Vermont Legislature SmartTranscripts:

[Brent Ziegler, candidate for Adjutant General of Vermont]: Your time, and if we have any time left, I'll take some questions that you may have. So my name is Brent Ziegler. I began my military career at age 17. So I signed the dotted line to join the military three months before I graduated from high school. I have served almost five years as an enlisted soldier, and for the remainder of my career, I've served as a commissioned officer, leading units of various sizes and being appointed and working at various directorates in the Joint Force Headquarters. I am campaigning to become the Adjutant General because I want to be a voice for the service members, their families, veterans, and the Gold Star families. I believe our national guard must be ready, resilient, trusted by our communities, by our appointed and elected leaders we serve. I have zeroed down on my experience, my values, and my lifelong commitment to service uniquely qualified me to lead the Vermont National Guard into its next chapter. As a 50 year old military officer with more than three decades of service, I bring a broad and balanced perspective. I have served as a senior logistics officer, gaining experience in supply, maintenance, and transportation. I've also served as a human resource officer and deputy military personnel officer. In my role as the human resource officer, I served both the Army and the Air National Guard. I developed a deep understanding of the Air National Guard operations and talent management, while building enduring relationships that continue today. I have worked side by side with both the Air and Army service members, and I understand how our components integrate to accomplish our mission. I have been directly involved in planning, coordinating, and executing state missions that protect lives, safeguard property, support our communities when they need us the most. At the same time, our National Guard must be ready to serve beyond our state borders. Our service members deploy across the country and abroad, supporting federal missions and national defense requirements. I have led these efforts at the tactical and operational levels to ensure our forces are trained, resourced, and prepared to answer every moment. Now, throughout my career, I've led with presence and accountability. While senior leaders must set strategy and manage resources, I believe effective leadership also requires visibility and engagement at every level of our organization. I have worked shoulder to shoulder with our service members in the field, understanding their challenges firsthand, and ensuring that decisions made at the top are informed by realities on the ground. This approach builds trust, improves readiness, and delivers results to the people we serve. I also had the privilege of supporting our service members, their families, Gold Star families, and veterans as president of the Vermont National Guard and Charitable Foundation. I am a veteran myself, having deployed in Iraq in 2005, and I understand firsthand the sacrifices, hardships, and strain that deployments bring upon the service member and their loved ones. As the Adjutant General, it would be my honor to represent them on a larger scale and be their advocate. Today, I serve as the senior operations and training officer responsible for ensuring our units meet training requirements for both federal and state missions, leading responses to natural disasters, and maintaining a high state of readiness across the force. I will not obey an unlawful order. Say that again, I will not obey an unlawful order. I will disobey, I will not disobey a lawful order. If elected as Vermont's next adjutant general, I am committed to leading a transformation era based on value based leadership, One that prioritizes the well-being of our service members and their families, strengthens recruitment, improves retention, enhances disaster response and combat readiness, and builds a professional, trusted organization grounded in integrity, selfless service, excellence. I have six goals and objectives I'm going to present to you today that will be my guide rail for setting priorities and executing duties during my tenure at 11. First, service member well-being and work life balance, in order to foster a guard culture that supports service members and their families through a holistic health approach and career development. Second, foster a value based culture and organizational trust by ensuring service members serve with integrity, excellence, and exemplify selfless service to both Vermont and the nation. Third, institutional and civic alignment. Through the advancement of our state partnership program and volunteerism, that results in collaboration and communication with a shared purpose, transparency, and mutual support. Fourth is strengthening our forces, and that's by cultivating a professional skilled and resilient forcing, a culture of purpose, belonging, and long term self-service that helps with workforce development. I want to resonate with the thought of work here, learn here, live here, stay here. Fifth is disaster response. That's by strengthening the guard's capacity and abilities to respond effectively and plan for future events. And I have eighteen years of my thirty three years experience with firsthand knowledge being a soldier on the ground responding, Hurricane Irene into the flood responses, the warming shelters in Vermont, and then also in just planning those efforts. As a G3, I have that responsibility to direct and task units to ensure that we respond appropriately to citizens of Vermont. And then the last one is ensure combat readiness, and that's by maintaining our training programs that have proven effective base effectively based on past deployments, but ultimately ensure service members are properly trained and equipped. So for the last thirty three years, I've devoted my life to serving alongside fellow service members in the defense of our state and our nation. If elected as your next Adjutant General, I will bring that same level of commitment to earning your trust and providing you as legislators the confidence that your National Guard is well led, accountable, and prepared to meet every mission. I've always been all in for the organization and the people who serve it, and I will remain all in regardless of the outcome of this election. And for that, I sincerely thank you for your consideration.

[Sen. Andrew Perchlik (Chair)]: Thank you. Thank you. You had mentioned retention. I've heard a lot about recruitment over the years, but I haven't heard anybody mention retention, like problem, like the stats, or just you just always get room for food? Sir, for

[Unidentified committee member]: us, when we talk

[Brent Ziegler, candidate for Adjutant General of Vermont]: about strength of the guard, it's a two part equation. Part of that's retention, and a part of it's recruitment. Our retention is actually very well. We were above the national average, but you know, there's still that certain percentage that are deciding to leave, and for us that's not our standard. We want to retain everyone up to the point that they feel like they've met their purpose in joining the organization. So there's always room for improvement, but our retention is very good.

[Sen. Andrew Perchlik (Chair)]: Is it two or two years they got to resign or to spend that time by different breach?

[Brent Ziegler, candidate for Adjutant General of Vermont]: Very good question, sir. Generally speaking, for me, when I joined, raised my right hand, he's a private in the Kansas Army National Guard, you sign up for a six by two enlistment. So you have a six year commitment to attend all drills and annual training, and then there's an option for you to basically go ING for a couple of years. I had a, for the most part, most people have a six year commitment. But once you're in,

[Sen. Andrew Perchlik (Chair)]: when you're trying to retain people, when you're asking them why stay, are you asking for those are the two year increments? So after that

[Brent Ziegler, candidate for Adjutant General of Vermont]: they can sign up for six months, like one year, two years, we do try to get their full commitment for another six years if possible, and a lot of that happens because of benefits, which you know, there's room to work there to help out with the retention fees, but benefits help out with recruiting too, so yeah, it bears.

[Sen. Andrew Perchlik (Chair)]: And do you have any ideas to how you would improve recruitment?

[Brent Ziegler, candidate for Adjutant General of Vermont]: So one of the, so that's necessarily one of my objectives. I would, I want to get back out and start doing town halls in communities, And I feel like we have been put in a place where from a facility management perspective, money is getting very tight and so we're building regional readiness centers. That's drawing us out of those individual communities out there that over the years have been the basis of our recruitment. So if we're going to withdraw ourselves, not by our decision per se, but it's financial reasons, we have to get ourselves out in community. We can do that, me being a face, some of the other senior leaders being a face and talking to community members about what we do, giving them that trust and confidence and understanding about the guard, and also getting our training members out. You know, we can work out compacts with certain landowners or the city's towns, and we can do training. Let people observe what we

[Sen. Andrew Perchlik (Chair)]: do.

[Brent Ziegler, candidate for Adjutant General of Vermont]: Give them an opportunity to ask us questions about, oh, we observed this, or, you know, we had questions about this, this, that or another about the military. So it's us getting ourselves out there that needs to happen. I further feel like, you know, there are other opportunities that some of our service members are young, the youth in the city, in the state rather, they're looking around at other states' educational benefits, know, name the benefit, and they have better options in some cases than what Vermont provides. Raising the conversation about can we do better in what we provide to help out with our recruiting and retention. So those three things are kind of on the forefront of my mind on trying to improve our recruiting.

[Sen. Andrew Perchlik (Chair)]: Good, good to you. Any other questions? Thank

[Unidentified committee member]: you.

[Sen. Andrew Perchlik (Chair)]: Thank you. We have here, George.

[Brent Ziegler, candidate for Adjutant General of Vermont]: Yes. So I presented in front of you my, basically, campaign brochure, and there's a reminder of some of the talking points that I presented to you today. Also, little bit about my bio. I didn't tell you everything about me, but there's some additional information there. And then in addition, finally, there's contact information for myself and my campaign team. So if you have any questions that may arise in course between now and election day, then by all means, please reach out to me. I'd be very happy to meet you one on one or with the group of constituents that that you wanna want to get in long term. Just like the

[Sen. Andrew Perchlik (Chair)]: next couple of weeks. When do we do this? I can't remember.

[Brent Ziegler, candidate for Adjutant General of Vermont]: I believe, my calendar says February 19. I don't know the exact time, but February 19

[Sen. Andrew Perchlik (Chair)]: is right. Yes. Well thanks for your time and your service. Perfect. Stepping forward for this position.

[Brent Ziegler, candidate for Adjutant General of Vermont]: My privilege and an honor, and I'm doing this for the service members, so I thank

[James Pepper, Chair, Vermont Cannabis Control Board]: you for the opportunity to have a special occasion. Thank for your rest of your day, and

[Brent Ziegler, candidate for Adjutant General of Vermont]: have a great weekend.

[Sen. Andrew Perchlik (Chair)]: Okay. So change his peers, back to the budget adjustment act, and the board. I'll let you introduce yourselves. I think you don't have a lot in your budget adjustment this year. We

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: did not.

[James Pepper, Chair, Vermont Cannabis Control Board]: Relatively straightforward, So for the record, my name is James Pepper. I'm the chair of the Cannabis Control Board, and I'm joined by here.

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: Yes, Olga Fitch, and I'm the executive director for the board. And we do have a PowerPoint presentation I just requested to share. You have a cohost's permissions. Okay. Can share. Perfect.

[James Pepper, Chair, Vermont Cannabis Control Board]: So this PowerPoint gives a snapshot of the market. It is brief. Some of

[James Pepper, Chair, Vermont Cannabis Control Board]: the work we've done over

[James Pepper, Chair, Vermont Cannabis Control Board]: the last year, some of the kind of trends that we've been seeing. We can just jump straight to the last slide, which is the budget adjustment piece. I would Give us a

[Sen. Andrew Perchlik (Chair)]: quick update. Okay. It's not on.

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: Yes. I'll

[Sen. Andrew Perchlik (Chair)]: Just don't give it to us again. We'll just come back to your question.

[James Pepper, Chair, Vermont Cannabis Control Board]: There you go. Things change pretty quickly in December. Yeah. So We'll have a whole new set of facts that we're gonna share with theocratists.

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: We'll try to be consistent. So, yes, as the chair noted, we'll start with a brief marketing update. Pat Shong Song, he maybe sort of highlights of what our agency has accomplished in this last year, and then finish with a budget adjustment request for your consideration. So on this first slide, you're looking at the chart showing our, showing the total number of our active licenses dating back to July 2023 through the month of December. You could see the world trajectory, and it includes a noticeable bump between the 2024 and early twenty twenty five in the number of licenses that we issued. You may remember that that was the timeframe where the door put on hold retail and cultivation publications, so we were not accepting anything new. So what you're seeing here is folks that jumped in at the last minute, and we issued quite a few licenses during that timeframe. And since then, the numbers have been trending downward, and we're now moving closer to that sort of three rush levels, and we expect them to stabilize there. So again, just a little color. Yes.

[Sen. Andrew Perchlik (Chair)]: So before we move on to the other slide, what do you attribute that slide to, or do you?

[James Pepper, Chair, Vermont Cannabis Control Board]: So when we we have the authority to stop accepting new applications, and, you know, we have to do that through a vote with the board, and we always give the industry 30 a minimum of thirty days for people that may be in the middle of building a retail location or a cultivation facility, but hadn't actually hit submit on their application quite yet. So we both say, in thirty days from now, we're not gonna be accepting or approving any new licenses. And when we voted to close retail and cultivation, I think in December '24, we saw a lot of people try and rush through the door as it was closing. So so we saw this somewhat artificial spike. So we're not losing more businesses than usual. They're just not getting backfilled by new businesses.

[Sen. Andrew Perchlik (Chair)]: Thank you.

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: Yep. So, again, we saw a lot of licenses and now we're back to where we equal.

[Sen. Andrew Perchlik (Chair)]: And looking at other markets, you think that for our population or density that around between five hundred and six hundred is where we're going to end up, or regions, or you don't know?

[James Pepper, Chair, Vermont Cannabis Control Board]: So if you look at it more, yeah, I mean, yes. There's a finite demand for cannabis in the city, which is purely intrastate market, so we can't just create more customers than the kind of residents and the tourists that come here. And this seems to be what we did was we kind of estimated what the demand for a regulated cannabis was going to be and try and match the amount of cannabis that we licensed to meet that. Whether we need more retailers, know, that's kind of an open question. But as far as the supply of cannabis to the demand for cannabis, I think it was

[Sen. Andrew Perchlik (Chair)]: pretty much right. The number the moratorium ended, right?

[James Pepper, Chair, Vermont Cannabis Control Board]: We we were we never had a moratorium. We just we just never we as a board voted voluntarily to close these application windows. We can reopen them at any time.

[Sen. Andrew Perchlik (Chair)]: They're closed now. They're closed now.

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: They're closed. And we are working with a consultant on a supply of meth analysis, so we're expecting some findings from their work that will help the board make those decisions on when we reopen to leave a lab location window, how that's handled. And another quick slide, again, on our adult use program licensing. That sort of shows you a breakdown between the different license types and also divides our licensees between the priority status groups. So, substandard is orange, social equity, blue, and economic empowerment. As you can see, most of our licensees are postvigners, followed by retailers. Again, most of that after license types are cultivation and retail that are currently on hold.

[Sen. Andrew Perchlik (Chair)]: Adult use, you use that term to differentiate from medical?

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: Yes.

[Sen. Andrew Perchlik (Chair)]: There isn't a non adult use.

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: There is a non adult use. Yes,

[James Pepper, Chair, Vermont Cannabis Control Board]: that's right.

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: Since we've mentioned medical, unless you have questions here.

[Sen. Andrew Perchlik (Chair)]: Senator Norris, so did you get your lab up and running?

[James Pepper, Chair, Vermont Cannabis Control Board]: There are some slides on that. Okay. Yes. Thank you.

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: Yeah, we'll definitely catch you up. Are you gonna talk about medical? Yes, I was going to jump in there. Just a couple slides to update you on the status of our medical program. So you could see on this slide that currently we have a total of 25 locations between three standalone medical dispensaries and 22 medically endorsed retailers that are able to serve patients and obviously caregivers who represent patients, which is new, right? We, as a reminder, we received an ability to issue medical endorsements to those retailers who are interested as of July 1, and in the last six months, we've gained 22 new locations, because 22 out of 109 retailers have secured that additional ability to starve patients. So that's quite the accomplishment and a new trend here. And you could probably see that so if you look at the charts, you'll notice that the numbers of our patients and caregivers has grown over the course of the last, especially six months. Up until, you know, last six or eight months, the numbers of caregivers and patients have been on decline. So we could tell that the introduction of nitroglodorsin test triggered additional interest and we have seen patients returning into the medical program and sticking out services through their medical bills businesses. So that is new for us on the medical program here in the last six to eight months. And then I have one more slide, again, again, just another visual showing the location of medically endorsed businesses and dispensaries. Again, we used to have just three locations, which was not a lot. Know, we had issues with access. Potentially now, you could see we have a lot more places where those patients can receive service. Okay? No questions on the medical. I will jump in there one slide on our compliance and enforcement work. A quick summary here. Total number of complaints that we've received, those usually come through the members of the community. Fellow licensee may also submit a complaint against something that they see happening next door. We have a way on our website to submit it anonymously or reach out with your information. So that's how we capture those range from anything related to, know, why we're on-site, right, or safety and security of the space to pesticide contamination to issues with the product quality otherwise, or labeling, advertising, a wide range. Out of those four forty two, our compliance and enforcement team initiated 162 formal investigations, which then led to letters of warning, 105. Those are reserved for less egregious violations. They do not come as administrative penalties or suspensions. It's more of a, okay, we have a problem here, let's here's how we want you to resolve that. And then 51 notices and violations, those do carry administrative penalties or suspensions, or both come with corrective action plans and have used in situations where there was a clear violation. Quick overview of the work of the team. Yeah. Just the acronym, the LOWs and MOBs. A letter of warning. Okay. Yes. And the MOBs? Notice of violation. Okay.

[Sen. Philip Baruth]: Thank you. Senator Brennan, of the 162, of the four forty two complaints, is there a percentage that you could put on cons the consumer? Or, you know, you obviously, some are from neighbors most likely. Yeah. Are a lot of them consumer driven?

[James Pepper, Chair, Vermont Cannabis Control Board]: We have we do get quite a few of those. I mean, we have people that want to audit our program. You know, they're kinda stupid shoppers that wanna go in and make sure that that their products aren't attracted to you or that they're actually getting their ID checks. And so we do receive complaints from the kind of broad spectrum people that engage with program.

[Sen. Andrew Perchlik (Chair)]: You don't get complaints from the super shopper. That was

[James Pepper, Chair, Vermont Cannabis Control Board]: Well, you know, sometimes if there's a product quality issue, we will get a complaint, you know, people with frequent instances.

[Sen. Andrew Perchlik (Chair)]: Yeah, so do Norris. Yeah, just wanted to give you an example of what a complaint looks like and what are they complaining about here and what's,

[James Pepper, Chair, Vermont Cannabis Control Board]: I mean, the most generic one. I mean, you

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: can Yeah, probably say so advertising complaints. So we could have, we're gonna receive a complaint from somebody who includes an ad from the newspaper and says, is this allowed? They're saying x, y, and z. Right? We have a lot of those types of complaints.

[Sen. Andrew Perchlik (Chair)]: Is it alert? I thought they could do it.

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: Well, there is a process for that. If certain requirements are met, they absolutely can, but there needs to be an audience composition requirements met. They have to submit those ads to us for pre approval. So we have a record, we should have a record of any of every advertisement out there and that it is compliant. So folks sometimes see things that they question. Same with a label, like you can see a product there and they're like, wow, this is way too colorful and it appeals to children. Is this allowed? Right, so we have a lot of those.

[Sen. Andrew Perchlik (Chair)]: Do you approve all labels?

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: We do. So every single label also comes to us first. I'll have a quick slide on product registration where that resides. So those are pretty common. And again, we could have questions about a minor on-site, like I mentioned, right, or some other or, you know, who would employ using cannabis small practices. I've been served by somebody who's so could be various things like that. Obviously, sometimes here, I didn't feel very good after this product, You know? And then we could go and, okay. We'll test it. Is this a product? It's just you know, could be anything, right, at that point. And we do have to dismiss them again because there's may not be much to it. It's harder when you have anonymous complaints to investigate those.

[Sen. Andrew Perchlik (Chair)]: Yep.

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: We're good on this, so I was going to jump on this product registrations slide. So, what this is, we've just quickly touched on that, any product out there, any of the establishment has to come to us first in terms of we need to make sure it's tested, we need to make sure all of the labeling requirements are met. So the main of flaw of this slide, but I wanted just to note that if you look at their data for 2024 and 2025, little charts there, you'll see that in 2024 we registered over 4,600 products, which means we received requests for registration for that many products. And in 2025, just over 5,000 products came to us for registration. So a lot of work that we do with Chernalyn, when we receive information, so again, primarily focused to make sure that testing is properly done, products are clean, safe, and obviously labeling requirements are met. So we have a team that does that review. You can also see in a side little table which products

[Sen. Andrew Perchlik (Chair)]: sort of

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: dominate the market, and flower, could see right there, is most popular product that gets registered year over year, followed by weight cartridges, concentrates, and down the line we go.

[Sen. Andrew Perchlik (Chair)]: Does follow sales? It's similar to, like, flour would be Yeah.

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: Yeah. So we have some information on that, but yes.

[Sen. Philip Baruth]: Okay. Cinnabaroon. I don't see any beverages on there. Is that still a category, or is it, you know

[Sen. Andrew Perchlik (Chair)]: It would

[Brent Ziegler, candidate for Adjutant General of Vermont]: small instead of the edibles.

[James Pepper, Chair, Vermont Cannabis Control Board]: Edibles? Yeah. Okay. Better term would be kind of orally consumed probably, but edibles, yeah, are gonna be probably there.

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: Yeah. Not that many at this time anyway, but, we are watching and introducing new categories as we sit there. Okay. Any other questions on this?

[Sen. Andrew Perchlik (Chair)]: I said you're using flower in the clone.

[James Pepper, Chair, Vermont Cannabis Control Board]: So clone, we created a new license type, which is kind of like just a starve. If you don't wanna starve your plant from the seed

[Sen. Andrew Perchlik (Chair)]: Oh, so this is for

[James Pepper, Chair, Vermont Cannabis Control Board]: the buy kind of immature plants to to kick start it for all consumers.

[Sen. Andrew Perchlik (Chair)]: Buy those so they can grow their own or is it just for the other cultivators?

[James Pepper, Chair, Vermont Cannabis Control Board]: You the authorization was to allow because we have home row, to allow people to purchase up to that home row limit. So you could buy six mature plants, to you know

[Sen. Andrew Perchlik (Chair)]: And is that the limit you could have six mature plants?

[James Pepper, Chair, Vermont Cannabis Control Board]: You can have two mature for immature, and the differentiation is a legal one. It's whether there's municipal funds on the.

[Sen. Philip Baruth]: So just Yeah. Just to add to that, I always wondered if you could buy six immature plants which all are off to be mature at the same time, then you're not allowed those things. Yeah. What do you have to do? As soon

[Brent Ziegler, candidate for Adjutant General of Vermont]: as you harvest Harvest harvest. Once you harvest the

[James Pepper, Chair, Vermont Cannabis Control Board]: plant, it actually kind of goes back to not just being part of the county. Okay.

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: Thank you. And so the next couple slides on our revenue, post projections and actuals, sort of, to update you where we are at. A couple reminders here, things that are different. Effectively, fiscal year is, first of all, the Canvas excise tax no longer funds our agency separately directly. It now goes directly into general fund, which used to that early before came into the cannabis regulation fund. And then our cannabis regulation fund, which is the special fund, now consists only of licensing application fees and any administrative penalties we collect. And sort of terms of our revenue and how we will use it, so the special fund will cover about a third of our operating budget, which tracks those historical patterns, and then two thirds of our budget will be looking to build by the line on the general fund distribution appropriation. So now, I'm gonna direct your attention to this little table.

[Sen. Andrew Perchlik (Chair)]: Great, great.

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: Because, then I will explain that because there's a lot here. So the first line item there, the excise tax line item, that's the projections from JFO for this fiscal year. So the projections are that our taxable sales will be just under $158,000,000 and will collect about or just over $22,000,000 in excise tax revenue. Those are the projections. That second line is our actuals for the first four months of this fiscal year. And so far, taxable sales are just over $52,500,000 and 7.38 in excess tax revenue, so if you do the math, we are tracking right as we, where we should be, so that's good.

[Sen. Andrew Perchlik (Chair)]: And then, I assume sales tax revenue would be the same.

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: Sales tax, 6%, so yeah, so we'll be tracking.

[Sen. Andrew Perchlik (Chair)]: As far as projection.

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: Yes, we'll be, yep, exactly. And then the third line is the fee revenue projections. Those are the so the incubation here, there's $2,600,000, and the fee revenue is the projection based on how CCB sees things developing, and that's what we've given out to financial management. And we have actuals for the first six months of this fiscal year, and we have 2.38, which is, again, we are tracking well against the $2,600,000 projection, just over, collected just over half of what we projected. So again, nothing here that gives us any reason to update our projections for business loans on that. And I have one more slide for those who really want to kind of get a better appreciation for the excise tax sort of trends year over year. So that first chart right there has three colors. Right? You have a gray color line, green, and blue. Your gray color represents excess tax revenue collections from 2023, green is 2024, and black is 2025.

[Sen. Philip Baruth]: I don't when you did

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: restart. Week, or so. It was like an unfortunate October 2022 where retail licenses were issued. So the 2023 numbers, that's exactly where we wanna be looking at. So you could see right here, '23, we're growing. Year '24, right, you can kinda see stabilizing, and now if you look '24 and '25, we're seeing a pattern. So months over months, we kind of settle and get to a more predictable

[Sen. Andrew Perchlik (Chair)]: And so the revenue, so you would think it would go up just with inflation as long as volume is the sort of

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: Yeah, so I, for sure, it's interesting. So our kind of understanding of what we're seeing here is that overall, if you look months over months, 24 to 25, we are over each month. So, right, this could also be an indication that the market continues to thrive. If you remember, we do not have any new entrants into the retail market in the last twelve plus months. So this revenue is generated by the same players, and it is higher.

[Sen. Andrew Perchlik (Chair)]: Do you have do you assume you track transactions as well as sites, right? So you would know, like, there more purchases? Which I would think of to be more customers in the market?

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: Yes, we have some access to data. Again, the IT side of things could be better, but we are finally at a place where we are able to get much more granular. So yes, we have a way of seeing those trends and paying attention to that. Again, we should be in a much better place in the next six to eight months because we've had troubles with people reporting data consistently and reliably. We do have access to the point of sale data. So, but again, you know, we we we can definitely spot challenges. But sort of, Department of Taxes has a little bit more consistent way of pulling those numbers together, then we could be at that very range or that are watching with the trends, for sure. So that is what we have for the numbers, and now we are ready to dive into the actual VA request. And then we might know already, or, you know, it says right here, our VA request is in relation to the expenses associated with our reference lab. I would give you just a quick background on why we're here and the status of our lab. So it was in 2020 Act 83 from 2022, authorized CCB to receive an $850,000 towards the lab, in line with statutory requirement directed by our board to establish an in house cannabis reference testing lab. And then once we had received that appropriation in the 2023, we went out to bid and secured requisitions for key lab equipment. So two plus years ago is when we first began our process for securing the lab with them. We were ready to go, we found our vendors, we got our quotes, But what happened at the same time is that our lab location did not materialize. It was 2023. We had the flood. BGS was dealing with more important, more pressing issues, and they were our partner in helping us find the lab location. So we were in a situation where we were ready to go ahead and purchase equipment, but what that would have meant is we would need to find a place to store it, pay storage fees, handling fees, and then wait and watch those warranties that come with equipment expire, did not make any sense. We were also given a mandate to hire a lab director and chemist for the same reasons. It's because we did not have the space, we did not pursue those initiatives. Fast forward to January '25, we were able to find a space in Colchester. We worked with the landlord to outfit that space between January and June. We did not need to go out for any additional funds for picking up the lab. It just so happened we had some delays on IT, so we have funds that were not utilized and we could pre appropriate them to help pay for those expenses. So, again, we kind of went for it. And in June, we got under a ten year lease. We I put a space to host the labs. That same month, we hired a lab director, and in July, we went back out to bid, got our requisitions going, and by October, we began receiving our equipment at the new location. At that time, so during all of that time, were acting, assuming that soon as we were ready with our actual costs, we would be reaching out to financial management and requesting funds that we thought we had for our lab expenses. It's in line with the FDA. We reached out to them in November year, and we're told that inadvertently those funds that were allocated to us as a part of the DAA were reported to the general fund at the end of fiscal year, close to 2024. And the only way we could proceed here is to go back out with another VA request. Financing management was fully supportive of our request. We provided the entire sort of inventory of costs, you know, line item by line item of all of the equipment. The totals came up to $6.31 50, and that is the request that we have in front of you today for the.

[Sen. Andrew Perchlik (Chair)]: Thank you for that history.

[James Pepper, Chair, Vermont Cannabis Control Board]: So if I'm remembering right,

[Sen. Andrew Perchlik (Chair)]: when the administration came in, this was on their sheet. Mhmm. So that's all fine. I'm just wondering in your Spanish. Is that on the first page?

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: Yeah. Right. First page.

[Sen. Andrew Perchlik (Chair)]: Yeah. Thought that before they reverted funds like that, they went to the agency and

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: Yeah.

[Sen. Andrew Perchlik (Chair)]: And investigated. I'm I'm just struck by the inadvertently part, and I and I'm wondering, have they said how this could happen inadvertently?

[James Pepper, Chair, Vermont Cannabis Control Board]: No. We are somewhat in a unique position, which is in state government generally. Yeah. As an independent executive branch agency, the governor appoints the Canada's control board from a list that's provided to them very synchronous in the traditional auditing board. And then we are no longer kind of under his cabinet, you know, or his his extended cabinet. We're gonna attend his cabinet meetings. So it's it is possible that they just didn't think they could call us. But It's

[Sen. Andrew Perchlik (Chair)]: it's no small sum of money. So anyway, probably there

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: yes. The word inadvertent was used I've had a couple meetings with out of Russian, and so it's it's all aware. It sounds like more of an administrative oversight other than anything else. I know my staff, my financial manager at the time, even prior year, who had made connection and like, hey, do we need to do anything else to make sure those funds are reserved for us? We were told oh good. So I feel like it was probably just, again,

[Sen. Andrew Perchlik (Chair)]: an accident. Normally, funds are referred to the default. The defaults are referred. So you do usually have to be pre prod to make sure they're not reverted. Yeah. Or they just kind of

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: Something, it does seem like it was more of an administrative. And again, we had their full support once this came to life.

[Sen. Andrew Perchlik (Chair)]: So you have a contract for this whole expertly?

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: Yes, so we have

[Sen. Andrew Perchlik (Chair)]: Is it all spent, basically?

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: Yes, so most of it, I think we had about $5.80 that is fully spent or invoiced, I would say, income about $60,000 as of the submission who might actually have bought it in close. We coded everything else that we could need, may actually be denied.

[Sen. Andrew Perchlik (Chair)]: Do you have vendors waiting to get paid?

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: No. We went ahead and we've

[Sen. Andrew Perchlik (Chair)]: Moved money around.

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: We moved money around. Yeah. So we're at the point where if we don't secure those funds, we would be $630,000 short in other places. So, the equipment is installed and some of the key equipment. And our plan is to cut the lab up and running by June. So that's sort of the timeline we are working with. We've hired another scientist already, and we just closed the posting for final science and sciences position. So we are really full on in getting the operations going.

[Sen. Andrew Perchlik (Chair)]: And that'll, if I remember correctly, the proposal to build out is this will save money over the long term than with sending all this stuff out, plus other benefits, but that's one of the things.

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: Yeah, we have a huge mandate. I think it should save, because we are working with our private labs. We have contracts with the only two medical private state for any compliance and enforcement work that we are doing. But we do have some R and D work potential, and we have some additional initiatives that the board would like to take on. We have to do a lot more compliance and enforcement board if we've had a lab. But ultimately, there's also a whole lot that has to do with public health and safety and conflict of interest. We have two labs that we licensed, and then we go to them and say, Hey, could you do this compliance and enforcement testing for us? Something that maybe this other lab tested.

[Sen. Andrew Perchlik (Chair)]: Right.

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: Is very difficult to feel confident about the outcome. So there's a lot here. Okay. So that's that. Yeah. The last slide was the same thing, just with some additional citations that I wanted to put in there.

[Sen. Andrew Perchlik (Chair)]: I think that's pretty straightforward. Can I ask a non budgetary question? So the rules, the purchase rules that they were proposed in that kit? I got several calls from the dispensaries in my district. But I can't remember if you if the board did something like that. Did maybe, like, pulled them off or something. I can't remember.

[James Pepper, Chair, Vermont Cannabis Control Board]: Right. Yeah. We decided to postpone the implementation of any changes to them. So there is a purchase cap currently. It's just so no one would ever hit it. Okay.

[Sen. Andrew Perchlik (Chair)]: You had lowered the cap basically

[James Pepper, Chair, Vermont Cannabis Control Board]: They lowered it to a much more realistic equivalent to one ounce of cannabis, which is purchase limit for flower. This is a transaction limit products.

[Sen. Andrew Perchlik (Chair)]: So they bought, like, three this was a complaint that I heard. They do have customers that will buy three different things, and then they were hit there. They would have hit the proposed. Right. Right.

[James Pepper, Chair, Vermont Cannabis Control Board]: So so we heard a lot of feedback. It was a proposal. We we put it was a draft proposal just like, wait. If we were gonna implement a new rule, we put it out for comment. We got a quite a bit of comment, not just from the industry, but also from legislators saying we really wanna revisit this transaction with it this year. So instead of implementing something and having to change it, people have to change their IT infrastructure to economy, those employment sales systems. Instead of doing that twice, you do end up changing it. And we decided to just delay implementation further. Know you've don't hear Yeah.

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: I think we decided on July 1 sort of the timeline, hoping to get to the legislative session and see if there is Direction.

[Sen. Andrew Perchlik (Chair)]: Mhmm.

[Sen. Philip Baruth]: Along that same line, because I I I'm one of those legislators who probably called you, but it got a call from some group owners. But a lot of these folks I mean, it was it was a proposal or an idea when they took it pretty seriously. Yes. It's a it came out of manual. Right? Or You're guiding stacking. Yeah. So these guys have built their business model. Right. The guys folks I'm dealing with in my district built their business model around the current guidelines. So going forward, are you saying July 1 is a probable change, or are you just going to take another look at it?

[James Pepper, Chair, Vermont Cannabis Control Board]: What what we said is no no implementation is gonna happen to a minimum of July 1 of the of any proposal. I think at that point, once we know what happens here, whether it changes or not, is the time that we can restart the conversation. And really, this is a the reason why I really appreciate the legislature writing about this is because there is no good way, it's not crazy, to scientifically say what the equivalent in one ounce of flour is when you compare some products. You could look at, you know, how much does a one ounce of cannabis cost on average, and what does that equivalent in products? You could talk about the bio diversion, bioavailability of the various modes of administration, whether it's tincture, topical, inedible versus smoking a joint, you know, and try and have an equivalent THC level. You know, it's just, or you could just say under perfect extraction methods, ideal extraction conditions, know, how much THC milligrams could you extract out of

[Sen. Andrew Perchlik (Chair)]: one ounce of flour? Because with the current path

[James Pepper, Chair, Vermont Cannabis Control Board]: of life. One ounce of flour, yeah. Can only purchase one ounce of flour if you want. Asked us to create an equivalency guide for products, the amount of products you can

[Sen. Andrew Perchlik (Chair)]: buy in small

[James Pepper, Chair, Vermont Cannabis Control Board]: transaction. And every state, so we looked at every state that's done this, every state comes right around one ounce of flour is equivalent to eight grams of concentrate, somewhere between five hundred and twelve hundred milligrams of THC. We pick somewhere kind of right in the middle of all that, because it is somewhat of an arbitrary decision. Know, full well knowing that any transaction limit disproportionately impacts people that live far away from a dispensary or, you know, there's certainly consumers that like to bulk purchase products, Costco, you know, and, you know, so really, if it's gonna be an arbitrary decision, it's almost better that it come out of the legislature, is that one ounce of an arbitrary decision. And so I think what it probably won't be this committee as it decides, but the good part or kind of nice part is we essentially didn't have one. We just did the under ideal conditions, you could extract eight thousand four hundred milligrams out of one ounce of flour. That is essentially not a limit because you know, you think about it, the average, the serving size of gummy being five militaries, just, you that's what you can buy. 80 packs of gummy isn't the same as

[James Pepper, Chair, Vermont Cannabis Control Board]: the equivalent of five, if

[James Pepper, Chair, Vermont Cannabis Control Board]: you want it's large. But we've existed in that framework from the outset of the market, and we haven't seen a huge number of what we would consider suspicious transactions with essentially no with that. So it is a good you have a little bit of data as the legislature to say,

[Sen. Andrew Perchlik (Chair)]: where do you wanna set that Monday? What committee judiciary? I think it would be economic development at this point. That's like a business.

[James Pepper, Chair, Vermont Cannabis Control Board]: There is this one section in the criminal law that says that the cannabis court shall set by rule product equivalency to the possession limits, which they're in They they cross the line between where the civil penalties are. Mhmm. You may wanna either eliminate that or just say that Yeah. Or just clarify it as this level.

[Sen. Andrew Perchlik (Chair)]: Yeah. Yes. Senator Sears was, while he was alive, he was very interested in keeping it moving through judiciary. Right. I think

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: I would love to see it in health and welfare, but

[James Pepper, Chair, Vermont Cannabis Control Board]: It's about dose. I mean, that's the thing.

[Olga Fitch, Executive Director, Vermont Cannabis Control Board]: That's Yeah. It's always been handled pretty well, though. And

[Sen. Philip Baruth]: Right. Well, I I would it it doesn't have anything to do with I don't think when it does come wherever it's supposed I'd like to see that he was listening here. The some of the the retailers and growers,

[Sen. Andrew Perchlik (Chair)]: you have a seat at the table. Yeah.

[James Pepper, Chair, Vermont Cannabis Control Board]: Absolutely. They're the one the retailers were certainly the most vocal change. Yeah.

[Sen. Andrew Perchlik (Chair)]: Can I just throw one out of this thing out there? Have you heard the other day? And you don't have to comment. And this is have you heard the proposal to merge the cannabis control board with liquor and lottery?

[James Pepper, Chair, Vermont Cannabis Control Board]: Yeah. I mean, well, it's been that's been floated around, including in the original Right. Marijuana Advisory Committee report, where should this thing live? Yeah. Yes. That's the

[Sen. Andrew Perchlik (Chair)]: way Maine does it. Right?

[James Pepper, Chair, Vermont Cannabis Control Board]: Maine, it's actually directly it's a it's just an executive branch agency that the governor appoints the executive director. There's there's no board.

[Sen. Andrew Perchlik (Chair)]: Oh, I thought it was lottery liquor lottery in Kansas.

[James Pepper, Chair, Vermont Cannabis Control Board]: It's that it's that way in Oregon, and it's that way in Washington State. I see. Yeah. Vice. Yeah. Vice vice kind of. Right.

[Sen. Andrew Perchlik (Chair)]: Right. With the vessel over there. You have a public comment.

[James Pepper, Chair, Vermont Cannabis Control Board]: It's really so we actually the the auditor when you guys created the board, you asked the auditor to come back in three years and evaluate whether this is an effective and efficient way to rate the industry. The auditor, for various reasons, said that he prefer not to do that report, which which is more legitimate.

[Sen. Andrew Perchlik (Chair)]: Was this last year? Because I think I remember this.

[James Pepper, Chair, Vermont Cannabis Control Board]: Well, this was supposed to be three years after the creation of board, which would have been 2023. And then Right. The legislature kicked it out two years instead of eliminating altogether. But last year, we did eliminate that before. But we also picked up the ball and said, we'll get we have a little bit of capacity in this contract we have with our economists who are looking at the market analysis. Could you evaluate what the most effective and efficient place to house our agency would be and look at the various models that exist around the country? We actually have that report that I can share. It's done, I'm just happy to just kind of It doesn't do a line by line cost analysis where the savings would be,

[Sen. Andrew Perchlik (Chair)]: but it's Is there pros and cons, or does it give a recommendation?

[James Pepper, Chair, Vermont Cannabis Control Board]: Pros and cons of the four or five different models that exist around the country. Okay. And that it does give a recommendation that really because of the subject matter expertise at the board compared to the law and because of the just vastly changing federal landscape currently. That for the next two years, it should probably stay where it is. But again, you you guys as the appropriations committee, should probably do the analysis where the savings might actually be. I

[Sen. Andrew Perchlik (Chair)]: I remember the auditor saying that he'd rather not. It was an interesting response to any legislation to do it. Yeah.

[James Pepper, Chair, Vermont Cannabis Control Board]: It's partly. But I think that his rationale, and I it was really just you said effective and efficient. Right. Are you measuring other state agencies that have had a regulatory framework? Are you measuring that against other cameras control boards around the country? And, you know, what metrics do you want me to evaluate? Right. You know, so you said either tell me that and give me a little bit of money to do this or just ask me not to do it. Okay.

[Sen. Andrew Perchlik (Chair)]: Any other questions? Yeah. Mister. Alright. Thank you. Thank you. Thank And