Vermont's retail cannabis marketplace has been open for well over a year. There are now 73 retail stores in operation and roughly 400 licensed growers. Lawmakers this year are considering several bills to update Vermont's cannabis law. And here to discuss them is Vermont Public’s senior political correspondent, Bob Kinzel.
This interview was produced for the ear. We highly recommend listening to the audio. We’ve also provided a transcript, which has been edited for length and clarity.
Jenn Jarecki: So there's one major bill and several smaller ones. Let's start with the big one. What does it do?
Bob Kinzel: Jenn, the key part of the main bill totally changes how the state's medical cannabis program operates. It was 20 years ago that the legislature gave us initial approval to this program. It allows patients with certain serious health conditions to legally use cannabis as part of their treatment. Now, several years ago, there were roughly 5,600 Vermonters registered in this program, and they were able to get their products at a handful of dispensaries around the state.
House Government Operations Chairman Mike McCarthy, who is the lead sponsor of this bill, says the creation of the retail market has changed everything. And that's because many medical patients can now access cannabis products much more conveniently at one of the 73 retail stores. And this has resulted in a 50% drop in the number of people enrolled in the program.
Mike McCarthy: The evolution of a market where if you can buy cannabis as an adult over 21 at a retail location, many of the folks are not renewing their medical registry cards.
Bob Kinzel: Now, Jenn, at the same time, state officials have a strong commitment to continue to serve the needs of the remaining medical cannabis patients, because the program allows them access to higher potency products, and it provides them with other benefits as well.
James Pepper is the chairman of the state's Cannabis Control Board.
James Pepper: There are a number of patients out there, there's a number of Vermonters out there, that desperately need the products and services that are only available at medical dispensaries. Well, if those dispensaries start to close their doors, it's a direct harm to those patients that need either the confidentiality or the high potency products.
Bob Kinzel: So Jenn, with the prospect of some of the few remaining medical dispensaries shutting down, the bill would allow some current retail stores — some of those 73 stores — to apply for what's known as a medical endorsement. And to get this designation, they would have to provide educational programs for the medical patients. And it would also allow these stores to sell the higher potency products that are currently available only to medical patients. But — this is a very important point — these products would not be available to the general public.
Now this situation brings us to the second main part of the bill, which would eliminate all THC potency caps that are currently in place for retail customers.
Jenn Jarecki: Will you explain how that would work, Bob? I mean, are there currently caps on potency for THC levels in products sold at retail stores?
Bob Kinzel: Absolutely, Jenn. There's a 30% THC cap on cannabis flower, and a 60% cap on concentrates. Now, I found out that of the 24 states that have legalized the retail sale of cannabis, two — Vemont and Connecticut — have also implemented potency caps.
Joseph Topolsky is lab manager at Satori in Middlebury. They're the largest indoor cultivation site in the state. And he says there are a number of reasons why lawmakers should do away with these potency caps.
Joseph Topolsky: The removal of potency caps on cannabis concentrates offers a pathway to increase state revenue, market diversification, product authenticity, and enhance safety standards and shutting down the black market, which I can think we all can agree is a good thing.
Bob Kinzel: But Jenn, there is some strong opposition to this plan. Jill Sudhoff-Guerin represents the Vermont Medical Society. She thinks there are some serious health concerns associated with the removal of these caps.
Jill Sudhoff-Guerin: The risks of physical dependence and addiction and psychosis are just indicating that right now we can just hold off and wait, you know, until we have more data, we feel like the public health impact does not support lifting the caps at this time.
Jenn Jarecki: So Bob, how do you think this disagreement over potency caps will be resolved?
Bob Kinzel: Well, Jenn, sponsors of the bill are very concerned that including the elimination of the potency caps could undermine passage of the rest of the bill. So Rep. McCarthy told me he wants to move very slowly on this issue.
Mike McCarthy: And I think for now, that's probably the right policy choice is is to make sure we continue to have those products that are currently being used by medical patients available, but we keep the status quo in terms of the potency caps for the adult use market.
Bob Kinzel: So Jenn, basically under his plan, there would be two potency systems in place, one for retail customers, and another one with higher limits for the medical patients. And with this change, Rep. McCarthy is hoping that his bill will be approved by the legislature this year.
Jenn Jarecki: There's also a bill that deals with a controversial cultivating site in Essex Junction. Can you tell us more about that?
Bob Kinzel: Jenn, this is a fascinating situation. It really is. There's a small licensed cultivator in Essex Junction who grows around 100 plants. He also has around 30 ducks, and he uses the duck manure for his plants and he also sells duck eggs. Now, some neighbors are complaining about a very strong odor from both the cannabis plants and the ducks.
But for the time being, let's put the duck issue aside. Two local lawmakers have introduced a bill that bans cannabis growing sites in densely populated areas like this one. But as Cannabis Control Board Chairman James Pepper testified last week, the bill would represent a major policy change. And that's because lawmakers have designated cannabis growing sites as a farm operation. And that exempts them from most local zoning regulations.
James Pepper: So this sets up a conflict where, you know, the former illegal market were growing in their garages and their cellars in their spare bedrooms. And now that it's legal, they're asking to move outside.
Bob Kinzel: Jenn, I'm getting the impression because it represents such a major policy change, that the committee will want to study this particular bill over the summer.
Jenn Jarecki: Bob, before we go, and as I mentioned at the outset, Vermont's retail cannabis law has been in place for over a year. I mean, in general, how are things going?
Bob Kinzel: Jenn, I think it's doing better than many folks predicted. There are now 73 retail stores with another 11 on the way. There are roughly 400 cultivators now, 80% are known as tier one growers — this means that their growing space is less than 1,000 square feet. That's pretty small. It's about the size of a two-car garage.
So with these numbers, the Cannabis Control Board thinks it's been pretty successful in persuading small growers in the legacy market — the illicit market — to join the legal effort. Sales are larger than expected, they could exceed $150 million in the next year or two. There's a 20% tax on these sales. So that means around $30 million in annual revenue. And a good chunk of this money goes to after school programs and youth drug prevention efforts.
At the same time the state is moving to protect small growers by controlling overall supply. And that's something that many other states have not done. And a massive oversupply from very, very large growers in those states has led to huge price drops, which have put some of the small growers out of business, and Vermont does not want that to happen here.
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