Senate Passes Cannabis Bill Focused on Improving Social Equity, Preventing Delays

MONTPELIER — Legislation that would make several changes in the state’s budding adult-use cannabis market and head off possible delays in the rollout of legal pot sales was approved Wednesday by the Vermont Senate.

The bill, S.25, which seeks to improve racial equity in the cannabis industry, would require towns to vote by 2023 on whether to allow pot sales — and if they don’t, they automatically “opt in” — and sets advertising restrictions for cannabis businesses.

The legislation is expected to pass on a second vote Thursday before it’s sent to the House. The Senate introduced the bill in March.

Legislators and Gov. Phil Scott acted last year to establish a taxed and regulated marketplace for cannabis, but retail cannabis establishments won’t begin to open until October 2022, at the earliest.

However, because Scott is late in appointing a Cannabis Control Board — which will regulate the new marketplace — there are concerns that legal sales in the state could be pushed back by up to a year. That’s because the board had been expected to make recommendations on industry licensing fees this spring, and lawmakers are supposed to approve them this session.

The Senate’s cannabis bill attempts to address that problem. Sen. Chris Pearson, P/D-Chittenden, proposed amending the bill so it gives the Legislature’s Joint Fiscal Committee, which meets several times between legislative sessions, temporary authority to approve the fees and allow businesses to begin the licensing procedure before 2022.

“I’m impatient,” Pearson said Wednesday on the Senate floor. “The Senate has asked for this law to be in place and up and running for several years now, and the prospect of losing an extra year is not something that we need to tolerate.”

Fund for Social Equity Applicants

Before cannabis businesses open, the Senate legislation would establish a fund to provide loans and grants to help people of color, and others who have been affected by cannabis prohibition, to get a leg up in the nascent adult-use market.

The bill would create the “Cannabis Business Development Fund,” with state officials designing a system for offering the financial help to “social equity applicants” — that is, people disproportionately hurt by the War on Drugs.

The control board and its 12-member advisory committee would make recommendations to the Legislature on who would qualify as a social equity applicant, and the board would come up with a plan to reduce or eliminate fees for those applicants.

In discussing the bill, lawmakers raised concerns about making the criteria overly broad for social equity applicants. For example, while many people have been arrested for cannabis, not all have faced the same experiences within the criminal justice system.

“Many people, many white college students, for example, might get caught up in law enforcement, but have a very different experience when it comes to sentencing, or actual findings of guilt, than Black and brown Americans,” Sen. Kesha Ram, D-Chittenden, said on the Senate floor Wednesday.

“We do want to put together an advisory board that has far more lived experience and expertise than we do here in the body, and it’s really important that we draw on that lived experience and expertise to come to an ultimate conclusion that truly helps those who have been greatly impacted by the over-criminalization of cannabis,” Ram said.

The bill immediately provides $500,000 for the fund.

“To make sure that the social equity applicants get the money and support necessary to develop a business, it is important that the money be available upfront, which will allow entry into the industry at the beginning,” said Sen. Jeanette White, D-Windham, chair of the Senate Government Operations Committee.

A majority of senators voted for S.25 on Wednesday. Only Sens. Alice Nitka, D-Windsor, and Russ Ingalls, R-Essex-Orleans, could be heard opposing the legislation.

Sen. Randy Brock, R-Franklin, the Senate minority leader, said Wednesday he would support the bill but was “uncomfortable” with its social equity provisions.

“I’m very uncomfortable with a trend that I see in this bill, in which we appear to be making decisions based upon color and ethnicity, in terms of regulation and in terms of fees. We are a nation of individuals, not a nation of individuals who are in subgroups that should be treated differently based upon their color, or their gender, or their sexual orientation, or their ability or disability,” Brock said.

Automatic Opt-In for Municipalities

If it became law, the bill would encourage towns to hold votes in the next two years on whether to welcome local cannabis businesses.

Under current law, Vermont’s towns and cities would have to vote to allow retail pot businesses within their borders before those stores could set up shop. But S.25 would require that municipalities vote on the issue by March 2023, or else be automatically considered “opt-in” municipalities, where cannabis businesses are permitted.

Scott, who favors giving towns the power to decide whether to welcome retail cannabis businesses, has indicated he opposes the change.

No More Ban on Advertising

The bill does away with an outright ban on advertising for cannabis businesses, which was part of last year’s law. Some lawmakers have raised a concern that an advertising ban is unconstitutional. Instead, S.25 offers specific advertising restrictions: Businesses couldn’t depict a person under 21 using cannabis, make deceptive or false statements, promote overconsumption, or advertise in mediums where 15% of the audience is “reasonably expected” to be younger than 21.