Vermont Legislature SmartTranscripts:

[Senator Russ Ingalls (Chair)]: Okay, we're back. We've taken a bit of testimony this morning. We're gonna spend some time having a open dialogue amongst the committee about where we are with the bill. Think that where I'd like to see us is that by Friday that we have our language done, as much as what we can have it done. I mean, like, we're really done. I think what we're going to run into, if we were able to pull something together on Section 10, that probably should be done as well, as close as to where it can be. Think it's going to take a travel. In fact, I know it's to take a travel. But by next week, by the week after next on crossover that we're ready to book this thing out on Thursday. The whole bill is what we have it Friday at the very latest. Mean, we can set for Thursday and we use Friday as the fallback as far as to make sure that we cover any mistakes or anything that we have. Think we're closer to what I feel that we are. I just want to feel better about it so that we can make sure of all the hard work that we've done. We've done a lot of incredible hard work that we put out a good bill that we can defend on the floor should we have to do that. So starting, any comments about any of that, doctor?

[Senator Brian Collamore]: No. We just asked Lurb to come back with, additional language In their meeting? On section six except tomorrow, so we'll have that before we leave. I also got an email from the Conservation District's Yeah. We

[Senator Russ Ingalls (Chair)]: Oh, let me just read this quickly. I'm reaching out

[Senator Brian Collamore]: to the Senate Agriculture Wraps Up work on the miscellaneous bill to request your support for targeted clarification of Title X affecting Vermont's natural resources conservation districts.

[Senator Russ Ingalls (Chair)]: Before we keep their thought. Okay, yep, yep, good. Keep your thought. Before we go down through section by section, let's talk about the things that we don't have on our agenda that are important to us, with that being one of them, S60 being one of them. We want to get next week, Tuesday, I'm scheduling some more current use people who got shut out of process because they built barns on that. I got that coming out on Tuesday. Let's talk about this one right here. This is important, especially the couple committees that Major and Senator Plunkett and I first talked about, and that is with Gus Sealy's willingness to supply monies for the building in Barton that the Conservation District would like to purchase. Gus has said to me, Listen, we can do it through institutions or we can do it through the Ag Committee, I've checked with Counsel Collier and the AG, and they basically said, Just get the language and get the commitment from Gus is what we have. I think some of what you have in this letter, Senator, is that they need to have a little bit of a language change for themselves as well, they being the Conservation Districts. Maybe if you can have Linda, I could I I'd like Rob to see this that letter as well. Maybe you can send an email to him or send an email to Linda so that she can send it out. I can forward it there, isn't it to everyone, including Linda. I did go ahead. I should've checked with you first, although you said say get the language. I did, yep. So I emailed Brad, the owner,

[Senator Brian Collamore]: and Here's the thing. Please take Title X and give us some language.

[Senator Russ Ingalls (Chair)]: Yeah, that's what I wanted. So again, what it is for anybody that's listening, the conservation districts in Orleans County don't have a home. They are working out of the graciousness of Pool and Grain, who's got a very sizable building, but they don't have a place to be in that Orleans County. So they have worked with the Orleans County Fair, the Orleans County Fair, whatever their name is, it's just skipping me and it shouldn't. But anyways, they're working with the Fair of Orleans County. They have a building that they would like to sell and the Conservation District has expressed a willingness to purchase and the price of that would be $275,000 If I'm going from memory, I think it's $200,000 for the building and then it's up to $75,000 to modernize it to a new heating system and furniture. They're looking to do that. Again, in conversations that we've had, Gus Seiling's group has expressed a willingness to fund that, so we would just have to get something in our miscellaneous bill that would make that happen, if the committee would so desire.

[Senator Brian Collamore]: The language change is pretty simple. Right now it says real estate shall not be mortgaged by the conservation districts and provided that the sale, lease, or other disposition of real property is approved by written consent of the governor. And if we strike that, it would give them permission to negotiate with Orleans in that instance or wherever else they wanted to put the serviceability.

[Senator Russ Ingalls (Chair)]: So that's all it is. And

[Senator Robert Plunkett]: I I I got the same email from Mike Fernandez, and actually it's

[Gabriel "Gabe" Gilman (General Counsel, Vermont Cannabis Control Board)]: Oh, okay.

[Senator Robert Plunkett]: Or the same request from from Mike in the Bennington Conservation District Okay. And sent that to Bradley myself. So Okay. Good. That's, I guess, in the works.

[Senator Russ Ingalls (Chair)]: Oh, good. Good. Good. And you're comfortable with that, senator? Okay.

[Senator Robert Plunkett]: Good. Yeah. I had asked Bradley to check with if it seems simple to check to make sure that it is simple. There's nothing else. No other strings that might be pulling away. I haven't heard back from him yet.

[Senator Russ Ingalls (Chair)]: Okay. Okay. Are there any other more comments on that? Nope. Now okay. What section of that? Well, it could be on a miscellaneous. We don't have it. No. We don't have a section. No. That's good stuff.

[Gabriel "Gabe" Gilman (General Counsel, Vermont Cannabis Control Board)]: Sounds cool about that.

[Senator Steven Heffernan (Clerk)]: That would be new.

[Senator Russ Ingalls (Chair)]: Yeah. It'd be new. Okay. The next, and we, when we, and we also have, We also have Becky Castle with this, right? Yes. So let's finish up a couple of things, Becky, we started and we'll bring you on as far as the second six conversation that we've got. Can we also have S60? I would encourage all of you to look at that new language on S60. It's my feeling that I would like to concur with that and then in the dollar amounts, which we can't forget that neither. So let's make sure we talk about that. I would like to concur with the House's proposal of amendments to add in the form three part of it. I know we haven't taken a lot of discussion on that, So that's why I'm asking you guys to take a peek at that and make sure you're comfortable with that language. Because I think it was part of the ask of what I would like to put to appropriations is I would like to ask them $4,000,000 for that. So if you guys get to take a look at S60 as it was brought back over to the house, from the house to us, I think that we could just have a quick discussion on that. I don't, Rob, again language guy, I apologize, but I don't know that we gotta bring in, maybe we could talk to Bradley about it tomorrow when he's in at 60 and but if you looked at it and you were comfortable with it as well, I would I would go with that. So Yeah. We and we

[Senator Robert Plunkett]: we walked through it and I am comfortable with it as it is. I know Mike Mike O'Grady had given us the side by side.

[Senator Russ Ingalls (Chair)]: Okay. I think

[Senator Robert Plunkett]: Mike was the one that worked on that.

[Senator Russ Ingalls (Chair)]: So we could pass that bill out, and then I would like to on our list of what we have or ask. I would like to do half per million dollars and see what happens. And

[Senator Steven Heffernan (Clerk)]: that basically just added Forestry stuff. Yeah, take

[Senator Russ Ingalls (Chair)]: a peek at it, Sam, and make sure you're comfortable Yeah, with make sure you're comfortable with it. We also sold and I had said, I think before we went live or maybe as we went live on Tuesday of the week that we're back, we're going to have some I'll back up Friday. We're going to have some folks that are coming in that are asking to at least consider farming horses farming and to why as of right now, they're shut out of the current use program. So they want to pitch their pace for why they should be allowed into current use. Then Tuesday that we get back, we do have at least three farmers, and I'm sure there's more throughout the state, that built farm structures that were in current use and automatically just thought that those structures would transfer over or transfer in to the program and they didn't. They had very sizable tax bills that aren't recoverable And so we're going to learn a little bit about that on Tuesday. I'm working with Linda as far as to get those folks in for Tuesday of next week. And then we should again go down through our list of dollar amounts to make sure you guys are comfortable with the dollar amounts and can do that when we pass out S-sixty when we ask for the zillion dollars but we should go down through that and I think that we are good. I know that we haven't talked about farm kitchens. I don't see that making it. We'll we'll we'll talk about that when we go down through. I don't want to get on. As it is right now, we have Becky Castle in, owner and sissies of Anarchy. She couldn't make it earlier on our testimony, she's here now in Perthton. So

[Senator Brian Collamore]: let's pivot to that. Pivoting, before we start, I'm not sure

[Senator Joseph "Joe" Major (Vice Chair)]: if you were familiar with the process, but samples were always I actually bought it. I was I'm just I'm so I'm joke. Know.

[Becky Castle (Owner, Sisters of Anarchy Ice Cream; Farmer)]: The reason that I couldn't come earlier, I thought the testimony was at eleven.

[Senator Russ Ingalls (Chair)]: We

[Becky Castle (Owner, Sisters of Anarchy Ice Cream; Farmer)]: know. And I was like, oh, great. We'll make deliveries in Montpelier

[Senator Joseph "Joe" Major (Vice Chair)]: so we would

[Senator Brian Collamore]: get the

[Becky Castle (Owner, Sisters of Anarchy Ice Cream; Farmer)]: bar packing into I the

[Senator Russ Ingalls (Chair)]: am so joking. Listen, you don't get to look like a Donis over here by having a lot of samples. No. So so he is joking. The good news

[Senator Steven Heffernan (Clerk)]: is the

[Becky Castle (Owner, Sisters of Anarchy Ice Cream; Farmer)]: Capital Cafe is gonna have her plush. Like, right after right.

[Senator Russ Ingalls (Chair)]: Well welcome and glad to have you here. We had some very good discussion earlier. What we're trying to get to, a lot of different things. We're just trying to get accountability

[Gabriel "Gabe" Gilman (General Counsel, Vermont Cannabis Control Board)]: from

[Senator Russ Ingalls (Chair)]: state government to the people that count on state government to regulate them. We had a very good discussion with Land Use Review Board and another farmer who was caught up in farm structures. The Land Use Review Board's gonna meet tomorrow. They're gonna report back to us. I also had some conversations with folks that when you were in testifying last, that they are aware that their bedside manners need to get better, and I hope that we see that. I think we're gonna have some of that conversation more. Senator Heffernan would like to get ANR in after crossover and have some conversations about mannerisms about how people are treated with a certain department. But I will tell you that your testimony last time was very compelling and a lot of people saw it that we weren't realizing saw it. So it started a larger discussion. That's great. Becky, I'm not going to take up any more time. The floor is yours.

[Becky Castle (Owner, Sisters of Anarchy Ice Cream; Farmer)]: Okay, so I think you primarily want me to address section six about the accessory on farm building, the threshold for what would require a permit. Right now, it's 50% of your product has to be produced on farm and then you're exempted from the permit process. Every farm is working within that rubric right now. I think the big problem for me in changing it to up to 250,000 is that what about all the people who have been working within the 50% rubric?

[Senator Joseph "Joe" Major (Vice Chair)]: Right.

[Becky Castle (Owner, Sisters of Anarchy Ice Cream; Farmer)]: And I think you need both. When we started, here's an example. So, we're a perennial fruit farm. The first year that you put the plants in the ground, have virtually zero production. We actually take all of the buds off our fruit plants so that it encourages more root growth and stronger plants. So, we didn't have any real fruit production until 2017. We started making ice cream 2016. So, in that first year, we wouldn't have met the 50% threshold, but you have to get off the ground, right? So, we bought in from other farms at that time. But now, dollars 250,000, I don't want to be cavalier and say, that's actually not that much. But in the broad scheme of things, 250,000 buying in from other farms is not that big of a number. So, I think you need to have both of them, 50% or up to $250,000 If I could make the threshold higher than 250,000, I would.

[Senator Russ Ingalls (Chair)]: Okay, so can we, let us bring you up to speed as far as how the morning testimony went. I think the 250,000, well I know the 250,000 was more brought in for people to donate crops or so. So we agree with the OR that's a 50 or the 250,000. We will include both of those in there now. We had a lot of discussion this morning about the $250,000 and about that number being very arbitrary. Where did the number come from? Senator Heffernan has come up with the idea to where we can put some language in and we can adjust it to inflation. Joseph Joe had brought it in and said, Hey, we just went through a very inflationary time. Then nearing your testimony to where, Hey, you know what, that isn't really that high. I think that we will adjust with that language. We also had a very strong conversation with Len's Use Review Board again and saying, listen, we don't want that number to be an issue with just trying to pass with what we're trying to pass. And we want to be very transparent of what we're really trying to do. We're not trying to skirt anybody. We're not trying to do anything. There's not another ulterior motive here. So I think yes, where you are with that, Mindy, do we agree that that is the way that we're going to go? Yes.

[Senator Brian Collamore]: There'll be those two triggers. Yeah.

[Becky Castle (Owner, Sisters of Anarchy Ice Cream; Farmer)]: That's good.

[Senator Russ Ingalls (Chair)]: With inflationary, with the language of inflationary, so that could be a moving number.

[Becky Castle (Owner, Sisters of Anarchy Ice Cream; Farmer)]: That's really good because these numbers, if it's put in twenty years ago, if you have 4% inflation, you're gonna double in fifteen to seventeen years.

[Senator Russ Ingalls (Chair)]: Yeah,

[Gabriel "Gabe" Gilman (General Counsel, Vermont Cannabis Control Board)]: exactly.

[Senator Russ Ingalls (Chair)]: What else?

[Becky Castle (Owner, Sisters of Anarchy Ice Cream; Farmer)]: Well, I'm glad that there was the discussion about the ANR and Act two fifty. If I can suggest how I think the process should work with either of those agencies. Absolutely. And I think the leadership at the ANR is very amenable to this approach, but my previous career was fundraising. And when you would work with a foundation, they would say, hey, we're interested in funding this, why don't you write a concept paper? And then it was this very iterative process back and forth, kind of developing the process together, and I think that's what a wastewater permit process should be like. The very first thing that happens is the ANR coordinator or engineer comes to the farm, or the landowner meets with them and says, Okay, well I think we can get to the right solution with this approach. Then the engineer that you hire draws that out. So, by the time you submit the permit, it's kind of like you know it's going to pass because the ANR has already told you what's going to happen to the process. I think that's what should happen and it would be so much more cost effective rather than a ton of back and forth that spends a lot of the state's time and a lot of the landowner's time.

[Senator Russ Ingalls (Chair)]: I think you bring a very good point that as you work through the process, you should have some expectations that what you're trying to do is going to pass. It just takes away, then if it isn't, then let's just change direction.

[Becky Castle (Owner, Sisters of Anarchy Ice Cream; Farmer)]: Exactly.

[Senator Russ Ingalls (Chair)]: Let's work together and come up with a solution to where we have some understanding as long as we have done with what we say we're going to do, all sides, that there's going to be agreement at the end, is a successful permit.

[Becky Castle (Owner, Sisters of Anarchy Ice Cream; Farmer)]: Yeah, totally. Then the last thing with regards to the ANR is I think that they have an expectation that whatever solution they come up with is going to be like the permanent thing that's going to address anything in the foreseeable future. So, we, on our own volition, put in a water meter to see how much water we're actually using. On our busiest week of the entire year, we used 700 gallons. What I think they want us to put in is a really expensive pretreatment system. I mean, I haven't said this clearly because it's this very opaque back and forth discussion, but it sounds as though they want a pretreatment system in our wastewater system. That's kind of irrelevant, but the point is, they want really doesn't address the size operation that we are, which from a waste water perspective is super small, and also if their objective is to make sure that water going into the sewer or whatever is clean or that you're not putting off a lot of effluent into the waterways. Ours is a closed system. We have a septic mount. I just feel like they could probably have a lot of interim steps from where we are to a really expensive pretreatment system, which like I said, they haven't said explicitly that's what they want, but that's the intimation. It's just, in my view, there's a lot of less expensive things that would be perfectly acceptable to address whatever it is they want to address. To be clear, we have zero impact on the sewer system, on the waterways, it's closed septic mount, and we have four chambers in our septic mount. We use one of them. So, we're really, we have a ton of capacity, and I just think the expectation is way more than what's needed, and I'm not sure where that comes from.

[Senator Russ Ingalls (Chair)]: I think that's very wise of you to install a meter in there because that brings clarity to exactly all what you're saying. Brings fact actually.

[Becky Castle (Owner, Sisters of Anarchy Ice Cream; Farmer)]: Yeah, but I think that just aside from agriculture and I know this committee is only agriculture, but if the ANR operates this way with every single entity that wants to do any development, there's no way we're gonna reach our housing goal. I just feel like the state of Vermont is in a death spiral at the nexus of healthcare, housing, and education and it's all interrelated. Transportation. Okay. Transportation is in there as well, because if you don't have housing that's Anyway, so if we want to stop the death spiral, we have to figure out a way to get permitting done more quickly and more fairly.

[Senator Russ Ingalls (Chair)]: What else?

[Becky Castle (Owner, Sisters of Anarchy Ice Cream; Farmer)]: Got it. So many things to say. So Act 171, Act 181, Act 59, and 171 is the one, I don't know all of the details, but the thing that I'm most concerned about in it, and it passed back in 2016 or '17, I think the wildlife corridors and forest blocks in Acts 171, whatever the objective was, I don't think that they actually meet the objective. So, with Acts 171, I think municipalities can use it as a way to just prevent any remaining large pieces of land from ever getting developed. As an example, we're just one example, but there's a number of large pieces of property in Shelburne, where a lot of them have been designated at at least proposed designated as wildlife corridors or forest blocks, which our entire our farm is bisected by a proposed wildlife border that goes right through our farm and the operation, like, where all of the people are I mean, it's not a wildlife border. It's a field, which if I were an animal, I would not be running through that field. But anyway, so I think it's an opportunity for municipalities to have so much leverage over what's done with pieces of property, and it's really problematic. And then there's another property in our town, I think it's almost 300 acres, and like 80% of it is designated as a forest block. And that's a remaining piece of land that could have some housing on it. And from a financial viability perspective, as you all know, you're familiar with agriculture, the main way that you can access capital in agriculture is by borrowing against your land or selling a portion of your land. Think forest blocks and wildlife borders immediately diminish the land on your balance sheet. So, it's really problematic, and I think Act 59 and elements of Act 181 have the same effect. We say as a state that we want working lands, but really there are so many things, like so many forces at work that really make it difficult for farmers to operate, to get capital, to know that their land is going to have value, so if they decide to stop farming, because it's a very difficult profession, that they can actually sell their land and get something from it. The cynical part of me thinks that that's the intent with all of this. Let's erode the value of rural land to the point where farmers have to sell it for a penny, and then it's going to be conserved, which is fine, but it should be at your own volition and not because the value of your land was diminished to nothing. That's pretty much it. Those are all the things I have to say.

[Senator Russ Ingalls (Chair)]: We do appreciate you. Again, your testimony is very important to us today and what you've shared with us last week. We want to make it easier. That's what we're here for. And I think that we do a good job with it. It's a committee that I think has gotten a lot of praise throughout the farm community That is a committee that listens very hard, but listening is one thing and being effective is another. I think we're as effective as we are listening. Very important to get the testimony. I think the most terrible thing of government can be this, that you just go and do with what you think is right without knowing what is right. We like to hear a lot of what's out there so that we're part of the solution and not a problem. So we thank you. Open door, always. Let us know what's going on. Let us know what we need to do better, who we need to put attention on. Think I think we need to do that very effectively.

[Becky Castle (Owner, Sisters of Anarchy Ice Cream; Farmer)]: Well, I really appreciate the audience. And with regard to the samples, why don't you all come out to

[Senator Russ Ingalls (Chair)]: our farm? I would love to hear that. Yeah. Yeah. Absolutely. Well, he's got a sign on his car that says hungry senator. So so he pulls in there. Be ready. You know?

[Becky Castle (Owner, Sisters of Anarchy Ice Cream; Farmer)]: That was.

[Senator Russ Ingalls (Chair)]: Thank you for coming in.

[Becky Castle (Owner, Sisters of Anarchy Ice Cream; Farmer)]: Yeah, of course.

[Senator Russ Ingalls (Chair)]: Sounds good. Okay, so that's good. Anybody before we shift back just going down through the bill as far as our miscellaneous bill, any comments that wanna be made or anything as far as any of that? We we good? Yep. Good. Okay. Okay, so what I'd like to do now is just kind of go back to what we were doing. We talked about previous before this last testimony as far as projects that are on our radar or need to be on our radar that aren't necessarily in our miscellaneous bills, but we intend to finish up these projects to hit crossover. So what I'd like to do with your guys' permission is to go down through these sections by sections and just have a quick recap of where we want to be. Starting with sections one and three, remembering that tomorrow we do have Bradley all day long. Let's see, do we have him tomorrow? Yes, tomorrow. Yeah, so we have Bradley all day tomorrow. Where am I screwing up here, Linda? Right here. Hold on. So it's like Yeah. Thursday, Bradley Chumman. Okay. Thursday. Okay. Well, I apologize. We can't do that. That's why I've screwing up. I've forgot almost the whole section of what we're doing with Yeah, yeah. Why don't we take a few minutes or we can, I think we're closing out where we can start now if everybody's ready? Okay, let's jump into this. Sorry, Sorry. Your chair is pretty anxious to get down through that bill. So sorry, a little bit confusing We have on our agenda at 11:00. We might be just a few minutes early, an act related to miscellaneous agricultural subjects. We have a sectionist there working with the cannabis control board and our stakeholder groups on some language that is going to be an addendum to our miscellaneous bill. That is to bring some clarity and some regulation to how hemp growers are to create their product and move it through the market. Jake?

[Becky Castle (Owner, Sisters of Anarchy Ice Cream; Farmer)]: Jeffrey is not able to come, but Jesse Harper is here.

[Gabriel "Gabe" Gilman (General Counsel, Vermont Cannabis Control Board)]: Okay. Okay,

[Senator Russ Ingalls (Chair)]: that sounds good. James Pepper, the Cannabis Control Commissioner is on vacation and I think we're gonna have Gabriel Gilman in his place. Are we ready to lead this discussion off or do we need to wait a few minutes to make sure we have everybody here?

[Linda (Committee Assistant/Staff)]: Is Gabe here?

[Senator Russ Ingalls (Chair)]: Yeah, don't see Gabe here, yeah. Okay. I wanna get away in a few minutes and we'll start. We don't need to go offline, we can stay online.

[Jesse Harper (License holder; Owner, Vermont Security)]: I think there may be a few people joining online Okay. As

[Senator Brian Collamore]: was also something we were gonna add into the mislingual.

[Senator Russ Ingalls (Chair)]: Yeah, that's that language. Remember James had all the language in there? The language that James had. I think we're all in agreeance. We've all been in agreeance of what it was gonna be. I think we're just doing one final check-in. So how are you? I'm good. How are you? Good morning. Good. Good. Good. Good morning to you. Okay. So I think we have everybody here. Is everybody online that's wanting to be in

[Linda (Committee Assistant/Staff)]: the is here.

[Senator Russ Ingalls (Chair)]: Okay. Do we have anybody else, Linda, that was gonna be online that you're aware of?

[Linda (Committee Assistant/Staff)]: That's Sam.

[Senator Russ Ingalls (Chair)]: K. Wait a minute to see if Sam jumps on. Maybe

[Jesse Harper (License holder; Owner, Vermont Security)]: John of Lily Hill is attempting to

[Senator Russ Ingalls (Chair)]: log in. Okay. Good.

[Linda (Committee Assistant/Staff)]: Graham is here.

[Senator Russ Ingalls (Chair)]: Trying to remember the day that we had so I can look at that language again. That's. Bradley, you're just going through it. Right? Yeah. We're gonna repeal this thick skin, whooping in it, move it over to tan or white.

[Senator Joseph "Joe" Major (Vice Chair)]: That's why you do that.

[Linda (Committee Assistant/Staff)]: Who do call John? I believe. I do.

[Senator Brian Collamore]: He's a hand

[Jesse Harper (License holder; Owner, Vermont Security)]: producer. Has been for years. Disgusting. Digiacepi, I believe.

[Senator Joseph "Joe" Major (Vice Chair)]: I think he's also a a license holder.

[Senator Russ Ingalls (Chair)]: Is Sam here?

[Linda (Committee Assistant/Staff)]: Yeah. Yeah. Okay. Everyone else is here.

[Senator Russ Ingalls (Chair)]: Yeah. Well, we've first time to come back and Find it, Brian? No. I

[Senator Brian Collamore]: remember what it was about, but

[Senator Russ Ingalls (Chair)]: I can't remember the specifics. Hemp and cannabis are now cross referenced in two bits of titles and three.

[Senator Brian Collamore]: Maybe David remembers. Which title is WIC with hemp and cannabis? They're different.

[Senator Joseph "Joe" Major (Vice Chair)]: Hemp is six, cannabis is seven.

[Senator Brian Collamore]: Six and seven. Okay. I

[Gabriel "Gabe" Gilman (General Counsel, Vermont Cannabis Control Board)]: can just pass these out.

[Senator Russ Ingalls (Chair)]: Oh, did the yeah, thank you. Thank you. That's all what kind of panicking about.

[Gabriel "Gabe" Gilman (General Counsel, Vermont Cannabis Control Board)]: Think Gates sent me one of these.

[Linda (Committee Assistant/Staff)]: Let me this first village. Oh, it must be all the way.

[Gabriel "Gabe" Gilman (General Counsel, Vermont Cannabis Control Board)]: Yeah. Okay.

[Linda (Committee Assistant/Staff)]: Here, sir. Side

[Gabriel "Gabe" Gilman (General Counsel, Vermont Cannabis Control Board)]: by side. Side by side. What used to be?

[Senator Russ Ingalls (Chair)]: Okay. I think we're ready to start. Everybody good? Yep. Okay. Who wants to come up and just for the committees and for anybody that's watching online, who wants to come up and explain why we're meeting today. We understand, but who wants to clutch that out just a little bit more so that we can have the most productive conversation? Good

[Gabriel "Gabe" Gilman (General Counsel, Vermont Cannabis Control Board)]: morning, Chair Ingalls and Committee. Thank you for having me. I'm Dave Gillman. I'm the General Counsel for the Cannabis Control Board. And I can walk you through what is proposed for you in regard to the current language in Title VI concerning the county and transferring it to Title and thereby creating a small regulatory program for hemp under control for cannabis control board. We've spoken with our colleagues at the Agency of Agriculture and we're saying we support this idea. So Wade, we got to where we are as explained by some papers that that Peppernan, our chair, had filed with you earlier that look a little bit like this, give you a history of hemp regulation. I will go through that in great detail, except to say that hemp in Vermont and elsewhere is a result of really two sequential farm events in 2014 created in pilot programs, and then in 2018, with lot of here to say commerce in hemp. That became complicated because of a loophole of the 2018 bill that allowed interstate commerce in relatively high THC intoxicating products that were derived from hemp. That became very controversial and the market for it really exploded over the years, especially following the COVID. But in the budget bill, in the federal spending bill, the re opening government in November, That loophole from 2018 was slam shut with a scheduled effective date of fifteen November this year. So the current federal statute would dramatically reduce the amount of the kinds of hemp products that could be in interstate commerce, but there's uncertainty as to what will happen between now and November as hemp interest lobby to have that changed or delayed. But right now, if nothing changes in November, there'll be a dramatic change that may affect the proposed, know, end the economic viability. It's a lot of different sort of system. So what we're trying to do is put the state of Vermont on nimble footing to deal with whatever may happen by November because we don't know. We have and you'll hear from some hemp growers and manufacturers, processors in Vermont that have a thriving business and are very interested in and concerned about what happens next. The state's agriculture department's hemp pilot programs are all closed now. So they had authority beginning at section five sixty one of title six that was written for them to administer those programs when the federal pilots were operating. The federal pilots aren't operating anymore, and they shuttered the program seven years ago. You just changed the sentence that said the Secretary Shao administer hemp program to the Secretary May administer hemp program, and there was close, really for lack of users. The hemp market had not been profitable at that point. There was not a great deal of there was nobody who administered to. That time, oversight of hemp growing, which the federal government oddly calls hemp producing. So you'll see growing, cultivating, producing used interchangeable, driving nuts. They all mean the same thing. But the hemp production, oversight of growing, was returned to the United States Department of Agriculture where it remains now. And so the effort today is to bring relevant sections of Title VI into Title VII, but we have to modernize them a little bit because two things have changed. First, the state no longer has the dominant role it used to have in overseeing or growing. That's with USDA. We still want to be in there a little bit, really just in case there's a suspicion that their overloaded plants basically cannabis based ratings. So you'll see a proposal to have a small credential $50 a year that would allow us basically to go on properly and test product just to make sure it really is hemp if we have suspicions. But otherwise we'd want little to do with growing that's being done competently by USDA. The folks that really need a regulatory home are the hemp processors, the people that take that hemp biomass and turn it into props. The process of doing that involves separating cannabinoids, the different chemicals in the hemp. One of those is THC, evidently. Trace amount of THC is gonna be there as will be compounds that are easily converted into THC. And so it is important that that be overseen. And these entities want regulatory help. They really haven't had one since the program shut down. And so what this proposes is that if the market is operational after November, we will be able to, the cannabis control board, be able to run a kind of state hemp oversight program that really does two things. One, it has all the growers registered with the CCV, we know who they are and where they are and we can make sure it's related to hemp. And then it has the cultivators registered with the CCV, or I shouldn't say, the processors who are on board manufacturers. We're registered with the CCB. That would really be the substantive focus of the program. We would be able to write rules about how they operate to ensure quality and purity, for example, periodic testing, that sort of thing. And they would have a legitimate place in the credentialing hierarchy. And I think that would comfort banks, the insurers and other business partners that have to do.

[Senator Russ Ingalls (Chair)]: And I want to just, my committee is very forgiving as far as me repeating myself, I don't always know who's listening or who's not listening. But we were at an event the other night where I had a beverage producer that had a hemp beverage producer and she chased me down through the place there. She really wanted to talk to me and she said, I want regulation. I want regulation. I need that regulation so that I can properly, know, again, as you said, counsel, to go to and make sure that all of my people who I have contracts with understand that I'm following all the rules and that they can invest in me and I can invest in them. I just want to further that with one little comment. This committee has worked very closely with Mr. Pepper and have enjoyed their relationship because what we really want to see is we have said to the Cannabis Control Board, don't let us decide what your regulatory process is. We don't want to hear about that. We want you to handle that. What we want to do is open this market up so that our Vermont farmers can grow more hemp product. We had a bad rolling out of hemp being produced in the state where a lot of people got hurt because there was no real process in place and no expectations about where this market would be. Now we're not producing enough hemp in this market, in our Vermont market, to where we have to import from out of state and we're actually almost really kind of violating federal law by some of that product coming in because it's too high in the scale of they're actually probably transporting marijuana. We don't want that and when I had this talk with this manufacturer, I said my goal is to, if you can go out and set up a contract with somebody that wants to grow 30 acres for you and that you agree to purchase that 30 acres in Vermont, that farmer has a guaranteed place, it was a contractual agreement between the both of you, and that farmer can safely grow that product, that's what we want. She said, But I want to let you know, just myself, it's not 30 acres I would need, it'd be 300 acres. That's what we are trying to get to, and I think we're there. We're glad to be a partner with you folks and just need the language so that when we report this on the floor, we get it through with no problems.

[Gabriel "Gabe" Gilman (General Counsel, Vermont Cannabis Control Board)]: Thank you, Mr. Chair. We're hopeful that this language does that for you. I know board member Harris had passed out to you a side by side comparison of the language in title seven, title six. We're in the middle column of sort of an explanation of why is it different. Yeah. And in some cases, you see things that were not carried over generally because those sections had to do with cultivation. We're not really doing that anymore. So what you're really looking at is that kind of three credentialed system, grower, processor, and product. Product is really important because of the enormous interstate market and the complete lack of quality and safety control of what's coming in. This would allow, and notably FDA, which usually is in the business of overseeing food safety and product safety in terms of consumer policy is off the scene, really. So if the state doesn't take up that role, nobody will, and we just wind up with kind of chaos about what can be sold where, no way to ensure that out of state produced hemp products that were sent into Vermont actually have the contents they were labeled with. Know, typically, I'm just making sure that happens. We would need the tools to do that, and the simple solution, really the only solution, is to require that each product be registered with us just like cannabis products are. Unlike cannabis products, these products would be sold at appropriate locations. Part of the science gave us rule making authority to say things like, okay, the hemp product with one milligram can be sold at city market or something, but only the person's coming to one or all of it. Right now, one of the most frightening things about the interstate hemp stuff is that if it's hemp, and it's not like the cannabis, it can be sold to anybody, an eight year old could walk into the store and there's no law that requires that the cashier say, No, I won't sell you that beverage. So this is an important formula for us to have in our toolkit in order to dictate things that just make common sense, like appropriate sites of sale, not a school, not a big sale, something to that. Make sure what's in the product is what the label says, and impose common sense requirements to make sure products aren't misused by humans. So that's sort of what you have. I'm happy to walk you through the DeGrove, or if you have particular questions about why you see what you do there in the line.

[Senator Russ Ingalls (Chair)]: I'm in Greer. You're good. Thank you, Mr. Chair.

[Senator Brian Collamore]: We will take a look at the provisions that apply in Title VI and move them to Title VII and delete the ones that don't apply anymore, as you said, cultivation. There's one issue that I don't if it's an issue. It has yet to be resolved perhaps, and that's the THC level, and that's highlighted on the on the pass out we got. So it's point four now. I'm just wondering whether, in a way, it would be more appropriate for the CCP to be able to not necessarily identify a level right now because the federal government may move that up or down, which would mean that we'd have to take another look at it and move that. Is it possible for the Cannabis Control Board to just be able to do through rule making sort of a sliding scale, if that's the right term Yes, for

[Gabriel "Gabe" Gilman (General Counsel, Vermont Cannabis Control Board)]: with regard to the intrastate market. If the federal government goes low and we go higher than they do in terms of our tolerance, there still won't be legal interstate commerce and banks and insurers and transporters won't touch the stuff. However, we basically do that in rule right now. The board back in 2023 saw this coming as these beverages start popping up everywhere, adopted an emergency rule, has now been adopted as their regular 2.17. That's where the current one point five milligram per serving cup is. There are a lot of other parameters we're not talking about, but the basic one is serving as defined by us, not by people that might like to say the right service of KF Coke or something, cannot have more than one point five milligrams. That is a creature of rule and it can be changed in rule. And of course that number could be overruled by this body, but I think it's smart that we've got pretty good troops that model successful cruises at the same time than other states.

[Senator Russ Ingalls (Chair)]: But do we need

[Senator Brian Collamore]: to say in harmony with federal guidelines all the time, or is that sort of

[Gabriel "Gabe" Gilman (General Counsel, Vermont Cannabis Control Board)]: understood? The latter. The state's definition of hemp is tied to the federal DHC Okay.

[Senator Russ Ingalls (Chair)]: All right.

[Senator Brian Collamore]: Both of them, that's the only question I have.

[Senator Joseph "Joe" Major (Vice Chair)]: I think it makes a lot of sense to do what they're saying together. And just so, what Senator Collamore said, whatever the federal government adjusted to, you adjusted immediately to that level.

[Gabriel "Gabe" Gilman (General Counsel, Vermont Cannabis Control Board)]: That's the cut between hemp and cannabis. Right. As you see the definition of hemp in the language before you, literally connects itself to the federal THC level of hemp. So that's sort of the definition of flow, with whatever the federal government Okay, perfect.

[Senator Brian Collamore]: Thanks.

[Senator Russ Ingalls (Chair)]: Counsel, what else? I think we've covered the big stuff.

[Gabriel "Gabe" Gilman (General Counsel, Vermont Cannabis Control Board)]: We're hopeful that this gives people a path forward for a while. This was an industry and some farmers that were sort of without a regulatory place, and I think felt all of that left behind while cannabis got built. And I think now we're catching up in a way that we hope is responsible. The federal landscape on this is very unusual. It's been unusual for seven years now. Right. But I think this language would put us on good footing to deal with whatever comes to the amendments.

[Senator Joseph "Joe" Major (Vice Chair)]: And and and I you just said something that just triggered something. You're much closer to to this than than than we are. Do you see any stability in the federal government?

[Gabriel "Gabe" Gilman (General Counsel, Vermont Cannabis Control Board)]: I don't know that any two people agree. Think if you talk to people in industry, and lobbyists in industry, they say, We're going to fix it. The fix is coming. It's not going to four tenths of a milligram, which would be the whole package left on the federal law. If you talk to people outside, they're a little less hopeful, and I could be a fuller today.

[Senator Russ Ingalls (Chair)]: Bottom line, when it's all said and done, and it's a very fair question, bottom line is you guys are poised to be able to adjust as it goes.

[Gabriel "Gabe" Gilman (General Counsel, Vermont Cannabis Control Board)]: That's exactly it. We want to build something where whatever happens, you know, we're kind of built for uncertainty and we can protect the monitors, but however it lands.

[Senator Russ Ingalls (Chair)]: Right. Perfect. You are in conversation with our counsel, Bradley Schulman, with this language and stuff or do you need my permission? Are you guys already talking because at the end of the day, again, all we want to do is, you know, you're going down through again, you know, really helps us when we have to report it on the floor. We're in total agreement. We're very happy to do our part to make this happen. It helps Vermont economy, helps Vermont farmers, helps Vermont industry. So we're very, very happy to be involved with that. But as long as you and Attorney Schulman are in good standings as far as you get the language to us, we are trying to shore up all of our sections by the end of Friday. I do know that we all understand that we have into next week so we can keep on tinkering and all that stuff. We're starting to go down through there just to make sure that we have a very large miscellaneous bill. Anything we can do to finalize the language that we have. I don't think, I know in this committee there's no disagreement. I just wanna go through and make sure that the folks we have on the screen, if you could stay with us, anybody that's on the screen have things to talk about and I would appreciate that. Okay. Thank you. Who else in the room might have any comment? I I'd like

[Jesse Harper (License holder; Owner, Vermont Security)]: to comment, but if it's okay, could we bring some of the folks that are online? Yes. Absolutely. And then

[Senator Russ Ingalls (Chair)]: Yeah. Absolutely. So why don't you drive that then? Okay.

[Jesse Harper (License holder; Owner, Vermont Security)]: Honble whoever is online. I don't know who is online, but

[Senator Russ Ingalls (Chair)]: Amy Lenz.

[Becky Castle (Owner, Sisters of Anarchy Ice Cream; Farmer)]: And Sam

[Senator Russ Ingalls (Chair)]: And Sam Belovance.

[Jesse Harper (License holder; Owner, Vermont Security)]: These are all stakeholders.

[Senator Russ Ingalls (Chair)]: Who wants to go first? Amy, Sam?

[Amy Lems (Owner, Vermont Organic Solutions)]: I'm happy to go if that works.

[Senator Russ Ingalls (Chair)]: Okay, go ahead. Just tell us who you are and what you do and the floor is yours, Amy.

[Amy Lems (Owner, Vermont Organic Solutions)]: Thank you, Chair. Thank you, gentlemen, for having me this morning. My name is Amy Lems and I am a current manufacturer of CBD topical products. My company is Vermont Organic Solutions. We make a couple dozen different products. We sell online and in multiple different locations in New Hampshire and Vermont. I'm also a former THC adult use manufacturer tier two, that I closed my business after two years of making a $100,000 each year in revenue, yet not being able to pay myself. A big part of the problem was getting products to market. And that unfortunately is going to be a problem for me here as well with the CBD topical products if they land under regulation from the CCB with what's being proposed going forward. I'm also a medical patient and have been for several years. Currently, what my business has to do to comply with regulation is we are required to comply with federal regulation with labeling transparency for customers, as well as not making any health claims. And we are required to label with each and every individual ingredient that's in the products. We are not required to register our products. We are not required to test every batch of our products. It's very expensive to go through a process where we will need to be paying a $75 fee per each product, as I stated, to register the products because I do a couple dozen products. Those fees add up quickly. So does testing each and every batch. That is not feasible. We are a small company. We work in micro batches. Adding an 85 plus dollar test for every batch would make our products unsellable. I'd like to talk about a little bit about some of the numbers that are in this proposal. The zero point four milligram THC, if you extrapolate the numbers, for instance, I have a three thousand milligram, four ounce jar of an arnica and CBD cream. Three thousand milligrams of CBD at 0.3% is nine milligrams of THC. So there are nine milligrams of THC in that product. They don't get anyone high. And I can say this with almost certainty without testing because when I was a THC producer, I produced both edibles and a topical. The topical was a six hundred milligram THC topical along with six hundred milligrams of CBD in that one jar. And it was a fairly slow seller because the THC made it expensive and it didn't get people high. And the CBD product that I made, that was a sister product, that was my product first before I got into THC manufacturing is so much more effective and so much less cost for the consumer that that product sells very well. Expecting a company as small as mine to pay $500 a year registration fee, $75 per product, would again put my products in a price range that would make them unaffordable. It is my belief that with how large the CBD industry is, the hemp industry in The United States, and with how large and quickly it's gotten so big, the intoxicating hemp industry is, I believe that pre November we will find some sort of separation between those two. They should not be under the same umbrella. I am a thousand percent for regulating intoxicating hemp products. I think they belong in regulation. I think that it would cause an undue regulatory and financial pressure on non intoxicating hemp producers to have to comply with yet unknown regulations that the CCB could require us, including they've proposed having all products available for testing and for inspection at the places that they're sold. How do we explain that to places that are chiropractic, massage therapy, grocery stores, general stores, mom and pop businesses that they are now going to be subject to inspection and removal of product for testing from their possession. That will I believe in very good faith encourage them not to buy the product if they are subject to those regulations. The other issue that I have concerns with is if we get to November and there is a ban that goes into effect, we will only be able to sell within the state of Vermont and it will keep our hemp industry going and allow us to continue, albeit very regulated. If this hemp ban does not go into effect and we are allowed to continue selling, except that in the state of Vermont, we are now regulated, they are knee capping us with these extra regulatory requirements and financial obligations. We would never be able to sell outside of the state of Vermont because of the fact that no one, no other manufacturer of these products is required to do the same things that the people in Vermont would be required to do. So Vermonters would be able to order and get shipped to them product that is cheaper, made by outside manufacturers outside of the state of Vermont, who can make it cheaper based on the fact that they don't have that regulation. For all of these reasons, I think it is to the detriment of hemp manufacturers, especially non intoxicating hemp manufacturers, to fall under this regulatory requirement.

[Senator Russ Ingalls (Chair)]: Amy, I got to admit that a lot of your testimony kept on bringing me back to it. This is exactly why what we're trying to do. That we're we're trying to get it to where we can have a clear distinction between intoxicating and non intoxicating and that there needs to be a limit at some point in time. We have that limit, we need to be able to regulate and to make sure that everybody's complying. Where am I going wrong?

[Amy Lems (Owner, Vermont Organic Solutions)]: What are you looking to regulate with a manufacturer of topical products? Looking to make

[Senator Russ Ingalls (Chair)]: sure that, hemp is not intoxicating and marijuana is. That's what I'm looking for.

[Amy Lems (Owner, Vermont Organic Solutions)]: And every liter of CBD, full spectrum CBD that I order comes with a verified COA in it to show that it has that less than 0.3% THC. It comes with that COA. To prove my formulation abilities, I happily will submit one of my products to show that I know how to formulate a product to get what it says on the label in the jar, but to require that repeatedly year after year is an undue responsibility and financial strain. No products, zero products in The United States, none have to go through any testing whatsoever, there is no chemical regulatory board, there is nothing that regulates any topical product whatsoever in The United States. So why would this one product that is not intoxicating, that is a topical, not an edible use, require regulation? It doesn't make a lot of sense.

[Senator Russ Ingalls (Chair)]: Because I think there's a lot of federal part of this that that they require that they need to know and there's a lot of these markets that are outside of Vermont that people in your industry want to be able to ship to with the sureties that you are complying with federal law

[Amy Lems (Owner, Vermont Organic Solutions)]: and currently, we are complying with federal law.

[Senator Russ Ingalls (Chair)]: That and not to be confrontational with you, and that's not my extent, I'm just trying to understand it. That's what you're saying. But how how do they know? How how do they know for sure that you are complying without an agency there to put their seal of approval on it that you are.

[Amy Lems (Owner, Vermont Organic Solutions)]: How do we compete when no other state is requiring these kinds of regulations on that type

[Gabriel "Gabe" Gilman (General Counsel, Vermont Cannabis Control Board)]: of product?

[Senator Russ Ingalls (Chair)]: I think you would compete very well that people knowing the product that you're producing is verifiably where it needs to be in the marketplace and that could be sold to the intended market it's supposed to be sold to.

[Senator Steven Heffernan (Clerk)]: There's Senator Heffernan. So the intent for the testing is if there is an issue. It doesn't mean you're gonna be tested all the time. If the cannabis board got a complaint that they felt that whatever product they were using seemed to do something. That gives them the right to say, we need to come in and take a test of your product. That happens with beer, that happens with, that happens with any- Fertilizer, it happens with Greg. I don't- It gives authority to be able to check it if there is a problem. If you're doing everything by the rules, you're shipping out your product. You already said you watch what you ship in your products, so it's really not a concern to you unless something happens and then it's a safeguard for you. I've been following the rules. So I understand that you don't want it regulated, but be able to go and get backing from banks and all that, they're gonna want, you know, that you being able to follow the law. It's no different than me and trucking that, you know, I gotta keep my trucks hauled up to the guard and

[Senator Russ Ingalls (Chair)]: the DOT pulls me over,

[Senator Steven Heffernan (Clerk)]: they're gonna fine me if everything is not right. And it's kind of the same concept. So I understand why you're saying you don't want it to be, but we need it to protect you if you have competition that is putting weight more, is actually putting THC in it, and you go, They need to be tested because they're not doing it right.

[Amy Lems (Owner, Vermont Organic Solutions)]: This mechanism's already in place. If a consumer uses a product and there's a problem, there's the FDA. They write a letter. The FDA then investigates that product, has it tested, and sees what's going on. So this mechanism is already in place. You're proposing that we double down on it, but we would be the only state. What I'm saying is you are kneecapping businesses in Vermont with this excess regulation on products that are non intoxicating and that are topical use. We won't be able to compete price wise

[Becky Castle (Owner, Sisters of Anarchy Ice Cream; Farmer)]: and we won't be able

[Amy Lems (Owner, Vermont Organic Solutions)]: to sell outside of the state.

[Senator Russ Ingalls (Chair)]: First person that we've had through all of this, we've been dealing with it all year long and I get it that there might be a bunch of people out there but you're the first person and so this is why it's in a little bit of disbelief to us. You're the first person that's come forward and said that you're not in favor of this. That that's why we're trying to get to where the objections are.

[Amy Lems (Owner, Vermont Organic Solutions)]: I am a 100% in favor of regulating intoxicating hemp, 100%. I see no reason, legitimate reason to regulate non intoxicating hemp, especially in the application of a topical product.

[Senator Russ Ingalls (Chair)]: So let me just clear it up in my brain just one little bit. Who is going to determine whether you're intoxicating or not? Where is the regulation within the state of Vermont on a Vermont based product that's going to make that determination whether you're intoxicating or not?

[Amy Lems (Owner, Vermont Organic Solutions)]: My COA shows that I'm below that twenty eighteen.

[Senator Russ Ingalls (Chair)]: Where's the the where's the regulatory scope of it so that people, that are, companies and banks and and insurance companies and and all of that, where can they go to to make sure that, other than your word, because again, as honest as a person as you are and because I would not say otherwise that you're not, but where does the regulatory process guarantee that you are following the rules?

[Amy Lems (Owner, Vermont Organic Solutions)]: Where does any state's regulatory process guarantee that any product manufacturer is following the rules? Again,

[Senator Russ Ingalls (Chair)]: That's this is where I disagree with you. They are regulatory all the way through of every product, especially a product that could be consumed by humans. I do believe that they are regulated in such a way to protect the public and to protect the integrity of the business.

[Amy Lems (Owner, Vermont Organic Solutions)]: Please enlighten me. Tell me where these organizations are or what states they're regulating this because I am unaware of any federal or state that regulates ingredients and does

[Senator Russ Ingalls (Chair)]: I keep thinking of anything that we're producing in agriculture or being used in agriculture that isn't being regulated by the state of Vermont.

[Amy Lems (Owner, Vermont Organic Solutions)]: That's a consumption product. This is a topical product.

[Senator Russ Ingalls (Chair)]: Pertilizer. They go in to make sure that what's being applied on the fields. Mean just on and on and on it goes. I'm going to switch to another witness just for a second. Mr. Belovance has his hand up.

[Sam Bellavance (Sunset Lake CBD)]: Hi everyone. Sam Belovance here from Sunset Lake CBD. I'm a farmer in South Hero, been growing hemp since 2018. I apologize I can't be with the committee today. I'm calling in from a hotel room in Florida right now. Get to the point. I think I can provide some clarity here to this conversation and happy to do so here. I think, you know, to get to a concern, I believe Senator Collamore had expressed earlier about having this 0.4 number in this statute. I think what we're seeing here with Amy's comments is, you know, an expression of what my concern was, that we've had this emergency rule in place that defines intoxicating products at one point five milligrams, and producers, you know, such as Amy and many others who aren't in this room, they're going to see that point four and then get really confused. Okay, I've been thinking my product was non intoxicating hemp. Now I'm seeing a statute that says it is. So I think that would be, you know, one potential compromise solution that I was thinking of and kind of going off of what the general counsel's comments were around floating the Vermont level based on what we see in federal regulation. If we look at the sections of the bill here that state the zero point four milligrams, actually striking that zero point four milligram THC and then replacing it with all hemp products determined to be intoxicating by board rules. And that would maybe provide one some flexibility that the board could continue to draw that line between what is an intoxicating hemp product essentially it's cannabis posing as hemp and what is a CBD product, maybe like a topical lotion Amy's making. So I think maybe replacing that point four with, you know, the board to draw that line in rules would maybe alleviate some of that confusion and still get at, you know, the kind of goals the industry is searching for, and what the cannabis control board is searching for. So that would be one potential solution, I think, that would maybe clear up some confusion here.

[Senator Russ Ingalls (Chair)]: Councilor Gilbert. Thank you.

[Gabriel "Gabe" Gilman (General Counsel, Vermont Cannabis Control Board)]: If I if I could clarify, I think there's a pretty crisp answer to it. The point that this is a question that's come up for people saying, well, if you don't know that the feds are gonna land on point four per, you know, per packet, Why you putting that in the statute? It's actually two for exactly the reason miss Lambs was talking about. If you that the point four that appears in what would be section eight fifty three is the cut at which a manufacturer has to register with us at all. It isn't the cut of what has to what can be the product. So, you know, 1.5 products are lawful under 1.1 under under 2.17 our current rule. However, what we can't do as a bureaucracy is just take people's word for it. You know? Say, well, self identify.

[Senator Joseph "Joe" Major (Vice Chair)]: If you

[Gabriel "Gabe" Gilman (General Counsel, Vermont Cannabis Control Board)]: say that you're not putting out intoxicating stuff, don't register. We've gotta register folks below that. Otherwise, we won't be able to verify anything. But that point four milligrams makes a really good cut point for true trivial THC content. And so that gives a fortunate answer to this lens. If she doesn't want those CBD products to be regulated at all or registered, all she has to do is remove the THC from them. It's only if there's nontrivial THC in them that this regulatory apparatus would get its hooks in any of it. It's also the case, and I want to point out, people were concerned this will disadvantage. I have my doubts that it won't work the other way. An enormous number of hemp nominal hemp products, we have no idea what many of them are, are coming into the state and reaching our consumers, you know, the whole national market. If we in Vermont require that each one of those products be registered and approved by us with a test done for that product by a lab we know we can trust. Exactly. And it protects Vermont. And the material thing is here, we really do have a dangerous situation where stuff that says it's CBD, nobody has the first idea what's in all of it. So that's why product registration is important. But the I do wanted to explain that point for is the point at which you don't have to do anything with the government at all. If you have less than point four milligrams THC in your product, you don't have to register with us. None of this stuff would apply. And so there is an out for people like Ms. Lambs who wanna make CBD products. They just have to take the the THC completely out.

[Senator Russ Ingalls (Chair)]: Right.

[Senator Steven Heffernan (Clerk)]: And is that a

[Senator Russ Ingalls (Chair)]: hard

[Senator Steven Heffernan (Clerk)]: to do, take the TCA, take it out? No,

[Jesse Harper (License holder; Owner, Vermont Security)]: I mean, they're coenzymes, I would say. You'd have to really highly refine that. And one thing that Amy was distinguishing is the difference between topical and ingesting.

[Sam Bellavance (Sunset Lake CBD)]: Very different. I think

[Jesse Harper (License holder; Owner, Vermont Security)]: there is a fundamental lack of understanding. Go through your office. I'm sorry, I'm Jesse Harper. I'm a licensed holder, also a local businessman. I own Vermont Security, I guess a serial entrepreneur, family man. Lived in Vermont the whole

[Senator Russ Ingalls (Chair)]: night. There

[Jesse Harper (License holder; Owner, Vermont Security)]: there's a there's a fundamental lack of understanding of some of those core understandings around, like, THC, CBD, how they impact, how they don't, and in order I don't know how a gentleman would make solid decisions without a little base of that understanding. And I I think that that is really relevant to bring to this at some point is and and I think that goes with the legislative body as a whole. How how can you there's there's nuance to everything in life. And if if we oversimplify things, we don't really know what we're doing. And I think that's one of the points that that she's making, and I think there's also a disparity in, you know, what might be of interest for a larger producer and a smaller producer in in every industry, not just this

[Senator Russ Ingalls (Chair)]: one. Amy?

[Amy Lems (Owner, Vermont Organic Solutions)]: Yeah, I would like to address the situation with the point four. First of all, I use full spectrum CBD because of the entourage effect. It simply makes it much more effective to have that 0.3% THC that falls under the Farm Bill threshold. The other issue is zero point four milligrams of THC. Again, if you extrapolate this out, the maximum amount of CBD in any product that I would be able to put is one hundred and thirty milligrams of CBD. My three thousand milligram, four ounce CBD product is an average amount of CBD in a product. One hundred and thirty milligrams is not going to be effective, and using a CBD isolate as opposed to full spectrum is not as effective. There's research to show this.

[Senator Steven Heffernan (Clerk)]: Now, we talking a cream? Yes. Okay, so can't we separate out oral or, yeah, oral from, can we do that in the board? Say that creams and stuff are not subject to this and edibles and-

[Senator Joseph "Joe" Major (Vice Chair)]: digestibles, I guess. I to

[Senator Russ Ingalls (Chair)]: add to that. Where does that stay at the federal level if you do that? Are you impacted at the federal level, is kind of, counsel, go ahead.

[Gabriel "Gabe" Gilman (General Counsel, Vermont Cannabis Control Board)]: The current, the federal language that would close the loophole does not distinguish. There's a kind of a reason for that in the sense that it's easy to label something for topical use that is consumable and just say, well, the customers are misused. Don't think anybody on this call would do that, but, you know, that's the regulatory reason, I think. But more important, we further to the chair's points point at the beginning, the point of this legislation that's before you right now is to move authority to make the micro decisions. It's not to make the micro decisions. And so, of course, in rulemaking, it it behooves nobody, not us, not anybody, to be requiring gratuitous testing of safe products where there's just no coherent reason to demand it. We know that point four is there because we do not want to be the overseers of hemp lip balm. You know, we want stuff that has some THC in it. And if it doesn't, we don't wanna bother with it. And we also have the regulatory flexibility in rulemaking to address the nuances miss Lemm is talking about. Of course, a topical is less hazardous than an adjustable. But we can recognize that in rulemaking. We don't have to subject them just cluelessly to the same requirements. They're distinctions that, you know, I can assure you, will be made appropriately so we don't waste our time as well.

[Senator Russ Ingalls (Chair)]: Caso, I think you made an excellent point. Again, and brought the levity back to where we're at, is that we're not making rule decisions in here. We're just moving decision making from one section to another so that you can continue on with your work within the state.

[Gabriel "Gabe" Gilman (General Counsel, Vermont Cannabis Control Board)]: That's an excellent way to put it. And I I think I might say paraphrase that again to say, just because it would be within our jurisdiction and registered doesn't mean it has to be subject to the same degree of product scrutiny as every other product, including those that are bumping right up against the 1.5 wall. We can use common sense there. There's not a there's space space.

[Senator Brian Collamore]: I've just been kinda quietly listening. But as I started to think this through, think there is a problem from what I'm going to suggest. Is there some area of consensus? As soon as you take out of state and Vermont businesses and try to draw a line, I think you're gonna follow ICC regulations with What I was gonna suggest is that Vermont farmers have an easier, clearer path with maybe less fees and maybe less regulatory oversight so they only have to register, and then that's it, unless there's a problem. I don't know whether that would satisfy any, and I don't know what the right fee schedule is either, but I'm guessing that as soon as you say, Yeah, but if you're out of state, you're going to face different schedules, and that's probably going to But I also think

[Senator Russ Ingalls (Chair)]: again that this committee really has crossed the line or can cross the line by determining what the cannabis control board is going to do when it's all said and done because we're not in that decision making. All we're doing is allowing the transfer of rule making from six to seven, and then whatever happens after that is really not our decision. That's where we've been very clear right from day one is that we have been saying, I don't want to be involved with the rule making part of it because it also gets into other committees in this building. I want to let Vermont farmers grow hemp and that's where I want to be at and cannabis control board does the rule making. I just don't want this committee to be in part of that. We're not qualified to do it. We're not equipped to do it. And I think that there's other people that are better suited to do it. Sam, You're muted.

[Sam Bellavance (Sunset Lake CBD)]: Thank you very much. Sorry about that. Yeah, and I certainly would second the Chair's comments. Do think it's appropriate for the cannabis control board, you know, to be getting into the minutiae of these issues. And again, that's why my suggestion would be to strike that point four and not have the Senate committee setting that level and really defer to, okay, have that limit be determined by the board's intoxication definition. So I think we've talked that issue quite a bit out, so I want to move on to just my second comment, which is on the fees. I believe that was discussed earlier. And before I get into it, I just want to state, like I said last time in my previous testimony, I do think overall this is a good bill and I think the cannabis control board will do a good job of regulating this market. This is just constructive feedback from my standpoint as a farmer who's been growing hemp for seven years now. The fee there is $75 per product. If we look there, I myself, if I'm looking at my CBD products, I have 66 individual products. So that would equate to $4,950 per year in product registration fees. This would also and to get to believe one of the other members of the committee had a question on testing. The way testing traditionally works in the cannabis market and I believe would work in this hemp market, testing is not done in an investigative sense only. It's also done as part of the product registration process. So in order to get a product registered in Vermont's recreational market, you need to complete that testing as part of that registration process. For us, testing per product, it averages at around two fifty dollars per product. It can be higher, it can be lower. So if I'm looking at my 66 products here, I'd be looking at about $18,750 a year in testing and $4,950 in fees. Currently none of that is required for hemp products. So I think that's something we should really think about, you know, is that we're getting close to $25,000 Currently, we're requiring $0 there. That's quite a jump for producers. So, you know, I'm in support of all the testing requirements. I think personally the $18 on testing is money well spent. I want to make sure our products are safe. I want to make sure they're compliant. But I do think that $75 number, maybe it could be changed to $75 for a three year registration, which would get the cost per year down, but it could also accomplish the board's goal of having eyeballs on each of these products. But I think there's some work to be done.

[Senator Joseph "Joe" Major (Vice Chair)]: Can you can you just repeat that that last statement again?

[Sam Bellavance (Sunset Lake CBD)]: Sure. I I think a potential compromise could be changing that from $75 for an annual product registration to $75 for a three year product registration. And what I like about that, one, it makes things more affordable for investors. It averaged about $25 per year. It also saves money for the board because I really think we want our cannabis control board doing their due diligence on highly intoxicating cannabis products. Do we want to have our staff spending a lot of time looking through CBD, skin creams, even if they have trace amounts of THC, these products are not posing a level of danger to the people like a vape cart would or infused with cannabis oil would. So I think there's just a level of prioritization. For the committee's reference, to register an intoxicating adult use cannabis product is $50 So it would be setting the registration fee for a product higher than it is for a cannabis product. So I just think we need to figure out some solution, either keep that 75 and make it a three year registration or if we lower it to 25, I would be open to either approach. But I would love to see some work on that. Thank you very much.

[Senator Russ Ingalls (Chair)]: Well, you gentlemen have heard that. I think that Go

[Senator Joseph "Joe" Major (Vice Chair)]: ahead, please. I'm sorry. The other fee that was a little bit do you have 66 products? Did did you have a were were you good with that fee structure? Or Well, that's sort of. No. No. The registration fee itself, $75 for over three years. But for each product

[Senator Russ Ingalls (Chair)]: $18,000 for each product that

[Senator Joseph "Joe" Major (Vice Chair)]: you were doing. Was 18,000 for EMS total for each product?

[Sam Bellavance (Sunset Lake CBD)]: Yeah. And and again, I'll send this all to committee in writing. Okay. We have Great. It would be so for 66 products, 75 per year works out to 4,950 per year. The product fee and then the actual hemp license fee, I believe the processor fee, what is that $500 To me honestly, 500 is very reasonable. I have no complaints there. I think that's just something we need to think about that product we typically could use some more.

[Senator Joseph "Joe" Major (Vice Chair)]: Thank you. Thank you, Sam. I appreciate it. If you can send that, that's very helpful. We I I the the last thing that we wanna do is hurt in in that. We wanna probably cover our couple costs to to do some of the administrative work and things of that nature. But above and beyond that, think we don't want you to fund our education.

[Senator Steven Heffernan (Clerk)]: As far as products go, producers, we put a because we have small producers and more like yourself saying that a larger producer, is there a way we could structure the fee for the small producer, like I don't even do, you know, £200 a year and have their fee,

[Senator Russ Ingalls (Chair)]: don't know if

[Gabriel "Gabe" Gilman (General Counsel, Vermont Cannabis Control Board)]: that's a

[Senator Steven Heffernan (Clerk)]: reconstruction for small producers and then scale it up.

[Gabriel "Gabe" Gilman (General Counsel, Vermont Cannabis Control Board)]: You could. I wanna, I, is it okay if I Please. Just wanna, senator Collamore made a really important point about the dormant commerce clause and the principle that we can't discriminate against out of state business. Right. But we can have consistent rules that make sense for Vermont. And I just wanna point out that we're imagining that the median payer of that $75 product registration is going to be a domestic company. That's not how it's going to work. Most people paying that will be out of state large companies moving hemp products into this state that we otherwise can't have any idea about the content of. That may accrue to the benefit, especially because of our relatively small market, that may accrue to the benefit of our domestic companies. That isn't the intent of it, but it certainly could happen. So you and to your point, senator Heffernan, yes, it is possible to say if your business is of a certain scale, you pay a lower fee. It would be challenging for us to verify that without state businesses. That's all.

[Senator Russ Ingalls (Chair)]: I'm going to, committee. Amy has one. Amy, go ahead.

[Amy Lems (Owner, Vermont Organic Solutions)]: I just wanted to, point out two things. One, my business that sells CBD topicals, our total revenue per year is about $25,000 Sam, I'm estimating that your hemp business is in the hundreds of thousands of dollars, if not new. And so there is a very big difference between a micro business like mine and a large business like like Sam's. The other issue is in this document, it defines me as a processor. I don't grow any hemp. I don't extract any hemp. I take hemp oil, CBD, crude, and I use that as an ingredient in my manufacturing and formulation. So I think it's not addressing a small company like mine, and it's certainly not giving me the correct designation as to what I am doing.

[Senator Steven Heffernan (Clerk)]: Can it be gross sales? That way the out of state companies, you guys say, hey, what's your gross sales events?

[Gabriel "Gabe" Gilman (General Counsel, Vermont Cannabis Control Board)]: That's an interesting question for us, so I kinda feel I have to try.

[Senator Steven Heffernan (Clerk)]: Because like that, that will help define your producer that produces 20,000 to 20,000,000. He's gonna be a lot different.

[Jesse Harper (License holder; Owner, Vermont Security)]: Currently, the cannabis control board for cannabis licensees, there is a tier structure.

[Senator Russ Ingalls (Chair)]: The

[Jesse Harper (License holder; Owner, Vermont Security)]: fee structure is very different from small to big, and as are the regulatory requirements. For example, the security requirements are much lower for a tier one producer, and that's one of the things the CCB did really well in establishing different tiers and requirements and financial burdens as such.

[Gabriel "Gabe" Gilman (General Counsel, Vermont Cannabis Control Board)]: I think the the explanation for that is that the reason we don't have tiers is we're out of the growing business. USDA is doing that. When we had tiers, it was generally for cultivators, it was about how much square footage they had to cover. Here, that's irrelevant to us. USDA is overseeing it. So we just take that $25 or whatever the registry gives. Well,

[Senator Russ Ingalls (Chair)]: I think this is where this committee is at. We are, as far as the language to get over to what the Governor's Control Board is looking to do, that we would be in pretty full agreements with that, but I do think that there's some more work left to take care of some of this fee structure. I think Amy brings some concern in, again, the ways that she's defined herself as what her business is. We have taken great pride into protecting the smallest of the small as well as the largest of the large. And I hope that the cannabis control board will take with what they've learned today and be able to have some discussion fairly quickly to see. Our intent is to make sure that by the end of next week, well we got next week off, but the end of the week after that is to report this bill out and to this part of the bill. Hopefully we can get back together and see where some of the work has gone. I do really want to stress that this committee wants to stay out of the policy discussion as much as it can. And where we're gonna be in that discussion is going to be where it impacts our farmers, our producers, and so I don't want to be forced to get into that discussion. I just hope that it can get there within the cannabis control board. We really want to stay on that. That is the agreement I made with Pepper, James Pepper, the part that we do not want to be in your business. We do want to protect farmers.

[Jesse Harper (License holder; Owner, Vermont Security)]: Wait. Actually, we heard from some of the other folks online.

[Senator Russ Ingalls (Chair)]: Is there still time for that?

[Senator Brian Collamore]: We're actually were Perhaps the brand.

[Senator Russ Ingalls (Chair)]: Yeah. But we didn't know they were there, so I apologize. So we're gonna have to go. But if

[Senator Steven Heffernan (Clerk)]: they can send in testimony?

[Sam Bellavance (Sunset Lake CBD)]: Yes,

[Senator Brian Collamore]: absolutely. Yeah. Okay.

[Senator Joseph "Joe" Major (Vice Chair)]: And as you as you see us, we're trying to get as much information as well. It's they can send it in.

[Senator Russ Ingalls (Chair)]: We wanna thank everyone very much. Very helpful discussion, very helpful for this committee to hear everyone, and we're gonna call it a day.