Vermont Legislature SmartTranscripts:

[James Pepper (Chair, Vermont Cannabis Control Board)]: Know, cannabis is a really complicated topic and hemp further complicates things. So happy to be here to talk about what's happening in the miscellaneous agriculture bill and give you a sense of what's happening in

[Rep. Charles "Charlie" Kimbell (Chair)]: the market. Great. Thank you. Alright. Well, we we don't have that bill yet. We, I think, expect that it may pass out of the other body today, then we'll have it in short order. But in the meantime, we thought it would just be very helpful to have some background. That's great. It is an unusual situation for a couple of reasons.

[James Pepper (Chair, Vermont Cannabis Control Board)]: And if you'd like me to get started, I'm happy to. I have a very rudimentary PowerPoint only because sometimes it's really important to be able to see these products and see some of these definitions and see kind of what this what we're talking about here. It helps kind of clarify what's going on. So I will share my screen if that's all right. So we're gonna just talk about some of the evolution of hemp regulation. I did go back and watch Brad the gentleman's testimony about the miscellaneous agriculture bill and Steve Collier's testimony about hemp. They did a really excellent job. I'll try not to be too repetitive. And I'm gonna, we always have to start, I always have to start with the notion that cannabis is one plant with two different names and two different legal statuses. Have marijuana, which as it's defined in the Controlled Substance Act, and then you have hemp, but it's both one plant, the cannabis sativa plant, and the difference between the two is all depending on how much THC is in the plant when it's harvested. So Controlled Substance Act, this was passed in 1970. The purpose of it is to place various substances into one of five categories, depending on, there's a threshold question, does that medical use? If the answer is no, it's a schedule one drug. If the answer is yes, then it's schedule two through five, and depending, and it's two through five, depending on its abuse profile, it gonna cause physiological dependence? And marijuana was placed on schedule one, which is the most controlled category, highest criminal penalties, no accepted medical uses, no ability to get it with a prescription, for instance. And it's on the list with heroin and LSD and methamphetamines, or sorry, ecstasy. You can see that from a controlled substances perspective, from the federal government's perspective, it's more dangerous than cocaine, more dangerous than oxycontin, more dangerous than fentanyl. But in around twenty fourteen, twenty fifteen, there was a lot of interest in growing hemp, which has been an agricultural commodity for hundreds of years, fires and controlled substance act, or prior to the Marijuana Tax Act, to grow hemp for industrial purposes, to grow it for oils, hemp seed oil, to grow it for fiber and to grow it for CBD. And so I'm going to skip over some of the very early history of hemp, but go towards the 2018 Farm Bill, the Agriculture Improvement Act. And in response to this desire to grow hemp for non intoxicating purposes, the federal government created a legal fiction, a legal distinction between hemp and marijuana. So marijuana, well, I should say hemp, has virtually no THC. They created a definition that says that when you harvest it, it can't have more than 0.3% THC on a dry weight basis. And that's because when you're growing cannabis, there's always gonna be some amount of THC in it, but this is supposed to be a trivial amount, virtually no THC. And then everything above this is marijuana controlled, schedule one controlled substance. There was a lot, Vermont developed a pilot program to grow hemp. There was a lot of interest nationwide to grow hemp. And I think what a lot of people found is, or a hemp grower sound, is that the market for hemp and CBD did not match the enthusiasm of the growers. And so what happened was people were sitting on huge amounts of hemp, raw biomass. And they started looking at that definition of hemp again, and finding ways to convert their hemp into products that had more of a market value. And so there's three major loopholes. I call them loopholes, but it's kind of within the definition that was used. The first one is the 0.3% loophole. No more than 0.3% delta nine on a dry weight basis, that's the definition of hemp. That makes sense in a plant, but when you start talking about hemp infused products, you can manipulate the serving size, the weight of the product, the more the product itself weighs, the more THC, hemp derived THC, you can put into it and still be theoretically compliant with the hemp definition. So this is a picture of a bar, candy bar that's in interstate commerce, ship it through the mail, no agitating, no regulatory oversight. This is a 50 gram chocolate bar and you can have one hundred and fifty milligrams of Delta nine THC and still be within that 0.3% ratio. And I use this example because in the adult use cannabis market, we have a per package limit of one hundred milligrams of THC. So this product, even if it was made by a cannabis manufacturer, would be illegal in Vermont. But because it's hemp, the theory is that you can ship this through the male cell to kids, do whatever, there's no regulation. So that's the one loophole that we're seeing. The other one is this THCA loophole and I know this is a little bit kind of complicated, but THCA is a precursor to THC. When THCA, which exists in the cannabis plant, is burned, decarboxylated, it converts to the intoxicating delta-nine THC. So what we're seeing is people saying, well the definition of hemp is all about delta-nine THC, not THCA. So you can have a joint, which for all intents and purposes is marijuana until it's burned, but it's all intents and purposes marijuana. But the claim is it's hemp and it's US Farm Bureau compliant because it's less than 0.3 Delta nine THC, but once you burn it, it's just as intoxicating as a marijuana joint. So this is just a problem with the definition in the farm bill which only focused on Delta nine THC. And again, these are popping up in grocery store, I mean, convenience stores, gas stations, industry, elsewhere can be shipped through the mail. They say US Farm Bill compliant on them. There's a lot of confusion about these types of products.

[Rep. Charles "Charlie" Kimbell (Chair)]: And it's being sold as hemp.

[James Pepper (Chair, Vermont Cannabis Control Board)]: Being sold as hemp, right. Well, premium hemp. And then the derivatives loophole, if you go back and remember, hemp included Delta nine THC or its derivatives. And many businesses are taking CBD, extracting out all the CBD from hemp and chemically converting it usually with some sort of hydrochloric acid, some sort of chemical. And you can convert it, you can make the same molecules as delta-nine THC or some of these other intoxicating molecules that aren't covered in the farm bill definition, like delta-eight, THCO, HHC. THCP is considered 30 times more psychoactive than Delta nine THC that can be created synthesized from CBD. But because the Farm Bill only focused on Delta nine THC, these products theoretically exist in some kind of gray area. Since 2018, a major interstate market has evolved using these three loopholes. You got Willie Nelson, you've got Snoop Dogg, you've got Seth Rogen, Cheech and Chong, even edible arrangements will deliver hemp infused products along with their kind of fruit deliveries to wherever. And these cross state lines unlike cannabis, they're not taxed at 14% like cannabis is, they're not subject to any of the state regulatory frameworks around testing, labeling, age gating, anything that we're doing on the cannabis side.

[Rep. Charles "Charlie" Kimbell (Chair)]: These markets all developed post 2018. That's right. I feel like CBD in products that one could get on the store shelf was earlier than that. Is that

[James Pepper (Chair, Vermont Cannabis Control Board)]: not right? Those products are much more closer to what the intent of the Farm Bill was. These are the full spectrum CBD products. You're just taking the hemp plant that comes in at 0.3%, taking out all the biomass and what you're left with is a blend, a CBD dominant blend of, but it's full spectrum. It has all the cannabinoids that were in there, but of course the THC is trivial, trivial amount of THC in those types of products. So these, as you can see, are specifically trying to market the THC, although they're hemp product, they're cannabis products masquerading as hemp products. The reason I put these up there, the Willie Nelson Snoop Dogg, because if you look, all of these would be illegal in the cannabis market because they have more per serving amounts of THC than we allow in the adult use market, you know, that are statutorily required. Representative Lipsky.

[Rep. Jed Lipsky (Clerk)]: When it says dog treats, that's just because the guy's nickname is dog, those aren't for pets.

[James Pepper (Chair, Vermont Cannabis Control Board)]: No. They're not. There is a there are quite a few CBD products for pets, but no, these are intended for human consumption.

[Rep. John L. Bartholomew (Vice Chair)]: Representative Bartholomew. There any effort federally to update the definition to close the loopholes? You've anticipated a future slide. Okay. Yes.

[James Pepper (Chair, Vermont Cannabis Control Board)]: Can tell you that between 2018 and now, the only sort of federal enforcement of this is the DEA has sent out a few letters for very deceptive copycat products, the FDA and the DEA send out. So these are all hemp infused products that contain THC that look like, very confusing with actual products, very much appealing to youth, then we wouldn't allow that. These are not allowed in the adult use market. We don't have any products that look like popular stuffs, that could be confused or popular food stuffs or are appealing to youth. But that's the extent of the enforcement that we've seen from the federal government on this stuff. FDA said, no, THC and CBD and cannabinoids are not suitable for interstate commerce, we can never enforce that judgment. The DEA has said that these products are illegal, but we don't have the enforcement to bundle it.

[Rep. Charles "Charlie" Kimbell (Chair)]: So that product in the second from the left in the bottom is not in the Bisco product?

[James Pepper (Chair, Vermont Cannabis Control Board)]: None of these are, these are all copycats. Yeah, these are all not from the company says

[Rep. Jed Lipsky (Clerk)]: garbage scum.

[Rep. Charles "Charlie" Kimbell (Chair)]: Yeah, so it's intentionally trying to, Right. Yeah, and frame it up.

[James Pepper (Chair, Vermont Cannabis Control Board)]: But this says five hundred mg, Th, right, THC. And that's the Delta nine THC of which we have a hundred milligram per package limit on the adult use side. So this would be, even if it wasn't copycatting Oreos, this would be an illegal product if it was cannabis. So 07/17/2025, Mitch McConnell, was the original author of that definition of hemp and the original kind of the godfather of the hemp farm bill provisions came out and said that these are Frankenstein products that we never intended, and we need to close the loop. And that was kind of a shock to everyone because he was the one that really advocated for the hemp definition. And then in the bill that reopened the federal government in November 2025, in a kind of last minute decision, the federal government closed all of these hemp loopholes. It was really shocking because this is something that cannabis regulators have been complaining about for a while and just saying, why is this disparate treatment kind of now? And our whole job is to have oversight over the products that people are using and consuming the contained THC. And yet, there's this wide open market that's operating without any oversight. So what that bill did was it took care of that THC limit. So it left the 0.3% on a dry weight basis, but it also included any of the THCA. So it shut down that joint that's THCA only, it shut that down. On the container limit, the serving size limit increasing the weight of the products, so you can include more THC. Said no, any product, the final package can only have zero point four milligrams total THC per container. So all that Nabisco thing that had five hundred milligrams now can only have zero point four, zero point four milligrams. And then it shut down all the synthetics. Anything that's manufactured outside of the cannabis plant is schedule one. It's just, it's marijuana, it's not happening. So that really closed down all of the major loopholes, but there's a delayed effective date by one year. And so we actually don't know whether this is gonna go into effect or not, because there are quite, as you can imagine, with the kind of people that are involved in this, corporations that are involved, there's a lot of advocacy, a lot of lobbying at the federal level to change this. Does the

[Rep. Charles "Charlie" Kimbell (Chair)]: Canvas Control Board have a position on that, on those changes that are effective this coming November? Well, it levels the playing field.

[James Pepper (Chair, Vermont Cannabis Control Board)]: If you're making products out of a, contain THC, you really shouldn't be using the one plant that's not supposed to have any THC in it. What it does is all those products from a federal standpoint will now be considered cannabis products and will be just as illegal at the federal level as our adult use market is. So it essentially just helps to level the playing field between cannabis cultivators, cannabis manufacturers, and pet manufacturers.

[Rep. Charles "Charlie" Kimbell (Chair)]: Does the zero point four milligrams maximum limit have some basis in anything other than an arbitrary number?

[James Pepper (Chair, Vermont Cannabis Control Board)]: It is arbitrary. I believe that it's meant to accommodate the fact that if you're making a CBD product, just like that kind of tinctures that really are primarily CBD, there's gonna be some amount of THC in them. So it's trying to make sure that they're not fully eliminating those full spectrum hemp products, but all of these numbers are somewhat arbitrary. So this increase in medical marijuana, cannabidiol research, cannabidiol is CBD. So this is an executive order that President Trump signed in December after the passage of this farm bill. The main kind of headline from that executive order was he's directing his attorney general to reschedule candidates from schedule one to schedule three. But the main meat of that executive order was really around that kind of hemp closure and trying to find a path forward. So he's directing his staff and Congress to work together to create a definition of, to develop a hemp derived cannabinoid framework, including an upper limit on the number of milligrams of THC per serving. We haven't seen a lot of action come from this, but it is a indication that Congress may be working on a fix, a fix to the fix that accommodates full spectrum products, maybe says something along the lines of, well, hemp product can have up to one point five milligrams and still be considered a hemp product. We don't know what's gonna come of this again, but we're hurtling towards November when this hemp change is either gonna take effect or not. And we just get little signals here and there from the federal government that things like this, is something gonna change? We don't know. But that puts a lot of Vermont hemp producers in a very challenging position. So you got a lot of this from Steve Collier, but I'll just say that in 2018, you passed a law that said that the Secretary of Agriculture shall establish a pilot program for hemp. Had one operating, but they formally went into rulemaking. This is posted, you can click on and see all the rules for hemp processors. In 2022, when the cannabis world was fully kind of established and set up, the agency of agriculture abandoned their hemp program. You changed the shall, the legislature changed the shall to a may, so they no longer or had to maintain a hemp pilot program. So they kind of wound it down and at the same time you on the legislature shifted regulation just over hemp products to the cannabis control. And so what we did in the cannabis control board in order, we didn't wanna touch the full spectrum CBD products, non intoxicating ones. So we created thresholds to what differentiates a hemp product from a cannabis product. And if you're essentially, if it's got more than one point five milligrams THC per serving, or more than ten milligrams total per package, or if it's marketed, it's direct market appeal is that it's an intoxicating THC product, then this is now a cannabis product. Regardless of what the source material was, it is a cannabis product for now and forevermore. And it can only be subject to all state regulations around testing, inventory tracking, age gating, not appealing to youth. And anything below these thresholds, it's unregulated hemp products. I mean, theoretically it's regulated by the FDA, but they really don't do much. That is something we did through rule. You guys ultimately in 2022 put it into statute as well. So this is the state difference between a hemp product and a cannabis product. Motivation behind what's in the Miscellaneous Agriculture Bureau is that the people in Vermont that are manufacturing hemp into hemp products currently have no regulatory home. They used to get registered with the agency of agriculture. That program wound down. They need some acknowledgement from some kind of state agency that they're a legitimate business, they're a hemp business, not a marijuana business. And that will enable them to enter into contracts with other businesses, get banking, get insurance, just have some proof that they're a legitimate business that can operate interstate as opposed to a cannabis business, which has all sorts of restrictions that come along with it. So that's really the motivation. I think what you'll see when you get the bill, it passes the way, I mean, passed second reading yesterday, it's on third reading today, there's very little debate or controversy on the floor about the hemp provisions, because it's really not controversial, in my opinion. What it does is it almost directly copies and pastes what was in Title VI around the authorization you gave the agency of agriculture in 2018 around hemp, and moves it over to Title VII where the cannabis statutes are, the statutes that control our board. And it has minor updates to ensure that what we didn't know about the evolution of this market in 2018 are accommodated in the, if this bill were passed, how we form a hemp program that can't control board. And so these are the types of things that are addressed in the new legislation that leaves a lot of this up to rulemaking at the board, but how are we gonna handle hemp products that contain more than zero point four milligrams of THC per package? Are we gonna, the federal government would have to allow essentially a workaround to allow interstate commerce of these products between two states where the both states, the sending state and receiving states feel like they're legal. So that's a little bit of a complication. That's what they do right now with the cannabis markets. They just have kind of an understanding that if you have a well regulated market, they're gonna be deprioritized for prosecution. So they would have if, but anyway, complicated stuff, but what sort of testing, taxing, safety standards are we gonna require at the CCB for out of state products that fall between that zero point four and one point five? Hemp be processed at cannabis manufacturing facilities? And that's kind of a big deal because we have a lot, we have a few hemp growers in the state still. If they want to process hemp, there's not a lot of hemp processing equipment because a lot of the hemp processors are now cannabis processors. But there's obviously a little bit of a heightened risk if you're bringing a bunch of non seed to sale tract hemp into the same facility where you have a very strictly seed to sale tract cannabis, but the end product, that distillate that you're making is somewhat indistinguishable and we can't, tests don't know, when we test cannabis, we don't know if that delta minus or 10 was from cannabis. If the cannabis board is permitted, it's going to permit cannabis manufacturers to process hemp at the same facility that they're processing marijuana. We need to set up, we need to require SOPs tracking to make sure that those two products are not intermingled.

[Rep. John L. Bartholomew (Vice Chair)]: James, just on that first question, how does the world of sort

[Rep. John O'Brien]: of internet sales work both with hemp products with all these different levels of THC in it?

[James Pepper (Chair, Vermont Cannabis Control Board)]: As it stands right now, there is widespread internet sales going on, all those products that I displayed earlier on, you can order online, having delivered to your door, no, I mean, sometimes they ask, are you 21? But there's no one checking. So of the more reputable companies ask what state it's delivering to and they won't deliver to states where they've banned THC products, hemp derived or cannabis derived otherwise, but really the internet's wide open for these types

[Rep. John O'Brien]: of sales. And THC is, that's a no go, like can I buy THC dummies from Colorado?

[James Pepper (Chair, Vermont Cannabis Control Board)]: Yeah. I can

[Rep. John O'Brien]: have been delivered here.

[James Pepper (Chair, Vermont Cannabis Control Board)]: As long as they're theoretically hemp derived, yes. So how to handle the possession and transfer of hemp intermediaries? So I know this is really complicated and just cut me off, this is too much in details, but once you process, if you're a hemp manufacturer, and you don't wanna be known as a cannabis manufacturer for banking insurance or other reasons. Once you've created that THC distillate or isolate, it's above the 0.3%, consider it a cannabis product, how do you transfer that to another hemp processor without kind of violating our cannabis laws? So we just have to deal with how the transfers of hemp intermediaries are going to be regulated to make sure that they're just staying on the hemp lane and not crossing the canopy. What sort of testing, labeling, safety standards apply to hemp products intended for human consumption? This is really just how are we gonna age gate these things? I guess that's the last one here, but are we gonna require the same standards around testing and labeling you require for painless products? Are there products or additives that should not be, or should be prohibited? I mean, we, for instance, don't allow caffeine in cannabis products. We don't allow artificial flavors, cannabis products, should those same restrictions apply to hemp. And then are we gonna age these? If your product contains more than zero point four percent milligrams or less than one point five, do these needs be 21 plus? All of these are authorized in rule making for the board in the three twenty three Missile and Zag Bill. I know that that sometimes gives people some pause. I can tell you that the benefit of what we have in 03/23, especially because it's mostly a shift, is that we have an existing hemp rule from the agency of agriculture. It's not a defense, but we have it. It worked well for the hemp industry. And so we can use that as the basis of our temporal. Some of these more nuanced questions will have to work out through the rulemaking process. I know sometimes that gives industry and legislators some hesitation in so much as electric rulemaking. I can say that, even if we got started on July 1, by the time we have a rule that's ready for ICAR filing with the Secretary of State, you guys will likely be back in session and we'll have an opportunity to take a look at what we've done. And obviously, L. R. Have to approve anything we can do. So that's my primer on hemp. I know it's really complicated and it's just, the hemp market has just taken a kind of turn from where, I think where the original intent was to create kind of full spectrum CBD products towards really focusing on making THC products. And I will stop sharing

[Rep. Charles "Charlie" Kimbell (Chair)]: the screen. Okay, well actually, would you mind leaving it up just because, and I know that everybody has it available and I had a couple of questions we might wanna go back to earlier slides on, But representative Basil?

[Rep. Michelle Bos-Lun]: Yeah. Just a quick question related to representative O'Brien's. But is there anything that we can do to control the input of goods from other states to Vermont that we don't want to be here? Because like, we've talked about that with other issues like rodenticides or whatever, like, what can we do as a state to control which goods come into our borders?

[James Pepper (Chair, Vermont Cannabis Control Board)]: Yeah, a great question and that's one thing that's somewhat, of the things that are controversial in the bill, that is one of the controversial ones. We've added a product registration fee and a product registration process which we currently have for the cannabis board, for cannabis products. So before a product ever touches the adult use market, it has to be registered with the board where we look for compliance with all of our packaging, labeling and testing requirements, so to make sure that they're not appealing to youth and all the kind of regulatory compliance. And we're gonna, the bill contemplates doing that for all hemp products that are being sold in Vermont. And so that will be the process for anyone, the Seth Rowland or Snoop Dogg wants to sell their products in Vermont, they have to register it and we'll look for compliance. If it is, if we decide at the board that it's particularly appealing to youth or not, or it's got too much THC in it and it's actually a cannabis product, then it won't be registered and then it'll be illegal. What comes next is always the toughest part because regulating online sales is always challenging. The more reputable companies, I think, understand the legal risk and don't want to kind of just to sell a few additional products in Vermont, won't do it for some of those less reputable, the copycat products, they'll probably try to continue the online sales. We're in some conversations with the Attorney General's office about adding illegal products to the delivery sales ban they have for tobacco and alcohol currently. That just allows when you send a cease and desist letter to a company, because that's what we would do normally, It adds a little bit of teeth to it, but it ends, we're talking to them about that.

[Rep. Michelle Bos-Lun]: So basically what we can do right now is write to the company and say, hey, it's illegal, you can't sell anything to And people in then we just hope that they do it. There isn't any way to actually assess once something comes through the mail and lands in a post office here before it's distributed or something like that. There's no way to know.

[James Pepper (Chair, Vermont Cannabis Control Board)]: Not really for the direct to consumer ones, but know, Kate the Bill, I mean, the Bill gives us authority over where these products can be sold on the retail shelf. Yeah. And I, you know, it just doesn't, I just don't think like in healthy living or a co op or whatever, or even the distributors that are bringing, carrying those products around, wanna be dealing with what we, the board considers illegal products. We would, It's hard to do the direct to consumer online sale, but as far as where they're appearing in retail stores, we've been very successful in talking to people about those. Thank you.

[Rep. Charles "Charlie" Kimbell (Chair)]: Okay, Brett Bollie.

[Rep. John L. Bartholomew (Vice Chair)]: I'm wondering on these copycat products, are there lawsuits for trademark infringements? I mean, it seems like they're so blatant copies.

[James Pepper (Chair, Vermont Cannabis Control Board)]: I don't know the answer to that, I would assume so, but these are companies, the people that are making these probably just disband their business and reincorporate as a different business immediately. It's just like, these are the ones, I had these up here, every single one of these has gotten a letter from the FDA saying these products are illegal. But there's again, what's next in the enforcement? Nothing. There's nothing to back that up.

[Rep. John L. Bartholomew (Vice Chair)]: When people buy these products, are they buying them knowing they're getting THC or are they going to people who think they're getting corn chips?

[James Pepper (Chair, Vermont Cannabis Control Board)]: I would say it's a mix of both. I mean, we hear a lot about the kind of accidental exposures to cannabis products and I think a fair amount of it comes from these types of copycat products, where you might buy this, bring it home because you wanna take a cannabis products, but your kid who is looking at this might be confused and think that this is a typical, this is a Oreo, it's not a snowy oak. So, you know, it's certainly a mix.

[Rep. John L. Bartholomew (Vice Chair)]: And in terms of pricing, I'm assuming that they can't sell this stuff for the same price as an Oreo or a Dorito or, so wouldn't wouldn't the price be like, why would I buy this by mistake? Well But I don't maybe it is good. Couldn't the price be pretty high for these?

[James Pepper (Chair, Vermont Cannabis Control Board)]: I I actually don't think so. I mean, I told you how much hemp was growing and is currently being grown and you can convert THC from CBD. So the reason why cannabis is so expensive is because, well, the license to grow cannabis is expensive and the regulatory burden is expensive and the child resistant packaging is expensive and your banking and insurance are three times as much as regular insurance banking. People that are making these types of products have none of those costs. They don't have to test their products. So their overhead is probably a lot less than the cannabis products.

[Rep. John L. Bartholomew (Vice Chair)]: I did have one other time. Yeah, go ahead. I've asked this with a few people and I'm just wondering about terminology. How you distinguish cannabis is the same plant. So you have hemp and you've got this other stuff. Most people are saying cannabis meaning all of it, but distinguishing you're using marijuana, which has fallen from favor. So what are we supposed to call it? A psychoactive Right,

[James Pepper (Chair, Vermont Cannabis Control Board)]: this is why this conversation in particular is very confusing and why I feel like I have to use marijuana and hemp when I talk about these two different issues, because really I should be saying low THC cannabis and high THC cannabis, but because this conversation becomes very confusing. If I start doing that or talking about cannabis, have to use marijuana. And again, marijuana, it's got some pejorative undertones. It of course was the history of why it's known as marijuana, especially in controlled substance use, has some history to it. So in 2018, the legislature also changed all the references to marijuana in our criminal statutes to cannabis, but it just further complicates the issue because cannabis, marijuana and hemp are both cannabis. This federal. Yes. Here, this is the, right, but where the kind of legal fiction, if there is a fiction between hemp and cannabis came from.

[Rep. John L. Bartholomew (Vice Chair)]: Just wanna bring up a very good explanation in the book Chasing the Stream, which I'm sure you know of why it started being called marijuana in the first place.

[James Pepper (Chair, Vermont Cannabis Control Board)]: Yep, yep. And if anyone wants to do a deep dive in the history of marijuana and cannabis, I just did a continuing adult education and two hour seminar on cannabis that was recorded and assigned to YouTube for the Usher Lifelong Learning Institute. If anyone wants to hear about it, you may want to ask. Ask live? Yeah, I did.

[Rep. Jed Lipsky (Clerk)]: Not so where did you go?

[James Pepper (Chair, Vermont Cannabis Control Board)]: No, it was at the chapel in the College of Fine Arts, but it goes into the deep history of cannabis, hair and insulin, marijuana tax act. Yeah, sure, absolutely, yeah.

[Rep. Charles "Charlie" Kimbell (Chair)]: Send it to the committee assistant, sure, Patricia can circulate it that, go ahead, Representative O'Brien. I just wondered, in this

[Rep. John O'Brien]: sort of spectrum of hemp products, starting with sort of non edible products at the federal level, but then in the middle of it all say is like, oh, my cat's on CBD from anxiety. It's the federal government that said these things are, we need to regulate the THC and if you're making hemp free, it doesn't matter how much THC

[James Pepper (Chair, Vermont Cannabis Control Board)]: Right, exactly. There's a strong focus on

[Rep. John L. Bartholomew (Vice Chair)]: you

[James Pepper (Chair, Vermont Cannabis Control Board)]: know, products that are intended for human consumption versus industrial purposes.

[Rep. John O'Brien]: And then where do pets fall?

[James Pepper (Chair, Vermont Cannabis Control Board)]: About that matter? I think the pets, I mean, as long as the per package, whether it's for a pet or for a human is less than zero point four milligrams per package, which it should be for most of these dog treats or cat treats, be fine, would be okay. And I think what we're most focused on cannabis control board are not those products that are meant for, I mean, the ones that we would focus on, the ones intended for human consumption.

[Rep. John L. Bartholomew (Vice Chair)]: So

[Rep. Charles "Charlie" Kimbell (Chair)]: legislation proposes that the cannabis control board create some rules. And as you mentioned, the agency of agriculture had in the past created rules. So there'd be there's a template of sorts. And you probably explained this or one of the other folks in testimony last week may have explained it, but we're doing this, we're being asked to do this, the legislature's being asked to do this. Because of what happened federally in November, or would it have been necessary or useful to have it anyway?

[James Pepper (Chair, Vermont Cannabis Control Board)]: It's a great question. The impetus for doing this came before November. A number of legislators went out to some of our hemp growers and processors, and they're very reputable above board business. They tell us exactly what they're doing. They're not making intoxicating products. They're holding themselves to cannabis regulatory testing requirements already. They just don't have anyone that they can register with currently. No one's authorized, statutorily authorized to just acknowledge or license them or register them. Is that because the agency, was the ag agency at one point authorized and they stopped? Yes, and that is, you can see in 2022, you turned to Shao to Lamoille and then they ended their hemp program. So they no longer had the ability to register that. And that's what the hemp processors in the state were seeking. It's just some acknowledgement that they are from the state government, that they are a legitimate hemp company, not a cannabis company for the purposes, banking, insurance, and entering into contracts with distributors. They've been

[Rep. Charles "Charlie" Kimbell (Chair)]: in this limbo for four years essentially. Essentially, yes. So Representative Lipsky?

[Rep. Jed Lipsky (Clerk)]: Yeah. Charlie, it's really a question for you.

[James Pepper (Chair, Vermont Cannabis Control Board)]: Would that mean that it would

[Rep. Jed Lipsky (Clerk)]: be prudent for us to invite the agency of AG in to discuss, you know, why they dropped Well,

[Rep. Charles "Charlie" Kimbell (Chair)]: it would definitely be prudent and we will invite them to go once we have the bill. And I think Steve Collier may have given us some testimony last week addressing this same question, but we'll have them back in any case. But it does look like they didn't arbitrarily make this decision. The legislature through this Act one seventy four, told them that they had the authority to stop regulating, and they chose to.

[Rep. Jed Lipsky (Clerk)]: I think historically, there was a market collapse, and a lot of Vermont farmers lost a lot of money. And maybe that was in impetus for them to

[Rep. Charles "Charlie" Kimbell (Chair)]: maybe the agency to Can you speak more to that?

[James Pepper (Chair, Vermont Cannabis Control Board)]: There absolutely was. I think that collapse is what led to the people making these types of products, because people were sitting on a huge amount of hemp biomass and realizing that the CBD market or the industrial hemp market, the hemp concrete market, the hemp seed oil just wasn't as big as, it didn't match the amount of supply in hemp that they had. So these types of products, people started harvesting out just the THC from hemp, even though it's supposed to have virtually no THC and putting it into products and saying that they're Farm Bill compliant. I always just want to kind of reiterate that the and processors that are in Vermont that are operating are all very much above board. They're certainly not these types of folks. They're all telling us exactly what they're doing, where they're sourcing their material. They just don't have a regulatory foam right now. Lot of the impetus for this wasn't something that we were asking for to the cannabis board. We already have some amount of control over the products state, but those businesses need some acknowledgement that they're a hemp business, and right now they don't have that. Whether there is a hemp market at all after this takes effect on 11/12/2026 is an open question. And I think what's important about what's in the miscellaneous agriculture is it offers a very flexible pathway for us to accommodate whether this is gonna be purely an intrastate market or whether there's gonna be interstate commerce of low THC hemp products. Whether there will be interstate commerce. Interstate, whether this is just, I mean, if this goes into effect, people that are producing hemp products with more than zero point four milligrams from a federal government perspective, whether it's hemp or marijuana, they're gonna be considered marijuana companies, any illegal marijuana companies and the products will not be able to cross state lines. So what we don't know is, are the hemp producers in Vermont? Do they have enough of a market to survive if we have kind of an iron curtain around our border with respect to these products?

[Rep. Charles "Charlie" Kimbell (Chair)]: I'm looking at the second paragraph there, the last sentence, including many non intoxicating CBD items that contain trace amounts of THC. So that suggests that there are some non intoxicating CBD items that would still qualify for interstate commerce because they're under Right, dog treats,

[James Pepper (Chair, Vermont Cannabis Control Board)]: if it's purely just a CBD capsule or something along those lines, it may have trace amounts of THC. Those would continue to be just in the FDA purview. Although the FDA has said CBD at all, any cannabinoid can't be in interstate commerce, but they just haven't been forced to. But this is just evolving policy. I don't think anyone really saw this coming, neither in the hemp industry nor cannabis industry, because people have been raising the alarm about these types of products for a long time and it's just been kind of silence from the DEA and the FDA.

[Rep. Charles "Charlie" Kimbell (Chair)]: Representative Bartholomew. When,

[Rep. John L. Bartholomew (Vice Chair)]: it's quite a few years ago now, when Colorado was one of the few states that had legalized, I had an opportunity, was actually part of several meeting, to tour a retail establishment in the production area. And one thing that really struck me is how important it is if you're trying to create specific strains that you don't, you can't have any cross pollination. So if you're doing cannabis for psychoactive active agents, you really need a very controlled environment whereas hemp, you put it on the field. Is that still the case?

[James Pepper (Chair, Vermont Cannabis Control Board)]: Yes, that is very much the case. You really need, I would defer to the farmers, the hemp farmers and the cannabis farmers in the room, but yeah, you really don't want, you want to be intentional about the combination and you're at a

[Rep. Jed Lipsky (Clerk)]: huge problem.

[Rep. John L. Bartholomew (Vice Chair)]: Where I'm going with that is then if you have people who are truly growing hemp out in the field, that strikes me as clearly agriculture, but if it's under the cannabis control board, how is that gonna work where there's a regulatory water quality farming aspect and a regulatory cannabis piece, how's that gonna fit together?

[James Pepper (Chair, Vermont Cannabis Control Board)]: Right, so in 2022, when the agency of agriculture stopped their hemp program, they handed off all cultivation to USDA. And this bill doesn't contemplate, the miscellaneous agriculture doesn't contemplate the cannabis board taking it back. So if you are just a hemp, you're a hemp grower, not someone who's taking the material and converting it into products, you're covered by the USDA and the reps, and that's who's gonna maintain oversight over this. And that's important because some banks look at, oh, you have a license from the cannabis control board. Are you a cannabis company or a hemp company? So we're gonna have to walk that line with the processors. But the processors are the ones that are actually taking raw material and extracting it and bringing it above the 0.3%. So they're the ones that are theoretically crossing into this zone of cannabis that they argue that all the final products, that concentrate, that distillate isn't going to the public. The final product is compliant, is a combined hemp product. But because they cross that divide, even if it's intra supply chain, they need some regulation somewhere. And the cannabis board, because we have a lab that is authorized to even possess cannabis, the agency of agriculture's lab can't have cannabis on its site, can't have marijuana on its site because of drug free workplace laws at the federal level. We're really the only ones that can step in and make sure that these manufacturers, which have crossed this Rubicon into cannabis temporarily can be regulated appropriately.

[Rep. John L. Bartholomew (Vice Chair)]: So it sounds like what you're saying is, if this goes forward, that farmers are not gonna be affected, but the producers that deal with the

[James Pepper (Chair, Vermont Cannabis Control Board)]: product Yeah, the producers that either take the biomass, buy the biomass and extract it, or the people that take that extracted distillate and then convert it into products. Those are the ones that are And then the people that are selling, those are the people that are kind of captured by this bill.

[Rep. Charles "Charlie" Kimbell (Chair)]: I know there's a couple other hands out I just want to say, because representative Campbell is on the agenda to follow that we're running a little bit late. If you need to be doing important committee work, wanna rush back and forth, we can break. We will wrap up here in just a few minutes, I think. And then we'll probably take a short break. To finish. Nope, I think representative Bos-

[Rep. Michelle Bos-Lun]: Okay, so quick question. You mentioned the miscellaneous agriculture bill, and I just wanted to make sure you're talking about the Vermont Senate. Okay, because I was like, is that something added to ours that I don't remember? It's very complicated. Vermont Senate.

[James Pepper (Chair, Vermont Cannabis Control Board)]: Lot of moving pieces.

[Rep. Michelle Bos-Lun]: Because we haven't started looking at that yet. It

[James Pepper (Chair, Vermont Cannabis Control Board)]: hasn't passed the Senate yet either. Okay, all right. So a possibility that it changes dramatically.

[Rep. Michelle Bos-Lun]: Okay, just we have a lot of miscellaneous egg bills in our Right, circle,

[Rep. Charles "Charlie" Kimbell (Chair)]: yeah. Yes, good point. Representative Lipsky,

[Rep. Jed Lipsky (Clerk)]: this is just for vocabulary, the intrastate versus interstate.

[Rep. John L. Bartholomew (Vice Chair)]: Just

[James Pepper (Chair, Vermont Cannabis Control Board)]: could you explain Yeah. Is intra just within the borders? That that's what I'm using it as. Yes. So intra with an a just within Vermont, inter Vermont to anywhere anywhere Vermont. Thank you. Just a couple of quick questions you

[Rep. John O'Brien]: may have already answered. How many low THC hemp growers do we have on the community?

[James Pepper (Chair, Vermont Cannabis Control Board)]: Believe, because it's covered by USDA, I don't have that number off the top of my head, but I think it's around 20.

[Rep. Charles "Charlie" Kimbell (Chair)]: And then what happened, when we passed this stuff, didn't we

[Rep. John O'Brien]: have one or two sort of field testers at the agency of ag, where did Zay go?

[James Pepper (Chair, Vermont Cannabis Control Board)]: So you had three positions at ag when you passed the 2018 bill, you gave him three positions to oversee this program. When you gave us authority over the products, not the processors, but the products, you shifted two of those positions to the Cannabis Control Board and that happened in 2022 when they wound up. So one of those physicians stayed at Ag, two of them came

[Rep. John O'Brien]: over to us. Okay, what's the one Ag do now?

[Rep. Jed Lipsky (Clerk)]: I don't know. Anything

[Rep. Charles "Charlie" Kimbell (Chair)]: else? Well, I think we can pause there, then we will know later today, I think, the Senate bill includes this provision. It's on third reading today, this afternoon, I believe. So either way, we'll have a walkthrough next week from Leg Council going through the bill. It was fairly long, 40 plus pages, I think. And then we'll have The whole sentiments, yes? Yeah, we'll just go through the whole thing so that we're It'll probably be a little bit overwhelming because it's a lot more than this, and we won't be expected to make any decisions right away, but at least we'll get a sense of what's there and then we'll break it down piece by piece. Maybe since we've been thinking about hemp, we'll start with that section and we may have you back in or support once we have a bill so that you can make sure that we understand how you feel about the actual language there. After our break, representative Campbell, who's been waiting patiently, going to introduce for us H-nine 45, which is related short form bill. And then we'll have Ledge Council follow, I think.