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MONTPELIER — A cannabis bill cleared hurdles to get it over a deadline in order to stay under consideration and likelier to pass into law in Vermont.
On Wednesday, the Vermont House of Representatives passed H.612. The bill addresses various issues related to the cannabis market and will now head to the Senate.
“Importantly, H.612 will ban synthetic hemp derived intoxicating products with psychoactive THC that are currently unregulated and appear in gas stations and convenience stores, taking advantage of a federal loophole,” Rep. Matthew Birong, D-Addison-3, said from the floor in a second reading Tuesday. “Another major theme will be adopting the medical cannabis statutes to preserve access to products for patients, as the current model for medical dispensaries is becoming economically unviable alongside adult use retail cannabis stores.”
Birong said the bill provides a path for municipalities to establish preferred cultivation districts to create setbacks and exercise some authority over where cannabis can be grown.
A medical use endorsement option would allow adult-use retailers to serve patients with the same authorizations as medical dispensaries such as curbside delivery pickup and tax-exempt sales to patients. On top of the $10,000 fee retailers pay for their license would be a $250 charge for the endorsement.
Birong said the medical program in Vermont is “experiencing a precipitous decline in enrollment of patients as the economics of scale of maintaining a medical dispensary are no longer sustainable.” A group convened by the Cannabis Control Board to look into the issue recommended the medical endorsement option to help patients and widen eligibility for patients to enter the program.
In a forthcoming report on the medical program, the Vermont Cannabis Control Board plans to make recommendations to the Legislature to modify the process for adding new qualifying conditions, extend the renewal term for chronic pain, create a medical endorsement for retail licensees, and improve access to to medical products and services.
Under the bill, retailers with a medical endorsement would be allowed to sell products that exceed potency caps to medical patients. Sales to medical patients would be exempt from taxes.
Added to the list of conditions to qualify a person for the medical registry is ulcerative colitis. Renewal terms for patients would extend from one to three years.
Fees for medical dispensaries would be cheaper, with applications costing $1,000 instead of $2,500, and the annual charge would go from $25,000 to $5,000. An initial $20,000 fee is eliminated by the bill.
Birong said the goal is to be more equitable and consider “the economic reality of the marketplace.”
“The committee took extensive testimony from license holders, health professionals, regulators and policy developers,” Birong said. “It’s fair to say that there has been no shortage of feedback from Vermonters after the first year of the adult use retailers coming online.”
James Pepper, chairman of the Vermont Cannabis Control Board, is glad a moratorium on cultivation licenses wasn’t included in the bill.
“I think that’s premature to be having that discussion,” he said in an interview.
Pepper described the bill giving the board “more dynamic control over the supply chain” by developing rules on cultivator tier expansions and tier regulation. Any grower who enters the market would have to be “extremely small” and clear performance benchmarks before graduating to a tiered licensure, he said, and cultivators not using their full canopy can be forced down a tier.
“I think it’s just an important provision,” he said. “The current authorities that we have are to just shut down tiers of licensure or licenses in general.”
Pepper has expressed concern that medical cannabis patients would suffer if the bill doesn’t pass into law, suggesting this could be the year where a medical dispensary might close if changes aren’t made.
Eli Harrington, head cultivator and CEO of Vermontijuana, said the bill seems to have “some very obvious things in there for the retailers” but lacks items hundreds of growers are united behind.
“What I see is a bill that has the interest of a very specific people represented,” he said last week.
Based on examining filings with the state, he estimates more than $100,000 was paid to lobbyists in the last legislative cycle.
Harrington said the most common complaints heard at CCB meetings involve ad restrictions, potency caps for the public, and a desire to have smoother processes and better communication. He noted the CCB recommended eliminating the caps for everyone, not just for medical licensees.
Previously, Harrington himself was a registered lobbyist. He had started out blogging about cannabis and registered because his activities fit the description for lobbying. He worries business owners don’t have the time to advocate for themselves at Montpelier and organized a day at the Statehouse in February for cannabis businesses to express what they want for reforms.
“I don’t feel like we were heard and it would be hard for me to find too many points in the policy where the things we advocated for really made it,” he said.
The Vermont Growers Association said it supports and advocates for “lifting the ban on cannabis that tests over 30 percent THC and solid concentrates that test over 60 percent THC.”
“We will work in the Senate to replace this section with its original language that strikes the THC caps from the law,” the group said in a recent editorial.
Pepper and the CCB have been in favor of lifting the caps.
“Frankly, it’s just a policy decision for the Legislature,” Pepper said. “The board has taken a position on that but it’s like, What more can we do …?”
The VGA opposes the cultivation siting section of the bill. Harrington said the language came from local residents who were frustrated with an Essex grower who also had ducks on his property.
“The siting of cannabis cultivation in densely populated areas of Vermont is an important conversation to have,” the VGA said, “but it is important to thoroughly assess the impacts of any proposed restrictions on the siting of outdoor cultivation in dense areas in towns and cities before enacting into law, and that assessment has not occurred with this proposed policy change.”
Pepper said the Legislature hasn’t given the CCB any siting authority, “just basic stuff to municipalities,” with the thinking that those who had been operating in the illicit market in their spare bedrooms and garages would now participate in the legal market.
“The additional siting requirements is certainly a move away from that,” he said. “It gives local authorities more control over where outdoor cultivation is going to happen.”
Pepper said the board has urged lawmakers to be “very clear” if they change anything about siting.
“We said if you change anything, make the standard a bright line standard that we can follow easily,” he said.
He said growers don’t like the provision because it means further restrictions on cannabis, where any other agricultural endeavor would be exempt.
Opposing the current bill, the VGA said it hopes to collaborate with lawmakers on changing it to “better represent our interests to help obtain needed reforms and improve the market this year.”
“To that end, not only do we plan to strike the regressive sections that we note we oppose in the breakdown above from the bill, such as the outdoor siting section, but we also plan to hold committee conversations around and work to include new policies such as equity and community reinvestment funding, public consumption, product registration reform, direct-sales allowances, farmers market-style events, and more,” the association said.
