A bill that seeks to improve social equity in the state’s fledgling marijuana market and modify the rollout of legal pot sales has been approved by the Vermont House.
The legislation, S.25, which was approved in a voice vote Tuesday afternoon, would establish a fund to help people of color and others affected by past marijuana laws to open businesses in the new marijuana market.
The bill was first passed by the Senate in March.
The bill would create the “Cannabis Business Development Fund,” and charge state officials designing a system of providing loans and grants to “social equity applicants” — that is, people who were disproportionately hurt by marijuana criminalization.
The Senate introduced these provisions earlier this year after Gov. Phil Scott and others said that last year’s bill legalizing marijuana sales didn’t do enough to address social equity in the new marketplace.
“Many, including the governor, did not believe that Act 164 went far enough in creating a cannabis market that was equitable and just,” said Rep. John Gannon, D-Wilmington, referring to last year’s marijuana law.
It remains unclear who will qualify as a social equity applicant.
Under the legislation, the Cannabis Control Board, the newly minted regulator of the industry, and Vermont’s director of racial equity will propose social equity criteria for lawmakers to consider next year.
The bill also introduces some advertising restrictions for marijuana businesses.
Under the legislation, businesses couldn’t depict a person under 21 using cannabis, promote overconsumption or advertise in mediums where 15% of the audience is “reasonably expected” to be younger than 21.
The cannabis legislation received a vote without much debate. However, before it was approved on Tuesday, lawmakers considered several amendments.
Rep. Anne Donahue, R-Northfield, proposed an amendment seeking to make advertising restrictions for cannabis establishments even stricter. Her proposal would allow businesses to promote themselves but ban any form of advertising that directly encourages cannabis consumption.
Last year, Donahue successfully pitched an amendment that banned marijuana advertising entirely. The Senate stripped out that ban before 2020’s marijuana bill became law, fearing that an outright prohibition on advertisement would be unconstitutional.
On Tuesday, the Vermont Attorney General’s Office raised concerns about Donahue’s new amendment, noting that it may also be too broad and fail in court. It was ultimately voted down 76-57.
In a separate amendment, Rep. Arthur Peterson, R-Clarendon, proposed seeking to broaden local control in the marijuana industry. Peterson pitched requiring towns to vote before allowing any marijuana-related businesses within their borders. Currently, municipalities must vote only on retail pot businesses before those stores can set up shop in town.
Peterson said he also wants towns to decide on whether to welcome marijuana cultivators, wholesalers, product manufacturers and testing facilities.
“I think this offers a good way for towns to protect themselves from the encroachment of the cannabis industry,” Peterson said. “And we’re not talking about corn and soybeans. As you all know, cannabis has THC in it, which is a dangerous drug.”
Gannon said that making it harder for cannabis cultivators to legally set up shop throughout Vermont would also make it more difficult for Vermont to eliminate its black market for marijuana.
“If we had allowed cities and towns to prohibit cannabis cultivators, the illicit cultivators that exist in those cities and towns would remain, harming our efforts to reduce the illegal market in cannabis,” Gannon said.
He added that the other types of marijuana businesses conduct “no retail business” and don’t present “local law enforcement issues or other municipal challenges.”
[Get the latest status on more than 30 key pieces of legislation in VTDigger’s 2021 Bill Tracker.]
Peterson’s amendment failed in a vote of 89-38.
The House, however, removed a provision proposed by the Senate that would require that municipalities hold votes on whether to allow pot shops by March 2023.
Under the Senate legislation, towns that didn’t conduct votes by then would be automatically considered “opt-in” municipalities, where marijuana retailers are permitted.
The amendment “fundamentally changed … the ability of communities to choose to opt in for cannabis retail markets,” Gannon said.
Under the cannabis legislation that passed last year, retail pot shops can open up as soon as October 2022.
However, lawmakers had expressed concerns this year that because of a delay in appointing the Cannabis Control Board, there could also be a delay in the rollout of legal marijuana sales.
Scott announced the leaders of the board in late March, two months later than expected. The panel was charged with making recommendations on industry licensing fees this spring, and lawmakers were supposed to approve those fees this session.
But because the board’s appointment came late, those recommendations cannot be made until after lawmakers adjourn for the year.
In response, the Senate’s bill gave the Legislature’s Joint Fiscal Committee temporary authority to approve the fees and allow businesses to begin the licensing procedure before 2022. The committee meets several times a year, even when the Statehouse isn’t in session.
The House’s bill would return the power of setting fees to the full Legislature. The control board would be expected to deliver its fee recommendations to the House Committee on Ways and Means by Oct. 1.
Gannon said House lawmakers will begin reviewing the fee recommendations before the next legislative session begins and believes there is still a path to legal marijuana retailers opening up in fall of 2022.
“I’m still hopeful that we will be able to get it done so that applications can start in April and licensing can start in May of next year,” Gannon said.
S.25 is expected to pass on a second vote Wednesday, before returning to the Senate.
