Gov. Phil Scott on Wednesday approved a bill that makes significant updates to Vermont’s retail cannabis laws to go into effect without his signature.
The retail market has now been in place for nearly nine months. Key lawmakers say the changes are necessary to reflect the dynamics of the industry over that period.
Vermont Public’s Jenn Jarecki spoke with Vermont Public’s senior political reporter Bob Kinzel for an update on this legislation. Their conversation below has been edited and condensed for clarity.
Jenn Jarecki: The bill Gov. Scott just allowed to become law is just one of several that lawmakers passed this session to help strengthen the state’s retail marijuana market. Can you break down that legislation for us?
Bob Kinzel: I think one of the most important developments is the creation of a state cannabis testing lab. It’s the first of its kind in the country. It will allow the Cannabis Control Board to randomly test products to ensure that the testing that’s currently being done by one of the independent labs is accurate in terms of potency and other key elements.
“When we do it well in Vermont, and can demonstrate the value, I think every state will have one,” said James Pepper, chairman of the Cannabis Control Board. “The challenge is we have an existing agricultural lab that does all the same compliance testing for every other agricultural product, but they’re not allowed to touch cannabis. They’re not allowed to run cannabis through their equipment, so we had to build our own.”
The goal is to have the new state lab up and operating in January.
In another bill, lawmakers created a new type of cultivator license. Can you tell us about that?
Sure, it’s called a propagation license. Here’s what it allows a person with this license to do: They can grow plants from seed, and then sell these young plants, known as clones, to another licensed grower.
Vergennes Rep. Mike Birong is one of the bill’s co-sponsors. He says this provision will provide an important option for many growers.
“They don’t want to take it all the way from seed,” Birong said. “They’re happy to go and purchase them at the beginning. That also allows some of the other indoor or outdoor farmers to sell starts to each other in order to help maintain a more consistent supply chain.”
Vermont is one of several states to create this type of license. More states are expected to adopt it in the coming year.
This session lawmakers also decided to change the state’s Social Equity Business Development Fund. Can you explain what this program does and why it’s so significant?
When the original legislation was passed several years ago, this provision was a top priority for many lawmakers. That’s because it recognizes that a number of people in the past, particularly people of color, have been disproportionately affected by previous cannabis prohibition laws. Many were arrested, convicted, and incarcerated for cannabis-related offenses. This program provides important technical business assistance to eligible applicants and grants of up to $5,000.
Last summer, Ivan Pudan, the co-owner of Snowbird Botanicals in Barnet, told me this program was crucial to their success.
“We wouldn’t have been able to flip the switch if it wasn’t for that,” he said. “We do agree that Vermont did do a really good job of figuring out the pricing mechanisms… for what everything costs for the licensure in Vermont. But it still is very unattainable for us just based on our budget and what we’re able to do. So thank goodness for the social equity program, quite honestly.”
Jenn, lawmakers put an additional half a million dollars into this program for next year. The goal is to make this an ongoing annual appropriation in the future.
Vermont established its medical marijuana program nearly 20 years ago. Did lawmakers make any changes to that system during the recent session?
They certainly did. The new legislation expands eligibility for this program by making it easier for people with serious and chronic illnesses to qualify for it.
St. Albans Rep. Michael McCarthy told me that it’s critical to maintain these medical dispensaries because they provide specific products and important health information to their patients.
“They are really trained to understand the needs of those Vermonters who participate in that program,” he said. “And it’s a very different set of people than I think the average customer that’s going in to, you know, buy cannabis at a dispensary for adult use on the retail side.”
The new legislation also calls for a two-year study of the medical program to see if other long-term changes might be needed in the future.
We’re approaching one full year in. How do state officials feel the initial rollout of Vermont’s retail cannabis market has gone?
I think they acknowledge that there have been some bumps along the road. For one thing, they had to create an entirely new state infrastructure for this retail market. That was a huge undertaking. So overall, they feel the rollout has gone well.
Now, at the same time, they’re keeping a close eye on what’s happening in other states — particularly California — which is experiencing a huge surplus of product because there are so many large commercial growers there. This has caused the price of some cannabis products to plummet. It’s put some small farmers in a very precarious financial situation, and some are even returning to the illicit market to sell their products.
Now, to help prevent this problem here, Board Chair James Pepper says Vermont has suspended the issuance of larger licenses this summer, to ensure that Vermont supply and demand comes into balance. That’s designed to protect the state’s smaller farmers.
“We again have a commitment to having small-scale craft farmers run this market, meet the demand,” Pepper said. “We think that’s what our engine of innovation is. It’s what sets Vermont apart, and if we’re going to support them, we need to make sure these larger operations aren’t setting the price of marijuana statewide.”
In this first year of operation, the board has licensed over 300 cultivators. The vast majority are small tier one categories. Meanwhile, more than 50 retailers are now up and running, and more are on the way.
