What You Need To Know About Vermont's New Tax-And-Regulate System For Cannabis
It's been in the works for years and now a bill has been passed: a tax-and-regulate system for recreational cannabis in Vermont. This hour, we'll look at how the law will work, the timeline for retail sales and some of the ongoing questions about whether the law adequately addresses social justice issues.
Our guests are:
- Sen. Dick Sears, a Democrat from Bennington who was the primary sponsor of the bill.
- Sen. Joe Benning, a Republican from Caledonia who was a sponsor of the bill.
- Mark Hughes, the executive director of Justice For All and coordinator for the Vermont Racial Justice Alliance, which has been campaigning against the bill.
- Geoffrey Pizzutillo, the executive director of the Vermont Growers Association.
Broadcast live on Monday, Oct. 12, 2020 at noon. Rebroadcast at 7 p.m.
5 Key Questions Answered About Vermont's New Tax-And-Regulate Cannabis Law
1. What is the system for taxation under this law?
“There are two different taxing systems here. One is the 6% sales tax and that sales tax will go exclusively to after-school and summer programs aimed at youth. And the priority in that money would go to underserved areas of the state, which I think is tremendously important...
"Secondly, there is a 14% excise tax. Thirty percent of the excise tax will go to prevention and to substance misuse programs... We need to build a strong fence around that in the coming year to make sure that money actually does go to those programs. I've already heard from some people [with] concerns about that.
"Then, the remaining 70% goes to the general fund. And then there would be fees on top of that that cover the cost of licensing.”
- Sen. Dick Sears, lead sponsor of S.54
2. What is the role of the Cannabis Control Board the law establishes?
“There is a system of first setting up who the people will be who are going to be on that board. The board itself then has to design a licensure system for everything, literally from seed to sale, and then have priorities that are developed as to who would be recipients of those licenses. And part and parcel of that discussion is listing priorities for who should be entitled to them.
"And I could go on for hours about what the actual obligations of the board are. But...the timeline is very tight. The governor is going to have to do some quick appointing. The Senate is probably going to end up having to confirm people and getting all that done and COVID-19 is going to be an interesting exercise.
"But right now, I would say the vast majority of the pages of this bill have very minutiae details about what this board is going to be doing moving forward.”
- Sen. Joe Benning, a sponsor of S.54
3. Does the law adequately address racial and economic inequities within the cannabis industry?
“So here's the bottom line in terms of the racial piece in this industry. If you don't have land, if you don't have capital, you lose. So that's what this bill fails to address. I'm glad that we're still having those conversations. And let me be clear, the bill does move towards these areas. It does begin that process. And there's an awful lot of it that hangs on the Cannabis Control Board, which obviously doesn't exist, to do so.
"There are a lot of economic decisions that were made that do not rely upon the Cannabis Control Board that are already heading towards implementation. I'm glad that the governor spoke out and did say that the primary concern is that the licensing construct will disproportionately benefit Vermonter's existing medical dispensaries by giving them so access to integrated licenses and unfair head start on the market.
"I think he also goes on to say that, you know, maybe they could be bearing more that burden to address the method in which we go about addressing this whole idea of racial equity.”
-Mark Hughes, coordinator for Vermont Racial Justice Alliance, which is calling for amendments to the law
4. Why does the law ask towns that want to participate in this retail marketplace to opt in, rather than having an opt out provision?
“Well, frankly, the Senate was very much in favor of an opt out provision and that would enable any retailer to come along and establish something unless the town had opted out of the option of having it. And we conceded on that point simply because we recognize the House was committed to having a complete opposite viewpoint from Motown's perspective and that the governor was siding with the house. So we ended up conceding on that point.
"My concern, having conceded on that, is it may be quite some time before a town takes the formal position of saying, yes we're going to have this here. If you are a prospective retailer and you're looking for a place to set up a retail shop, you haven't any idea where in Vermont you can do that right now. And unless and until some town somewhere decides to opt in, that's not going to happen. So there will have to be a formal vote.
"We don't have any idea who's going to vote to do that, whether it will be by petition or whether the town will take it on their own initiative. But I see that as delaying the rollout of this process.”
- Sen. Joe Benning
5. Medical dispensaries will be able to start selling to the public in May of 2022 when newer retail organizations that are just coming online won't be able to until October. So does that favor dispensaries in a way that's unfair?
“It may. And I agree with the Governor that we need to revisit the entire idea there. On the other hand, medical dispensaries will be obviously having their point of view heard in the legislature. But I thought the governor made good points about the integrative licenses and giving them a head start might create an unfair advantage.”
- Sen. Dick Sears
We've closed our comments. Read about ways to get in touch here.