveness, and the participation rate of local unregulated businesses seeking licensure. Should the Rep. Gannon’s THC caps remain law, hundreds of the local businesses trying to transition into the regulated market will see their products prohibited, and consumers will be driven away from Vermont’s regulated market as thousands of cannabis concentrates and concentrate-derived products will stay in the unregulated market, as well be widely available as regulated products in neighboring states.

Where is the reform effort at now?

Removing the THC caps from law is vital to Vermont businesses and consumers.

To best understand the effort to reform the THC caps in law, let’s start before the 2022 legislative session convened.

On November 1, 2021, the Cannabis Control Boards sent a report to the General Assembly recommending lawmakers reform the THC caps by allowing the Board to regulate solid concentrates that test over 60% THC in the interest of public health. In that same report, the CCB also suggests lawmakers allow any cannabis flower that tests over 30% THC to be diverted into other products, such as processed into concentrates or for use in edibles, to avoid crop loss for the producers. These reforms are moderate, we wish they went further, such as eliminating the cap on flower altogether, but they are reasonable enough and we told the CCB we would support them in the State House in 2022.

When the State House convened in January there were several cannabis bills on the docket, which we discuss in detail in a previous post, including bill H.548. This piece of legislation, bill H.548, is titled as a “miscellaneous” bill and covers a range of issues for the adult-use market, including some of the THC cap reforms that the CCB recommended. So, bill H.548 started out with the CCB’s recommendations to reform the THC cap for solid concentrates, specifically, the bill removed the cap from the Prohibited Products section of the law and allowed the CCB to regulate the products. We supported this language, and sought to protect it by following bill as it went from Committee to Committee.

On March 11 bill H.548 arrived in the House Committee on Government Operations and Rep. Gannon removed the THC cap reform language that started in the bill. Since the THC caps in Act 164 were Rep. Gannon’s idea, it can be said he is protecting his language in statute, no matter how flawed it is. Rep. Gannon’s amendment in Government Operations was a sweeping change to the bill, it removed several sections of the text, so the bill needed to return to the Senate to agree to the changes.

On April 14, after bill H.548 left the House Committee on Government Operations, it landed in the Senate Committee on Judiciary. The bill was discussed for a couple of days, hearing testimony from Chair Pepper of the CCB, Herrick Fox of Meristem Farms, and others, including Vermont Growers Association – the process was inclusive. After testimony Chair Pepper and VGA were invited back into Committee for markup and to vote on bill H.548, and at that time, we succeeded in getting the Committee to restore the reforms to the THC caps, so, once again, the bill removed the 60% THC cap on solid cannabis concentrates. This was progress.

After H.548 left the Senate Committee on Judiciary, shortly after April 20, it was sent to the Senate floor where the entire Senate chamber voted to move the bill forward. The bill was on a path to a floor vote in the House before moving to the Governors desk, when Rep Gannon intercepted the bill and brought it back into the House Committee on Government Operations. Back in Committee, once again, Rep. Gannon attacked the THC cap reforms the CCB recommended to lawmakers, and the full Senate approved. Instead of following the Senates lead on an inclusive process, the House Committee on Government Operations only invited prohibitionists to offer testimony on the THC caps, this time around. Then, on May 5, Rep. Gannon introduced an amendment to reverse the THC cap reforms. It’s important to note, Rep. Gannon removed the THC cap reforms in Committee this time around by using procedural trickery to try and circumvent a Committee of Conference – he did not want to send the bill back to the Senate, knowing they want to remove the caps. We caught this procedural maneuvering by Gannon in the House and reported it to Senators.

When the bill passed House Committee on Government Operations for the second time, removing the THC cap reforms, we contacted Senators who brought the bill H.548 back into the Senate Committee on Judiciary to force a Committee of Conference. Bill H.548 is now sitting in a just announced Committee of Conference that includes the following members: Rep. Sarah Copeland Hanzas, Rep. John Gannon, Rep. Harold "Hal" Colston, Sen. Jeanette White, Sen. Christopher Pearson, and Sen. Richard Sears. This is the final inning, as a community we are effective in this policy discussion, Rep. Gannon’s decision to tie himself to the THC caps is drawing greater and greater public scrutiny, and our responsibility now is to work with lawmakers in the Committee of Conference to help ensure the Senates version of bill H.548 gets sent to the Governor’s desk.

Last minute update, bill s.188

This morning, May 10, we caught, what appears to be, Rep. Gannon attempting to circumvent a Committee of Conference, for a second time, by using a different cannabis bill as a vehicle to include his THC cap language. In the House Committee on Agriculture and Forestry this morning, without being listed on the Committee agenda, bill S.188, the agriculture cannabis bill we are working on, was taken-up and amended with the same language Gannon placed into H.548. As a result of this last minute update in the battle over THC caps, we are now looking at 2 different bills to work with as lawmakers and the Vermont media landscape begin to publicly question Rep. Gannon’s good faith on the issue of THC caps and his desire to keep cannabis concentrates unregulated.

Throughout this entire process we have been working behind the scenes to protect and support the CCB’s THC cap reforms because we understand the severity of the issue. Vermont will not have a functioning adult-use cannabis marketplace if craft concentrates and concentrate-derived products are prohibited. The intent of Act 164 is to tax and regulate cannabis, it is in the state and public interest to test and regulate cannabis products rather than keep them illicit and unregulated. As we enter the final inning in the State House and bills get wrapped-up, we will have calls-to-action for the THC caps to help see through the reforms this year. Stay tuned.