Vermont Becomes Eleventh State to Allow Retail Cannabis

by Doug McClure

MONTPELIER –Governor Phil Scott allowed S. 54, “An act relating to the regulation of cannabis,” to become law on October 7, though he did not sign it. That bill establishes the framework for legal marijuana retail sales.

Separately, Governor Scott signed bill S. 234, which in part ordered the automatic expungement of criminal records for marijuana possession under one ounce prior to January 1, 2021. Public opinion on S. 54 has been divided. Governor Scott said in not signing the bill his concerns were public safety, keeping the product away from children, and inadequate provisions in the bill as written to protect minority communities. His opponent, Lieutenant Governor David Zuckerman, argued that a bill can always be amended. As drafted, S. 54 already contains a lot of areas where aspects of the legislation are not set in stone.

In its justification for the retail market, the legislature wrote “It is the intent of the General Assembly to move as much of the illegal cannabis market as possible into the regulated market for the purposes of consumer protection and public safety. It is also the intent of the General Assembly to encourage participation in the regulated cannabis market by small, local farmers. In furtherance of these goals, the Board shall consider policies to promote small cultivators.”

Retail sales would begin in 2022. Critics, including the Governor, have noted that the bill gives advantageous treatment to the existing five medical marijuana dispensaries. Those dispensaries can begin selling products in May 2022, months before retail operations for new licensees are allowed in October 2022. Others have said the bill should have included provisions to make licensing more affordable for minority-owned businesses. The bill also has a requirement that the Criminal Justice Training Council provide data on equity in traffic stops beginning January 15, 2022.

Among the provisions of the bill is the “opt-in” provision: residents of a municipality must vote by Australian ballot to allow retail cannabis operations. However, municipalities cannot “prohibit the operation of a cannabis establishment within the municipality through an ordinance… or a bylaw.” Towns can also not make the operation of such a business conditional on any provision beyond local control licenses. Voters can later rescind the ability of future businesses to operate within a town, but that vote would not impact legally operating cannabis businesses.

Much of S. 54 regulates the retail end of marijuana similarly to the way alcohol or cigarettes are regulated. It sets an age limit of 21 and restrictions on the percentage of THC for certain products, prohibits flavored products, and prohibits products combining THC with nicotine or alcohol. The bill also proscribes packaging “designed to make the product more appealing to persons under 21 years of age,” and directs the creation of a standardized symbol for cannabis since none exists at present.

Regulatory authority will rest with a Cannabis Control Board, whose members are to be nominated by a Cannabis Control Nominating Committee. That committee would be comprised of members from the executive and legislative branches. The process is slated to take place between November 1 and January 15, despite the logistical problem that during this election every member of the general assembly, as well as the governor, is up for re-election.

The potential economic impacts are unclear. A study by the state Joint Fiscal Office estimated as much as $24 million in revenues from the retail market. A second study by an advocacy group doubled that estimate if Vermont acted sooner, noting that Vermont is not the first New England state to legalize retail marijuana.

Neither Hardwick nor Wolcott’s select board has had in-depth discussions about the potential retail marijuana market.