Vermont Legislature SmartTranscripts:

[Robin Scheu (Chair)]: Good morning. This is the House Appropriations Committee. It is Wednesday, 04/01/2026, and that's no joke. It is just after 10AM, and we are going to talk about cannabis. Now that we have the budget moved on to the Senate, we are trying to use this time to do a little more education of what's happening in different areas. And this is one of the topics that came up of interest as we were going through the budget. Now that it's been around for a few years, when we legalize cannabis, we've done stuff with taxes and sort of how it's going and all those assets. Ted has from when fiscal has stuff to tell us about that. And we have Pepe here as chair of the Cannabis Control Board, So welcome.

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: For the record, Tab Barnett joining fiscal office. And yes, I am going to outline screen mode outline cannabis taxes and allocations. I will note that I am on the revenue team at JFO, and so I primarily think of things in terms of revenue. And this is the Appropriations Committee. So yes, we will talk about allocations to some extent. We will talk about the content will be lighter on specific appropriations. But yes, we will talk about the money that's being raised and where it's going to at a very high level. Vermont has two taxes on retail cannabis. One is a 14% cannabis excise tax and a 6% sales tax.

[Michael Mrowicki (Member)]: This is on, as I noted,

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: the retail sale of cannabis. The 1% local option sales tax does apply to cannabis transactions. Know it's a question that comes up when people are like, Does the local option tax apply to cannabis? Yes, it does. So between these two tax types, without a local option, the combined rate is 20% on cannabis. While overall Vermont follows a similar structure to many other states, I would say the excise tax or sales tax structure is kind of the most common way. Books are taxing cannabis at the retail level. There are different ways to do it. So two examples here. Connecticut bases their taxation on the amount of THC content in a product. And the rates are different depending on whether it's plant material, it's edible. The rate is higher for edible products. And then they have other products which I would assume is for concentrates or distillates of cannabis. So yes, I think also New York taxes based on

[John Kascenska (Member)]: potency. Are

[Michael Mrowicki (Member)]: THC infused drinks considered edibles?

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: That's a good question. I don't know. I would have to this is like I looked at the NCSL kind of state by state comparison. But, yeah, let me

[Michael Mrowicki (Member)]: And just and just as a typo, I was in New Jersey a month ago, and they fell THC and puke cranks at supermarkets. Is it as what? THC infused drinks. Oh,

[Robin Scheu (Chair)]: okay. So instead of Red Bull, it's like, okay. No.

[Michael Mrowicki (Member)]: That's another conversation in a different committee.

[John Kascenska (Member)]: Has anybody ever done any math in order to make the numbers comparable so you could compare apples and apples instead? Because when you're looking at THC plants and stuff like that, it doesn't relate very well to our excise tax method. And so I'm just curious whether or not when you boil it all down, how we compare in terms of the amount of tax reflecting basis.

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: Right. You would have to think about in Vermont, whether there is a correlation between the retail price and how much THC there is in various products. Would be a bit of a mathematical lift. Happy to look into the thought process in Connecticut when they were standing up there at market, what they were thinking about in terms of basing it on potency. And yes, I'm not as conversant in how price compares to potency here in Vermont and how that translates into excise tax. But I'm happy to take

[John Kascenska (Member)]: My suspicion a general would be that there's a lot more ways that tax money can fall through the cracks by the other methods compared to our method with the excise tax. There are Sorry. But then so that's one thought. But the other thought is, are we taxing enough? Are generating an equivalent amount of revenue based on our tax method compared to Southern method?

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: Right. Enough is a tricky question, right? Because it's ultimately You're balancing a bunch of different concerns, the JFO response is enough is a policy choice. And you're trying to balance when setting tax rates, thinking about generating a certain amount of revenue versus if you have tax rates set too high, then you impact the market and decrease consumption, so really trying to find that sweet spot. And I think the other thing to note here is that with a retail percentage, the conversion into tax by potency depends on supply and demand in the market. So, right, the price per ounce of flour, if all of a sudden there's an increase in supply, the amount of tax collected on that flour would go down. And so we're connected to price, so comparing it to something that's based on potency, which is fixed within that product, is going to necessarily rise and change over time.

[Robin Scheu (Chair)]: Go ahead, Zane, and then let's move on to the full history of the market.

[Wayne Laroche (Member)]: I just want to ask, when you're talking about correlation between potency and revenue, I'm thinking of, is there anything maybe starting at the beginning and going to where we are now? Have we seen increases in different types? I mean, the use of selling more or less in plant and more edibles and other things. So you can see that one is a more popular, it's growing in tax revenue versus one that's and not just the fact that you can factor in the fact that there's a different tax based on what it is, but you can also see that one category is generating more revenue than another category.

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: Great question. If it's okay with the chair, it's possible that Chair Pepper would know the breakdown based on different products. Or I know the data exists. I just don't. I don't have them on the top of my head right now. If it is Sure. I'm not going put Chair Pepper on the spot here. For the record, James Pepper, Chair of the Cannabis Control Board. I do have that data for you if you'd like

[Robin Scheu (Chair)]: to see how we have

[James Pepper (Chair, Cannabis Control Board)]: eight out of broad categories of cannabis cannabis products and

[John Kascenska (Member)]: I do have data on how their

[Robin Scheu (Chair)]: sales have moved over time. We just have a report that we can send around

[Michael Mrowicki (Member)]: and you can see

[Robin Scheu (Chair)]: it there just simply. That would be great. Or just send it to Autumn and then we can post it as well. So let's move on because I think we're starting to get into stuff that you're going to be talking about. This is just kind of the background of, right? History and projections and things like that.

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: I have to make this joke before I move on. We're getting into the weeds.

[Robin Scheu (Chair)]: Next slide. I'll Okay. Come back anytime. Yes.

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: I'm here all day. So, the next slide is high level historical and future projections for cannabis sales and excise tax amounts. Y'all are thinking about FY '27 quite right in the budget construct. So, the excise tax, the consensus revenue forecast from January 26 estimates that there will be $23,600,000 in cannabis excise tax revenue. That is here. I will move with my pointer. And that implies that there'll be about $10,100,000 in sales tax in fiscal year twenty seven.

[Robin Scheu (Chair)]: Would you just pause and explain the excise tax versus the sales tax? When there's an excise tax, who's getting taxed? Where's the taxing happening?

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: Yes, it is happening on your retail transaction. So you go into Grand Central or any of our retailers in the state and make a purchase of cannabis at 146% is levied on the sale price of cannabis that you're buying from those retailers.

[Robin Scheu (Chair)]: Okay, so I go to buy $100 it's gonna be 120. Correct. And then 6 is retail sales tax and that goes to the Ed Fund?

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: It goes to the universal after School and Summer Spath Okay,

[Robin Scheu (Chair)]: the 6% does. And then the 14% goes?

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: It goes 70% to the general fund and 30% to the substance misuse So pension

[Robin Scheu (Chair)]: now that goes to the education part.

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: Yes, that was changed in, it is on one of my slides, I think Act 87 of 2024, the BAA. There was an issue, right? If you have money that's going into the education fund, but you want to make grants to folks who are outside of education system, it's the problem, and so it was moved into the special fund. Yep.

[John Kascenska (Member)]: The excise tax is often wholesale

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: sales? This is where, yes, it is referred to as an excise tax. Usually in tax administration and parlance, an excise tax does refer to something that's levied at the wholesale level. Part of why this is called an excise tax is because the streamlined sales tax agreement means that you can't set differential rates for a product. If you have a 6% sales tax in Vermont, we're one of the member states of the streamlined sales agreement, you have to levy 6% sales tax on all products that you subject to the sales tax. And so in Vermont, as folks are thinking about other things that resemble a sales tax, they just call it an excise tax and then it's outside of that structure. And so that's part of the reason why this is called a sales tax, it's levied actually at the retail level. Yes. The amount of revenue estimated in FY twenty six implies total size of the market for cannabis. The retail amount that's in, at least in the adult use size, is about 1 and 60,000,000. I put this information on here for a sense of magnitude. Think there can be a consumption that the cannabis market is much larger than it actually is. And that if taxation on cannabis is generating more revenue than it actually is. So the base we're talking about here is really 160 ish million of retail sales. So yes, our 20% is generating $22,600,000

[Robin Scheu (Chair)]: Yes, and that is just helpful for us to see because we've had a lot of different departments, agencies, organizations saying, just give us some of the cannabis tax. And it's not that Exactly.

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: Municipalities have to opt in to have a retailer within the municipality. 79 at last check have adopted retail cannabis. Yes, there was some conversations in the Senate about having all municipalities hold a vote. Essentially, yes, having more municipalities hold a vote, but up until now, nine have adopted Reach Out Campus. So a question I get asked quite a bit is whether the cannabis market has reached maturity. And there are some indications that it has. So this chart shows monthly tax revenue collections since the first month that we collected, that the adult use market was opened, all the way up until December 2025. And you can see, as the market was booting up, more retailers were available in Vermont communities. Size

[Wayne Laroche (Member)]: of

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: the mark month over month, tax collections increased pretty substantially from less than $500,000 in total. These buyers reflect both excise and sales tax, but the different colors, all the way up to about $2,000,000 in collection a couple months after July and September '3. So it was pretty substantial. And then after that, you saw more measured growth that kind of chugged upward. And then more recently, outside of August '25, it's kind of been in this $2,500,000 range. It does vary a bit. If you have a good ski season, you might see a bump up in tax revenue collections, and it is slightly correlated with our tourism market. So yes, there are indications that where we are now, the market is relatively mature. We'll see a relatively stable amount of revenue. And to that end, the January 26 consensus revenue forecast estimates that tax revenue collections will grow by 4.3% from 'twenty seven to 'twenty eight and then 3.2% from 'twenty eight to 'twenty nine. So really more an inflationary growth.

[Robin Scheu (Chair)]: I'm struck by this spike in August. What happened? Is August a big month? Is there an event?

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: I don't know. It's kind

[Robin Scheu (Chair)]: of striking, right? It's an outlier. And cannabis, you have to be 21 to purchase. Is that right? So it's not supposed to be kids coming back to college, right?

[John Kascenska (Member)]: Okay. To abstract with the fact that November is the lowest, I figured all that, and that's pierces.

[Robin Scheu (Chair)]: Maybe it would help next year

[Wayne Laroche (Member)]: for the people that didn't

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: It's featuring me. Also important to note that these monthly figures are reflective of the prior month's sales data. So what you're collecting in August, right? Similar to sales tax, similar to meals and rooms. Right? It's like folks are submitting the returns based on the previous months. Yes. Ski season.

[Wayne Laroche (Member)]: Lynn? Yeah. It looks cyclical. Amazing. It goes up in the summer. It goes up in the ski season,

[Robin Scheu (Chair)]: and then it sort of evolves. Then it's wave type.

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: Yes, yes. There is certainly some correlation with turbulent to the state.

[Robin Scheu (Chair)]: But it's not wildly cyclical.

[Wayne Laroche (Member)]: No, just

[Robin Scheu (Chair)]: mildly, a little bit of seasonality. Okay.

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: Oh, and then now we're getting to allocations. This is a bit varied. As I mentioned earlier, 70% of cannabis excise tax revenue goes to the general fund, 30% substance misuse prevention funds that was created in last year's budget. And so I provided based on this current fiscal year that we're in and the next two fiscal years, what the splits between the general fund and substance misuse prevention funds are projected to be. Substance misuse prevention fund is administered by the Department of Health. Y'all, in preparation for this Control F, substance misuse prevention fund, and in September, there's language around looking at the sub expenditures that are happening in the opioid. Forget the rest of it, but the opioid special fund, whether some

[Robin Scheu (Chair)]: appropriations in that special fund might be able to be supported through substance misuse prevention money. Right, and I'm gonna look to, James is not here. I'm assuming that if this was the projection and that's the 16.5 is what did go into the general fund. I don't know if Mike you remember that or not from the budget. Sorry. That's okay. In theory, we use these for the revenue forecast, the 16,520,000.00 should probably be transferred from the cannabis fund to the general fund in the budget. And I'm just not remembering whether that's the case or not. There There was a transfer. I just wonder if it's the same thing. We could match it up and take a look.

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: Yeah. It probably would. I can take Okay. And starting in fiscal year so for '27, the cannabis excise tax revenue, this is going to be in a future slide. Let's see if it's the next one. It is. So in the coming fiscal year, in fiscal year '27, money from cannabis excise tax revenue goes directly into the general fund and substance misuse prevention funds. This is different than other constructs in previous years. So, the fraud level, without going into the full legislative history, which is legislative councils really. We'd be able to provide a more in-depth one. This is just high level. First year, fiscal year '23, excess tax revenue was in the general fund. And then in fiscal years '24 and '25, revenue from the excise tax was deposited in the cannabis regulation fund. And the remainder after cannabis control board expenses was transferred to the general fund and substance misuse prevention fund in that same seventythirty split. And then starting in fiscal year twenty six and beyond, that's when it reverted back to going to the general fund. Last year in the budget, you did see a transfer because from fiscal year twenty five revenue, that transfer was actually happening in fiscal year twenty six. As you're building the budget, you have that fiscal year twenty five revenue, you have the amount in the general fund, and then you're covering the control board's expenses for fiscal year twenty six from that transfer in '25. It was all very complicated and messy.

[Robin Scheu (Chair)]: Now it's going to be December 30 and then the control board is funded by general fund. Exactly. Yes.

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: Net of any fee revenue that gets deposited in the cannabis And

[Robin Scheu (Chair)]: we always knew that the fee revenue would not be enough to fully support or fully fund the control board. The fees would be so high as we wouldn't have a market. Yes, I

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: do have that in one slide beyond a little more context because there was some legislation, while establishing the fee schedule, did specify that there was a closer link between fee revenue and control board expenses, but policy choices made sense then, kind of have made that moot essentially. Okay, so cannabis sales tax. The 6% sales tax goes to the Universal After School and Summer Special Fund created by Act 87. I did remember that number correctly. The Budget Adjustment Act in that year. So the Agency of Education uses that revenue to administer a grant program for after school centers and programs across the state. There is a report that I'm writing down a note right now to send to Autumn, produced by the Agency of Education, talking about grant awardees, what they've done with the fund, and their plan It goes into more detail on their plan to leverage all the revenue that's coming into the special fund. And so a key part of using that revenue is that each fiscal they have cohorts essentially of awardees. So, in a certain fiscal year, they're choosing a group of programs and centers to receive funding for multiple fiscal years. And so, in the program track, folks are receiving funding for three and a half years. Centers receive funding for five years. And so by stacking kind of each cohort, adding a new cohort each fiscal year, that will build up spending. So right in fiscal year twenty five, the cohort was awarded 2,500,000.0 almost. But when you add additional cohorts in future fiscal years, there, In total, there's $10,500,000 in funding that's obligated through fiscal year two thousand thirty. And if you want more detail on who's getting those awards, where they are, I would defer to that report. But I will remember.

[Robin Scheu (Chair)]: You'll send that and we can post that on our Yep. Thank you.

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: And if there's a bill on the Senate side that think it's made up through the Senate at this point. It's coming to you all that would allow the Agency of Education to allocate some of that after school funding to libraries. And as part of that conversation, the Agency of Education, the folks who are running this grant program have provided more specific testimony on the use of that fund. It could be part of future conversations in this committee. So

[Robin Scheu (Chair)]: this is for after school, but somebody in

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: the Senate wants to add libraries? Libraries do after school programming. Okay,

[Tiffany Bluemle (Ranking Member)]: so for their after school program. For their

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: after school programs, yep. And yes, there's a discussion about whether the grant applications are too onerous and whether it's ways to streamline and expand the opportunity to use these funds too.

[Robin Scheu (Chair)]: So that's gonna feel somewhere in the senate. Right?

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: Yeah. And you might yes. They may not see it. You may or may not see

[Robin Scheu (Chair)]: it. Okay. John?

[John Kascenska (Member)]: So it's possible money could go to public libraries who might be hosting after school programs? Have to

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: They're currently eligible to Broad. They're currently Broad library definition. They currently are eligible to apply, but given that in libraries, it's maybe someone who's it's a relatively small library. They may not have the capacity to fill out the full application. So, yes, there is a conversation about that in the senate.

[Robin Scheu (Chair)]: Curious about that. Well, Say you're not.

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: Okay. So for fee revenue, a whole set of fees for everyone in the cannabis market, cultivators, manufacturers, retailers, etcetera, these fees raise about $2,500,000 per year. We talked about this a bit, but it does not raise enough revenue to fully support the expenses of the cannabis control board, which their budget request fiscal year twenty seven is approximately 7,100,000.0. So there is a delta here. To this point, because I do it is every time this comes up, a question, right, of whether these were intended or supposed to cover the expenses of the control board, right, and wanted to pull two separate language from two different bills that were setting up various parts of the adult use market. And on one hand, the original ACT 164 noted this intent to encourage participation by small local farmers And the board jumped into policies to support small cultivators. And on the other hand, Act 62, which required the control board to propose a fee schedule, it specified that this fee schedule should include an amount that would repay over a certain period of time to the general fund and the application of excise tax to the regulation fund. So indicating that there should be a close match between fee revenue and control board expenses. Ultimately, the decision was made by folks at that time to adopt a fee schedule that supported smaller cultivators. So relatively speaking, folks who are growing have less canopy space, have lower fees. And the goal was really on this first part, to have a regulated market in Vermont that supported small growers, brought folks out of the illicit market, etcetera. So that was a policy choice. I will also note that the control board and their testimony also notes that in other states, no other state has fee structure that fully supports the expenses of their cannabis regulators. And so, yes, the demands on the control board and their ability to fully regulate the market, the cost of that as well in order to create a fee structure that would fully support that, I think, would be onerous on the market. So that's it. Very high level. I did want to flag two separate resources. The first is, I don't know if y'all have heard about our new document type at JFO. We're very excited about it. It's called So they're Fast Facts. They're five subjects. And so the goal there is to do one to two page quick hitting documents on topics that we get a lot of questions on. So one of them is on Canvas exercise revenues. It will feel very similar to this presentation. I borrowed quite a bit from it. But there also are fast facts on local option taxes. There's a fast facts document. There's a fast fact document on gasoline tax and two other subjects. I forget.

[Robin Scheu (Chair)]: All on tax. Fast facts about tax.

[Tiffany Bluemle (Ranking Member)]: There will be budgetary ones too. Hard to say.

[Robin Scheu (Chair)]: I think there are

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: could be possible that I am just I'm going to stop sharing. But I'm just remembering the revenue ones because I'm on the revenue team. It's possible.

[Robin Scheu (Chair)]: And maybe some others. Yes. Okay. Then had a question, and then Dave.

[Wayne Laroche (Member)]: I want to go back to the fee revenue issue. Yes. It appears that cannabis and the fees that we created for them do not cover their costs. It sounds like we're not unique. So does that mean that this is one product that we have to subsidize As opposed to alcohol or cigarettes or Right, right.

[Robin Scheu (Chair)]: Could choose not to subsidize it. Right, we transferred all the money to the general fund.

[Wayne Laroche (Member)]: And all the other money that we now use up to something else.

[Robin Scheu (Chair)]: Well, the question is about

[Michael Mrowicki (Member)]: taking money out to pay for the cannabis control board?

[Robin Scheu (Chair)]: Actually, we're not sub we're not subsidizing it because they're bringing enough in excise tax that goes to the general fund. Right. And then they're getting paid out of the general fund. It just isn't a direct line.

[Wayne Laroche (Member)]: Right. And those fees are supposed to be on the users. This fee is not a tax. The tax is not a fee. And then

[Robin Scheu (Chair)]: other fees stays with the The fee stays with the control board. The excise tax, 70% of it goes to the general fund. That is, I forget what the number is, point five It costs the cannabis control board about 7,000,000. So they're getting 2,500,000.0 in fees, and they're getting some of that 16,000,000, but it's not a direct line back. So it's not under wanted.

[Wayne Laroche (Member)]: Okay, I get that. But do the other vice taxes that we have using alcohol, cigarettes, other things, do they have to pull from the general fund in addition to their fees?

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: So there is the and a fast fact

[Robin Scheu (Chair)]: question. No, there

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: is no Fast Facts on this subject, and there are two. There's a Fast Facts on the pension plus payment and the Higher Ed Trust Fund are the two ones I was blanking on. So, are the five. So, it is

[Tiffany Bluemle (Ranking Member)]: for other

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: things like alcohol, tobacco, right, that is regulated by the Department of Liquor and Lottery. There is the Liquor Control Enterprise Fund, but there's more in the Liquor Control Enterprise Fund than fee revenue for licensure, so it's not exactly an apples to apples comparison there. Right, yes. Broadly speaking, fees are intended to pay for The regulation. The regulation. But here in this market, I think because it is a market that requires pretty extensive oversight and y'all provided great a deal of resources to ensure that the cannabis market is well regulated. It's harder to maintain that linkage between fee revenue and expenses of the board. You would have to 2 and a half million. You're looking at an extra 4 and a half million. So, you'd have to more than essentially almost double fees across the board to get to a point where fee revenue is matching the regulation costs. That would go against the goal potentially. You've discounted fees for smaller cultivators and growers. And so in order to make that policy choice, it would place a pretty large burden in terms of fee revenue on folks in the market. So I think the decision y'all have not to look into intent, but write it as a policy choice to say, we're going to keep fees at a certain amount and we're gonna use a certain amount of general fund or excise tax, however you think about it, right, to support the remaining costs. I

[David Yacovone (Member)]: wondered if there's any logic given that cannabis has an adverse health impact as does tobacco, to consider moving, allocating the proceeds from the excise tax into the healthcare trust fund, whereby it could leverage Medicaid dollars and increase it significantly. And at least in the first year, to mitigate in some way the loss of the provider tax revenue, which is around 18,000,000 and this is around 18,000,000. I know it will put pressure on the general fund, but in some way we're gonna have to, we might consider doing that anyways. Does that have any merit, or does it fall apart?

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: I had no idea.

[Thomas Stevens (Member)]: It's really interesting, yeah, on

[Robin Scheu (Chair)]: the face of the model. Maybe that's a Nolan question to see if could talk to Nolan about that.

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: That was go ahead. I'm sorry.

[David Yacovone (Member)]: No. I was gonna say maybe he could mention it to Wayne and me. Anyway, go ahead.

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: No. I was gonna say exactly. My as you were mentioning that, my first would be immediately to go back to the office and ask Nolan what he thought about it. Yeah.

[Robin Scheu (Chair)]: Yeah. Mhmm. And ask if you're on the domain. Thanks for that.

[David Yacovone (Member)]: I didn't tell him you said it before. No. It's tough.

[Robin Scheu (Chair)]: So, all right, so fast facts. That's what we came about.

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: Yes. And then the second resource is we do have a cannabis revenue tracker on the JFO website. Maybe this can Let's see. I'm going to do another stop share reshare. So this is an overall tracking document that shows sales and excise tax revenue month by month, their collections, and then how that compares fiscal year to date and then compared with the prior fiscal year. And so this is if you ever are wondering what is happening in the cannabis excise tax month by month, you can go on the Dayforce website and I will the link is in the presentation, but here's the document And it shows month by month. You can see the kind of trend in this fiscal year, right, is there was a big bump in August. But outside of that, excise tax is about 1.5 to $1,900,000 in revenue. Sales tax is more in the $700,000 $800,000 range. But yes, it shows monthly connections, year over year change, percentage term, in dollar terms, and then a chart showing how cumulative tax collections have gone. So that's another resource available to y'all.

[Robin Scheu (Chair)]: And that's that revenue tracker?

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: Yes, that's the revenue tracker. Yep.

[Robin Scheu (Chair)]: Any other questions about cannabis while we have here? It's certainly been evolving.

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: Yes, It is one place where I make a note of JFO often talks about complexities as a consideration in tax administration. This is one place where the complexity has made this one exceedingly hard to administer. It is reassuring that it's landed in a place where it feels like absent any policy changes, it's going to be stable for the next few fiscal years. And I'm excited about that.

[Thomas Stevens (Member)]: Yeah, yeah, this makes sense. I remember, we all remember the long discussion about cannabis and making it legal and all of that stuff. I wonder in the intervening, what we've had five years or so, or in that five years at least. I started

[Robin Scheu (Chair)]: in October '22.

[Thomas Stevens (Member)]: This is the first retail store. Right, right. Has there been enough time for the human services folks to look and see if they see any change in social behavior or problems that were associated with the cannabis market, the illegal cannabis market, either in terms of participation, in terms of criminality, terms of any of those things that were a lot of the points of discussion way back when, not way back then, only four years ago, I guess. But I'm not aware of any reports that have come out comparing numbers of arrests or consequences of cannabis consumption in 2021 compared to 2026. I don't know if there's been enough time or if the agency of human services has looked at that.

[Robin Scheu (Chair)]: Or public safety. Or public safety.

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: I will put in a plug for the control board puts out periodic reports looking at various aspects of some public health considerations and also taking an analysis of where there are places that policymakers can think about adjustments to Vermont's adult use market to meet people who are currently getting cannabis in the illicit market. And so that addresses some of the public safety concerns, right? To the extent there's data about if folks are purchasing in the illicit market versus the adult use market, I know they're keeping tabs on many of those considerations. And yes, if there's work that specifically asks your question, I'm not entirely sure, but some of their reports I've noticed have kind of addressed some of those broader level thoughts about how implementation of the market is going, where there are currently gaps that policymakers can think about, and how to best align the market going forward.

[Thomas Stevens (Member)]: Well, I think we all recall there was a big uptake in requesting expungement of records when that became possible after we passed this. A lot of requests went to the various judicial agencies to expunge records for something that's now legal but wasn't at that time.

[John Kascenska (Member)]: Can I just state a factor?

[Michael Mrowicki (Member)]: Please. $161,000,000 roughly in cannabis sales online, phone betting, sports betting for the boxers was 168,000,000. Really? So we know that our $100 go into devices, that doesn't count. That doesn't include lottery or liquor either.

[Thomas Stevens (Member)]: Liquor, yes.

[Michael Mrowicki (Member)]: But when you think about where's the money and then what we can get from it.

[Robin Scheu (Chair)]: Right, and it's interesting that they're just about the same dollar figure.

[Michael Mrowicki (Member)]: 168 numbers at the end of fiscal year, at the end of calendar year left here for Vermont only gambling. The betting for DLL got up to over $2.20 or something like that. Right. But it's just it's just a lot of money that goes into our economy somehow. My concern is always going to be if we're going to have devices, what is the return to the state? And we get a higher return from cannabis, we get a higher return from alcohol than we do from sports betting. I'm not editorializing, but I just wanted to like to throw the money out there now that we have a half a second to think about it in our life here. But it's just a lot of money that is being used to it just gives me this even for a teeny tiny little state to have that much money being expended on these two items.

[Robin Scheu (Chair)]: Yeah. Well, and what is that per capita? Right? In

[Michael Mrowicki (Member)]: the betting thing, the way it worked out not per capita, but in the in the in the betting thing, think they there were a 11 13,000 Vermont accounts, which doesn't mean 13,000 Vermonters. That could be as few as 4,500 adapters accounts. But at 13,000 accounts, that's like $11,000 for the betting, sports betting. And that's not the way gambling works. We can't, we, know, DLL will say, here's this average number of bet and here's this average number of bettors. It's like, no, most of the betting is done by very few people. Most of the loss are very few people.

[Robin Scheu (Chair)]: The median is really what you want.

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: The average is not

[Michael Mrowicki (Member)]: a good, to say, oh, it's average at $24 a bet. That's not so bad and it's like

[Robin Scheu (Chair)]: Well it's like having

[Thomas Stevens (Member)]: the richest person in the

[Robin Scheu (Chair)]: world walk into this room and say what's the average salary right with all this year it doesn't hurt.

[Michael Mrowicki (Member)]: How much did

[John Kascenska (Member)]: our college funds get juiced by the loss

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: Right. Of one person as

[Robin Scheu (Chair)]: Anyway, Wayne, go ahead.

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: I was

[Wayne Laroche (Member)]: just going to say that I do remember that when we came in and said that we're not getting as much money out of the sports betting as I think we participated. Part of that is that people are winning. So we have revenue that goes out. We have to go out.

[Michael Mrowicki (Member)]: Only a small percentage of those people win.

[Wayne Laroche (Member)]: Yes, but the point is that they winning means less for us.

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: It's a percentage, they're winning a lot. But that's the

[Michael Mrowicki (Member)]: mask, right? Because overall, can say there's more winnings being handed out. That's to like less than 5% of the betters. So the 95% of the betters who are either gentlemen betters or recreational betters, but most of the losses is also carried by about 5% of the people. Yes, true, but also that masks the fact that most betters lose.

[Wayne Laroche (Member)]: But the point is that if you want to look at these vice taxes, alcohol, cigarettes, lottery, sports betting, cannabis, we'd have to look at all of them together because I suspect that some of the others are much higher than whatever we're taking from cannabis. And I don't remember what the rejections were, but

[Robin Scheu (Chair)]: I do remember the long discussion. And liquor has declined. It's always slowing. And lottery, I don't know what lottery is doing. It's sort of level like a

[Thomas Stevens (Member)]: lottery is pretty level, but the liquor, at least our revenue for the floor is the club.

[Robin Scheu (Chair)]: One would say stable, lottery

[Michael Mrowicki (Member)]: but it goes up and down depending on the size of the billion. When we get to a billion dollar floor, we even get a couple dollars out of

[Robin Scheu (Chair)]: me. But

[Michael Mrowicki (Member)]: the other thing that people don't realize, often don't realize is 80% of lottery sales are scratch tickets, and only 20% are draw tickets, which is fascinating to me that, you know, we'll all go sit in the car well, not we, but, you know, people will go sit in the car and scratch their tickets. They

[Tab Barnett (Joint Fiscal Office, Revenue Analyst)]: stand there and

[Michael Mrowicki (Member)]: do it online. And they and, you know, here's always to ask the lottery director. You can tell this is off season for us because I'm going to go rift. But the you know, when I would ask the lottery director, he's like, wait. If I go into the store, convenience store, and buy a six pack of just, say, Budweiser at six point o percent, and I sit in my car for an hour and drink it, and then I walk back into the store, that person is trained at the threat of the loss of their license to not sell me another six pack of beer. That's $10 at Budweiser, 10 or $12, right? That's all. But if I buy $200 worth of tickets on the day that my Social Security pops into my into my account Right. And I go sit in my car for an hour and scratch $200 worth of tickets and then go back into the store and ask for more, that person isn't trained to not sell me the ticket. And the reason one lottery director many years ago said, oh, it's not a public safety issue. It's not like you're gonna drive in your car and drive into somebody else. I'm like, but it's worse because you're not being stopped. And oh, you could just go to the next convenience store. It was like, it's so it's this weird, weird, weird thing about how we handle gambling in this country.

[Robin Scheu (Chair)]: Never mind. Yeah. It's not just us. Alright. So we're gonna stop here. I'm not seeing unless you have another question? Yeah. Nope. Okay. This

[Michael Mrowicki (Member)]: is

[Robin Scheu (Chair)]: very interesting. You see that we start going off on tangents when we get into these things, but we really appreciate you coming and talking to us about this. Absolutely. Nice to know about fast facts and other research. Thank you so much. Great to meet you. Welcome to the gang. You come back tomorrow after repeating with us today. Trevor, thank you. Will go offline for ten minutes, take a quick break, and then we'll come back and talk about position.