Commentary

Josh Decatur: In support of a tax and regulate market for marijuana

Editor’s note: This commentary is by Josh Decatur, who is the CEO of Trace, a Burlington business founded in 2018 to design digital infrastructure for cannabis markets of the future.

On July 1, Vermont became the ninth state to allow the legal possession and consumption of cannabis for adult use. In other words, cannabis is now legal in Vermont. Under current law, any Vermonter 21 years of age or older can cultivate up to two mature and four immature plants and possess up to an ounce of dried cannabis. This step should be viewed as a stepping stone to a regulated retail market, also known as a “tax and regulate” market, for cannabis in Vermont.

In 2019 the Vermont Legislature should implement a tax and regulate market for cannabis. Such a market will provide a number of concrete public safety, public health, and economic benefits to the state.

According to a 2015 report from the Rand Corporation, Vermonters consume a significant amount of cannabis – between 15 and 25 metric tons of cannabis in 2014 alone. While it is perfectly legal to grow and consume cannabis in Vermont there are no labeling requirements. This means that Vermonters don’t have access to dosage information and unless they’ve grown it themselves they likely don’t know where the product comes from. A thoroughly regulated market for cannabis would ensure that Vermonters have access to a transparent supply chain. This will ensure they know what is going into their bodies and where their product is coming from.

On the health front, we know from the experience in other states that there are tangible benefits in implementing a regulated market for cannabis. Following legalization, the rate of adolescent cannabis use in Colorado has fallen to its lowest level in nearly a decade, according to the National Survey on Drug Use and Health. This makes sense since the state has revenue dedicated to education and prevention efforts and the fact that a dealer on the underground market doesn’t have any reason to ID their customers – a requirement any retailer in a regulated market will follow lest they risk losing their permit.

The benefits of a regulated market are not limited to public safety and health. The economic benefits to the state would be immense. The Vermont Tax Department has confirmed that the projected revenue from a tax-and-regulate system would cover the costs associated with such a system (education, prevention, etc.). Let’s not ignore the fact that there would be many ancillary economic benefits in addition to the revenue generated by a tax on cannabis and any fees associated with relevant permits. Those benefits include a boost to rural and commercial real estate markets, and new opportunities for electricians, farmers, plumbers, technology companies, construction companies, and other individuals and businesses in Vermont who will provide support to the growers, transporters and retailers of cannabis in the state.

We can regulate cannabis the Vermont way, driving innovation and building on our high-quality brand. Gov. Phil Scott established the Governor’s Marijuana Advisory Commission to evaluate the experience of other states and recommend a path forward for Vermont. The commission recently released its recommendations and recognized the importance of allowing for small growers to enter a regulated market. The commission recommended an unlimited number of licenses for smaller growers, with a cap on larger operations. This will foster a greater level of economic development and will enable Vermont’s small farmers and entrepreneurs to enter the market, keeping the economic benefit local.

If we are able to build a strong base for the industry we will be prepared when an eventual national market emerges and Vermont companies will be able to export to larger markets and bring money back to the state.

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