Vermont House Advances Bill to Regulate and Tax Cannabis Sales

The Vermont House of Representatives formally approved S. 54 on Thursday, advancing a bill that would set up a taxed-and-regulated marketplace for adult-use cannabis. The state bill now returns to the Senate, where an earlier version passed on a 23-5 vote.

Vermont legalized cannabis in 2018, but it has not yet formally developed the regulatory infrastructure needed for adult-use retail sales. According to a recent poll conducted by Public Policy Polling and commissioned by the Marijuana Policy Project, 76% of Vermont residents support a tax-and-regulate market structure for consumers who’d like to purchase cannabis.

Shayne Lynn is the founder and executive director of Champlain Valley Dispensary, a born-and-bred Vermont resident who’s been advocating for this sort of legislation going back at least 10 years. He cheered the state’s decision to legalize cannabis in 2018, but what he’s seen since then tells him that the time is now is move forward with more concrete reforms. Other states have gone on to kickstart adult-use sales (Massachusetts, Michigan, Illinois), and, in the fall of 2019, a vape-related health scare raised alarms over the untested cannabis marketplace.

“I think people really understand that the legacy market has some real challenges to it that can be deadly,” Lynn said. “So, how does Vermont get ahead of that and create a regulated program? The momentum is there.”

Both chambers have clearly expressed interest in getting this bill passed. Gov. Phil Scott, a Republican, has pushed back on previous conversations around legal cannabis, insisting that he needs guarantees to fund a state after-school program (via cannabis tax dollars), a provision that’s been added into the current bill. Scott’s other sticking point is roadside safety and law enforcement’s wish to perform saliva tests on drivers without a warrant (an amendment that was shot down during the Thursday hearing in the House).

READ MORE: The Marijuana Policy Project has published a detailed summary of the Vermont legislation 

If this bill were to pass, current medical cannabis license holders would get priority in applying for adult-use licenses. Those medical cannabis license holders would also get a six-month head start on the market. During that time, Lynn pointed out, the state would begin to issue licenses to small craft growers, who may then sell into the established dispensaries.

The state’s medical cannabis market includes only five vertically integrated licenses, and Champlain Valley holds two of those. (The other three are held by subsidiaries of Curaleaf and iAnthus).

At its zenith, Lynn said, the state’s medical cannabis market clocked 5,700 registered patients. That number has fallen to “less than 4,700,” he said, referencing the jittery reaction to vape products last year.

“We’ve seen a decline of over 1,000 patients on our registry over the past year,” Lynn said. “That’s really influenced our business, and that’s why we’re looking to S. 54 to create the future market. We want to sustain the medical market.”

Even zooming out to a broader adult-use market, Vermont’s population is only 626,000 (as of 2018). The pool of prospective small businesses and consumers is limited, and Massachusetts’ dispensaries are just a short drive down the road. Lynn said that the provisions in S. 54 would make a very vocal statement of support to the business community in Vermont.

Part of this legislation, on both the adult-use and medical sides, is a maintenance matter. Cannabis is so new in each of its U.S. jurisdictions that regular legislative tuning is required. S. 54 represents not only a step forward in the state economy, but a recognition that the task completed in 2018 isn’t done. Cannabis is a work in progress.

“Statehouses do have to be ready, [because] the industry is going to come back year after year now,” he said. “This is a new industry, and you’ve got to adapt and adjust. It has to be managed.”