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Vermont Has Finally Passed Tax and Regulate. So What’s Next?

Heady Vermont Staff
Heady Vermont Staff 13 Oct 2020

It’s tough making national headlines these days with so much chicanery dominating the news, but Vermont made waves last week as Governor Phil Scott allowed S. 54 to pass without his signature, making Vermont the 11th state in the nation to pass tax-and-regulate. He also signed off on legislation to automatically expunge low-level cannabis offenses.

Though the bill has passed, much work needs to be done before the Green Mountain state can open up pot shops. Oct. 1, 2022, is when the Cannabis Control Board can start issuing retail licenses, though some medical dispensaries will be able to open up earlier in the year. Scott, for his part, has already told the Legislature that the timeline “is too aggressive and may need to be extended.”

The tasks ahead for the Control Board are monumental.

The work starts with appointing a Cannabis Control Board — the appointed body that will oversee the establishment of the Vermont’s cannabis market. Under the law, the appointments to a nominating committee must be made by Nov. 1, and names provided to the nominating committee by Dec. 18. The three-person board is to be appointed by Jan. 8.

The tasks ahead for the Control Board are monumental. It will appoint an executive director, who by law, “shall be an attorney with experience in legislative or regulatory matters” — and make rules for recreational cannabis establishments and medical cannabis dispensaries by June 1. Additional responsibilities include setting guidelines for advertising, rules for cultivators, manufacturers and retailers, and further recommendations for how to bolster the program.

Scott highlighted Illinois law as a “benchmark” in creating an equitable cannabis market.

In a letter sent to the Senate last Wednesday evening, the governor said the Legislature needs to work more on drug misuse prevention and racial equity issues in the nascent cannabis industry. Action items he cited include leveling the playing field for smaller operations and businesses owned by women and minorities, and addressing the historic impact of cannabis prohibition on people of color in Vermont.

Scott highlighted Illinois law as a “benchmark” in creating an equitable cannabis market. “We have already enacted similar provisions such as expungement measures,” he wrote in his letter.

He suggested additional ideas such as creating a social equity applicant category for cannabis establishment licenses, a 50 percent licensing fee waiver for these applicants, and more technical and financial supports.

“We must take additional steps to ensure equity is a foundational principle in a new market.”

“I believe we are at a pivotal moment in our nation’s history which requires us to address systemic racism in our governmental institutions,” Scott wrote. “We must take additional steps to ensure equity is a foundational principle in a new market.”

A coalition of farming and social justice groups, led in part by Northeast Organic Farming Association of Vermont, called on Scott to veto the bill leading up to its passage.

NOFA-Vermont, in a blog post from August, stated, “In setting up taxation and regulations for retail sales of cannabis, S.54 does not prioritize restorative justice and inclusion of those most harmed by our nation’s racist history of cannabis prohibition, criminalization and mass incarceration.”

Bruce Barcott, senior editor at Leafly, told the Times Argus this week that the regulatory board created by the law, or the Legislature itself, has time to address those concerns and more in the time leading up to retail sales. He also pointed out the work involved in Vermont’s opt-in requirement for municipalities, a departure from many other states that have legalized pot markets

“Sometimes when legalization passes, people in states who voted for legalization are surprised when they find themselves having to vote for legalization twice,” Barcott said.

So, the work begins with the appointments to the Board – but who will these candidates be? Heady Vermont CEO Monica Donovan said that it’s crucial that advocates band together to create clear messaging and feedback as the state begins the work of constructing the future market.

“What I’d really like to see is unified messaging from advocates and stakeholders in the weeks ahead.”

“What I’d really like to see is unified messaging from advocates and stakeholders in the weeks ahead,” Donovan said. “I think we have shared goals, and that the Governor and lawmakers will listen to what we have to say, as they clearly have in the past – but it’s more effective if we can agree on shared goals in terms of what exactly we’d like to see for rulemaking and improvements.”

She said that the appointment of the Board members was an important step. “Will they be individuals with a commitment to an equitable and thriving cannabis market? Or will they just be shilling for special interests? These people are making important decisions that will affect every aspect of this process,” Donovan said.

“There’s a concern there that we’ve done something that may take away the ability of the average Vermonter to get involved here. We want to look at that again.”

Sen. Dick Sears of Bennington, one of the lawmakers involved in the bill’s reconciliation process, told the Brattleboro Reformer this weekend that the Senate shared his concerns in some areas, such as the head start that the state’s five medical dispensary license-holders have on the market at present.

“There’s a concern there that we’ve done something that may take away the ability of the average Vermonter to get involved here,” Sears said. “We want to look at that again.”

Sears said he also wants to revisit 30 percent of excise tax revenue going to prevention programs, as well as the Senate’s proposal to have part of the 14 percent excise tax shared with host towns of cannabis businesses.

“We want to look at that again. Four or five of us have begun conversations,” Sears said.

The timeline will also move quickly for the expungement bill, the other piece of cannabis legislation, which Scott did sign. The Criminal Division of the Superior Court is required to order the expungement of all criminal justice records — including arrest, custody, and disposition — for possession or cultivation of modest amounts of cannabis prior to January 1, 2021.

The automatic expungement process must be completed by January 1, 2022. Learn more about the expungement bill.

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