The marijuana tax and regulate bill is finally headed to a floor vote in the House after two years of tinkering in Democrat-led committees facing resistance from Gov. Phil Scott, who hasn’t made a commitment to support the initiative.
Scott’s not the only skeptic. Critics have two main objections to S.54. Small growers say the proposal presents too many barriers to the legal market. And the group Justice for All says the legislation does not rectify decades of marijuana criminalization that has disproportionately impacted people of color.
Lawmakers say they have included adequate protections for small businesses, and a separate bill addresses the criminalization issue.
The House Appropriations Committee passed the measure in a 6–5 vote Monday, and the full House is expected to vote on S.54 as soon as Wednesday.
Scott’s opposition to the bill has narrowed to a provision on saliva testing for suspected intoxicated drivers. He doesn’t think police should need court warrants to conduct the test; the current bill would require warrants. That’s been a particular sticking point in the Senate, which still needs to sign off on a negotiated version of the bill before it heads to the governor.
A number of House Republicans have changed their position on the legislation, which sets the stage for a cannabis market. GOP supporters say a full legal market makes sense now that limited possession is legal.
The House bill places a 14% excise tax and a 6% sales tax on cannabis sales. According to a mid-range estimate from the Joint Fiscal Office, the state could expect to see about $13 million in tax revenue about four years after dispensaries start selling to consumers in 2022. Of that amount, $8.9 million would be sent to the general fund, and $3.8 million would go to the education fund.
“We’re expecting a boom and bust system with this bill,” said Geoffrey Pizzutillo, executive director of the Vermont Growers Association, who is among the bill’s critics. While larger dispensaries may thrive, he predicts that small independent growers will remain hidden in the black market.
Pizzutillo takes particular issue with a provision in the bill that instructs the Cannabis Control Board, which would oversee market regulations, to give license priorities to existing medical marijuana dispensaries. Out of the five dispensaries in the state, all but two are funded by out-of-state entities.
Lawmakers haven’t set license tiers and specifications for different types of growers. That’s the job of the Cannabis Control Board, a body made up of government appointees. Pizzutillo warns the board could be “corruptible” or have certain biases.
The only specific classification in the bill spells out that small growers would be restricted to 500 square feet of growing space — which Pizzutillo said would be close to impossible to make a profit on.
Small growers object to restrictions
Rural Vermont, a farmers advocacy organization, says it doesn’t support the legislation. Graham Unangst-Rufenacht, policy director for the organization, said the group is particularly concerned that the bill does not designate cannabis as an agricultural product.
Under this provision, farmers would have to apply for a different license to grow cannabis, further disincentivizing local growers to enter the market, said Unangst-Rufenacht. He also warned that this change could cause conflict with zoning and trust laws that only permit farmers to grow agricultural products.
Unangst-Rufenacht also points to provisions that are nonsensical for farms to follow, such as a requirement that cannabis be grown in a locked facility that is not visible to the public.
“Closed, locked facilities are very hard to establish in a field,” Unangst-Rufenacht said. “And what if a farm is next to a major road?”
Rep. Sarah Copeland Hanzas, D-Bradford, an architect of the legislation and chair of the House Government Operations Committee, said she and her colleagues have “tried to make it as easy as possible” for small growers to thrive in the legal marijuana market.
She says prioritizing the current medical dispensaries won’t create a market monopoly because there are only five licensed in Vermont. She also pointed to an element of the bill that would allow residents with prior cannabis convictions to apply for market licenses as a way to encourage illicit growers to enter a legal system.
Before the bill comes to a vote in the House on Wednesday, Hanzas said she’ll be introducing an amendment to expand the small grower restrictions from 500 square feet to 1,000.
“We had set it at 500 as a shot in the dark. None of us are really growers,” Hanzas said. “But in these back and forth conversations with these small growers, they have made a pretty good case that 1,000 square is a better smaller tier size.”
Other organizations think the legislation does enough to incentivize small growers and businesses to enter the legal market. Laura Subin, director of the Vermont Coalition to Regulate Marijuana praised lawmakers’ efforts to control cannabis market consolidation. The legislation only allows companies to buy one license in each licensing category so that one business can’t buy up all of the cannabis market potential.
If the measure passes the House this week and heads to conference committee, advocates and critics can still try to influence final revisions.
“There’s still a lot of room for advocacy,” Subin said.
Expungement for low-level marijuana offenses?
The bill has provisions that attempt to rectify the disproportionate criminalization people of color have faced during marijuana prohibition. The Cannabis Control Board, for example, would prioritize licenses for minority-owned and women-owned businesses.
But Mark Hughes, director of Justice for All, said the legislation doesn’t go far enough. He said the bill should also carry an automatic expungement mechanism for everyone who has a low-level marijuana offense. Currently, there are separate bills in both the House and Senate that address expungement, but Hughes wants the provision to go into effect as soon the market becomes legal.
Hughes is also concerned about the use of saliva testing on drivers who are suspected of driving under the influence of marijuana. He thinks the testing could be disproportionately used against people of color, who are more often stopped for traffic violations in Vermont.
“[Lawmakers] are willing to compromise our civil liberties for their money,” Hughes said. “So that is deeply concerning.”
Rep. John Gannon, D-Wilmington, said social equity concerns are not the main thrust of the tax and regulation legislation. He supports the separate pieces of expungement legislation moving through the Statehouse.
“This is not a criminal justice reform bill,” Gannon said. “This is a bill to regulate cannabis.”
