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MARIJUANA MOMENT

Another Vermont House committee OKs bill to legalize marijuana sales

Robert Layman

Marijuana Moment is a wire service assembled by Tom Angell, a marijuana legalization activist and journalist covering marijuana reform nationwide. The views expressed by Angell or Marijuana Moment are neither endorsed by the Globe nor do they reflect the Globe’s views on any subject area.

A push to legalize commercial marijuana sales in Vermont took another step forward Wednesday, with the House Ways and Means Committee voting to advance a bill to license and tax cannabis businesses.

If the legislation, S. 54, becomes law, retail marijuana sales would begin in Vermont in the next two years, and tax revenue to the state could reach a projected $50 million by fiscal year 2024.

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“Today’s vote is another clear indicator that S. 54 enjoys strong momentum in the House,” Matt Simon, New England political director for the advocacy group Marijuana Policy Project, said following the vote. “Vermonters are looking forward to seeing this bill become law in 2020 so the state can begin to reap the many benefits associated with sensible regulation of cannabis.”

The 11-person committee voted 7–3 in favor of the bill, with the vote technically remaining open until later in the day for one supportive lawmaker who was absent from the morning session.

The Vermont Legislature in 2018 legalized low-level marijuana possession and home cultivation, becoming the first US state legislature to do so. But lawmakers at the time stopped short of allowing retail sales or licensing commercial businesses. The Senate approved a commercial cannabis sales measure last year, but it stalled in the House.

The bill, S. 54, is still alive in the two-year session and would create a variety of marijuana business licenses, establish a government agency to oversee the new industry, and set tax rates on legal sales. The bill would also set limits on product potency, capping THC in cannabis flower at 30 percent THC and limiting concentrates to 60 percent THC.

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Passage of the bill would more closely align Vermont with other legal cannabis states, such as Massachusetts and Colorado, where adults 21 and older can purchase legal, lab-tested products from state-licensed stores.

As part of Wednesday’s committee action, lawmakers adopted amendments that revised the bill’s planned tax rate, increasing it from a proposed 16 percent sales tax to a 20 percent combined rate that consists of 14 percent excise tax and 6 percent sales tax.

“We sort of found that 20 percent, which is what Massachusetts does, is a good place to land,” Representative Janet Ancel, the committee chair, told VTDigger after the vote. “I think there might be some tolerance for being a little higher than that, but not much.”

Under the new tax structure, Vermont is projected to see marijuana revenues ramp up quickly after legal sales kick off. Estimated revenue for fiscal year 2022 is just $1.3 million, but that increases to $30.1 million in fiscal 2023, $50.9 million in 2024, and $63.8 in 2025.

The tax provisions include some limitations. Registered medical marijuana patients would be exempt from state taxes, and municipal governments would be prohibited from adding their own new local taxes on cannabis.

With the successful Ways and Means Committee vote, the measure now heads to another panel, the House Appropriations Committee, before heading to the full House for a vote. Because the Senate approved an earlier version of the legislation last year, differences between the chambers’ proposals would need to be ironed out before a final measure is sent to the governor’s desk.

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Governor Phil Scott initially opposed retail cannabis sales, but a top Democrat in the House said that he’s recently warmed to the proposal and has been “at the table” in ongoing discussions about specific provisions. An administration official said last month that the governor was considering using tax revenue from marijuana sales to fund a proposed after-school program.

Read the story on Marijuana Moment.