Gov. Phil Scott on Wednesday allowed a bill that makes significant updates to Vermont’s retail cannabis law to go into effect without his signature.
The retail marketplace has now been in place for almost nine months. Key lawmakers say the changes are needed to reflect the dynamic growth of this industry over that time.
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 actually among several that lawmakers passed this session to help strengthen the state's retail cannabis marketplace. 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 going to be 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 ingredients.
"If we do it well in Vermont, and we 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 of 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 machines, 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 kind of cultivator license. Can you tell us about that?
Sure, it's known as a propagation license. Here's what it allows a person with this license to do: They can grow plants from seeds, and then sell these young plants that are known as clones to another licensed grower.
Vergennes Rep. Matt Birong is one of the bill's co-sponsors. He says this provision will provide an important option for some growers.
"They don't want to take it all the way from seed," Birong said. "They're happy going to purchasing them at the start. That also allows for some of the other indoor or outdoor growers to sell starts to each other so you can help maintain a more consistent supply chain."
Vermont is one of a handful of states to create this type of license. More states are expected to add it in the coming year.
This session lawmakers also decided to replenish the state's Social Equity Business Development Fund. Can you tell us what this program does and why it's so significant?
When the initial law was passed several years ago, this provision was a top priority for a number of 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/or 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, a co-owner of Snowbird Botanicals in Barnet, told me this program was critical to his success.
"We would not have been able to turn the knob if that wasn't the case," he said. "We do agree that Vermont did do a very good job of figuring out the pricing points ... for what everything costs for your licensure here in Vermont. But it still is quite 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 another half a million dollars into this program for next year. The goal is to make this an ongoing annual appropriation in the future.
Vermont adopted a medical cannabis program almost 20 years ago. Did lawmakers make any changes to that system during the recent session?
They definitely did. The new law expands eligibility for this program by making it easier for folks with serious and chronic health conditions to qualify for it.
St. Albans Rep. Michael McCarthy told me that it's critical to maintain these medical dispensaries because they provide special products and important health information to their clients.
"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 just, you know, buy cannabis at a dispensary for adult use on the retail side."
The new law 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 marketplace has gone?
I think they realize there have been some bumps along the road. But remember, they had to create a totally new state infrastructure for this retail market. That was a huge undertaking. So for the most part, 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 oversupply of product because there's so many large industrial growers out there. This has caused the price of many cannabis products to plummet. It's put many small growers in a very precarious financial situation, and some are even returning to the illicit market to sell their products.
Now, to help avoid this problem here, Board Chairman James Pepper says Vermont has suspended the issuance of larger licenses this summer, to ensure that Vermont supply and demand stays in balance. That's being done to protect the state's smaller growers.
"We again have a commitment to having small-scale craft farmers dominate this market, saturate the demand," Pepper said. "We think that that is our engine of innovation. 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 cannabis statewide."
In this first year of operation, the board has licensed over 300 cultivators. The vast majority are those small tier one classifications. At the same time, more than 50 retail stores are now up and operating, and more are on the way.
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