Vermont Legislature SmartTranscripts:

[Sen. Alison Clarkson (Chair)]: You're live. Thank you. Nick, could you oh, great. Welcome, everybody. It is Tuesday, March 24, I think. And we are here at Sunday Economic Development, Housing and General Affairs after a fairly robust Senate floor morning. And we are going to be considering for the next little bit amendments to the cannabis bill s two seventy eight, which we did not get to present on the floor because we ran out of time. So we're gonna be presenting it first thing tomorrow at 01:00, but we are considering two amendments to it today, as I understand. One is from the committee, which I'm hoping we will all individually sign on to, and we're going to vote on that first because we've had some time to review it. And the second, I believe, is being proposed by our own Thomas Chittenden, and that we will be discussing as soon as we vote on the other. And given the do we know where everybody else is? Nope, but I can. If you would text them and encourage them to join us, that would be great. Thank you, Kiara. You are agreeing. So, counselor Anderson, would you be kind enough to please just remind us what this amendment does and what we did while I was away. We added the intent section, which we hope clarifies why we're doing this. And the first question well, good morning, Randy. Good morning.

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

[Sen. Alison Clarkson (Chair)]: So, chair's prerogator, I'm gonna rewind and begin again because first, I'd like to thank you for having chaired the committee so ably while I was away.

[Sen. Randy Brock (Vice Chair)]: If I played it, you know,

[James Pepper (Chair, Vermont Cannabis Control Board)]: That's true.

[Sen. Alison Clarkson (Chair)]: I'm reverberating from some of the things that have happened in the building while I've gone. Anyway, so now we could pivot back, but thank you very much. It was just terrific. You're so now we are doing two amendments today for the cannabis bill. One is the amendment we've already talked about and that you've heard the intent section. Just high level, counselor Anderson, if you just quickly summarize it because I'd really love to have it from all of us individually. It's an amendment. We don't have possession of it, so it can't be a committee amendment. It has to be from all of us individually.

[Tucker Anderson (Legislative Counsel)]: Good morning. Tucker Andersen, Legislative Council. That is correct. So you should be looking at updated draft 1.3 of senator Clark's amendment. It adds two sections to s two seventy eight, such as 27 a and 27 b. 27 a explains intent behind this part of the bill, and essentially explains that it's providing for flexibility based on potential changes to the federal posture on cannabis markets at the state level, and it allows the governor to enter into compacts, in the future. And then section 27B contains the authorizing language for the creation of those existing compact of compacts by the governor. It establishes requirements for compatibility between state laws as members of the compact, grants the governor the authority to enter into these agreements with these governors of the states, provides regulatory authority to the Cannabis Control Board over what are termed foreign licensees that will be operating within the state of Vermont pursuant to these compact agreements, and of course, advance all of the contingencies versus changes at the federal level that will precipitate the governor's authority to enter into these agreements. So it has the list of contingencies that have to happen at the federal level first before the governor can exercise this authority. That is essentially all that is. So it prepares us, hopefully put us

[Sen. Alison Clarkson (Chair)]: in a better position to move forward if there is federal action rescheduling cannabis. Or, yes,

[Tucker Anderson (Legislative Counsel)]: or changes in enforcement. Or changes in enforcement. Or enforcement federal defunding of enforcement activities. So there's a series of contingencies, and all of them either relate to change in the legality of commercial cannabis markets at the federal level, changes in enforcement that could come through the a signature from the head of the DOJ on a memo concerning enforcement of interstate cannabis markets, or refunding of enforcement activities, or reprioritization of enforcement activities, anything that would free the state from the risk of being subject to federal enforcement or the multi state conspiracy. Right. David, you have a thought?

[David Weeks (Committee Clerk)]: Yes, ma'am, I'm just curious. Our counselor has set himself up with a prop on the end of his finger to accentuate magnitude of this.

[Tucker Anderson (Legislative Counsel)]: I did not set myself up with a prop. I broke one of the fingernails, sleeping in half of the crowbar, and didn't want to discuss the committee at this point.

[Sen. Alison Clarkson (Chair)]: Very well. So, me note in it that the the type of Band Aid has progressed with his parenthood.

[Tucker Anderson (Legislative Counsel)]: That is correct. Also the socks. And also the socks.

[Sen. Alison Clarkson (Chair)]: So I would I would love to have all of us individually on this amendment if that's okay with all of you. I think this intent and is is important and and puts us in a good position to protect the cannabis market that we help create. So is everyone willing to be on this individual week?

[Sen. Randy Brock (Vice Chair)]: I just have a question to make sure I understand. I've read this enough details. Totally digest it. The issue of a par licensee. What page are on? I'm not on page I'm just looking at that. Par licensee. It's a holder of cannabis license issued pursuant to the laws of another state that's entered into an agreement pursuant to this article. Does this perhaps open the door to a retail cannabis provider in another state operating a retail outlet within the state of

[Tucker Anderson (Legislative Counsel)]: Vermont, that would be in competition with other Vermont licensees? Yes, provided that the laws of the contracting state related to that license are substantially the same, and they're subject to the same regulations in that home state, but also that they acquire a license from our cannabis control board prior to operating it in the state.

[Sen. Alison Clarkson (Chair)]: And that's what would be those terms of interstate commerce would be agreed to in in the compact. That is part of why we would wanna have a compact. So that everyone was clear, and and hopefully we would come together with mutual agreed upon.

[Sen. Randy Brock (Vice Chair)]: I'm just I'm just predicting this debate that would would occur and the objections that would occur from local licensees about competition interstate competition in the difference in crowdfunding. Right. So this

[Sen. Alison Clarkson (Chair)]: is an effort to protect that market. David?

[David Weeks (Committee Clerk)]: Just curious, so the difference between one point two and one point three.

[Tucker Anderson (Legislative Counsel)]: Absolutely. Oh, glad you asked. When I walked through 1.1 prior to 1.2, I noted that there was inconsistency with references to Vermont license or state license throughout The defined term is Vermont license. I didn't cheat those prior to 1.2, so I updated for 1.3 and made sure that Vermont license is used throughout, and there's no more reference to state license. And foreign license just means any other state, not a foreign Correct. But the again, the language was taken almost verbatim from language adopted in three or four other states, and that language is a little confusing how it used state license throughout. So I updated it to make

[Sen. Alison Clarkson (Chair)]: sure that when we were talking about our state that it is Vermont license. Great. Terrific. So, mister clerk, we don't really need to take an official action. Mister chair, no. Don't you have a proactive action? But I would just are we straw poll everyone okay with their name being on it? Everyone okay? Or you can stand it or not? I think you would be presenting it, I think a difference from the committee would be supporting it being added for them. So is that wrong? It is not coming from

[Tucker Anderson (Legislative Counsel)]: the committee, it's coming from you as individual senator. So whoever was acting is needed to

[Sen. Alison Clarkson (Chair)]: be a sponsor. I'm I'm happy to do it if you'd like. Sure. Okay. I'm happy to do that, cover. And if you would thank you all. So five zip, all individuals, and I'll happy to report it with your help. Go too far. Now second amendment, I understand this from Tom. So Should I share again? And we need

[Sen. Thomas Chittenden (Member)]: It speaks with it.

[Sen. Alison Clarkson (Chair)]: That's Yeah.

[Sen. Thomas Chittenden (Member)]: Great. Respect that We

[Sen. Alison Clarkson (Chair)]: have a copy of it.

[Sen. Thomas Chittenden (Member)]: So it should be up on the web, and I believe Kiara is running against the.

[Sen. Alison Clarkson (Chair)]: Okay.

[Sen. Thomas Chittenden (Member)]: But I'll just give you some background on this. And I I definitely like you keep me in this separate conversation for a variety of reasons. So that I've been this one. So if you all recall, this is a continuation from the discussion you had last year and we asked for a report and I don't know about you. Didn't read the report until somebody brought to my attention, which I called myself. This is also on the website right now. So this is the report we asked for last spring on the cannabis proposal for these appropriations for fiscal year '27. On page eight of this report really speaks to what this amendment contemplates doing. Outdoor growers have in Vermont climate a tough go ahead to say the least. And so right now the fees that we charge them, I I would argue, and I've been persuaded through a variety of different conversations, are disproportionate to what it really takes, the yield that they can get from growing outdoor in our limited season with our cold climate as well as just the other the other struggles that the moth farmers get. And I I have the impression that I certainly wanna help farmers, but it seems to be a bipartisan thing that if people are gonna grow things on the land out there, we do a lot of things to make that as easy as possible. What this proposes to do is acting on the very informed report from the CCB to lower the outdoor cultivators' feeds to the tune of a scale that had been duly considered by them, is outlined in the amendment. I think the bottom line up front, should have started with, this would cost the general fund about 100 to $120,000. The JFO can report on that. This does not contemplate where we would backfill that. This is just lowering the fees we collect from outdoor growers marijuana. I was not here when the marijuana recreational cannabis recreational use was asked. I have the impression from those conversations that this was unchartered territory and these fees were in what were were identified ways that might not necessarily have been grounded in a specific hard and fast number. And I think what we do have now is a better idea of what both the yield as well as the costs as well as the net benefits of naturally grown outdoor cannabis are relative to the very heavy intensive, production facilities of indoor cannabis. But I think this work is worth the conversation. If this committee supports this amendment at any number, at least three of us, however you wanna do that, madam chair, I would then, if the committee so desire, take this to both senate finance and senate appropriations to get their way in before this is considered by the whole senate. I don't know if that helps enough if you want to walk through the language, but thank you, madam chair, for letting me speak.

[Sen. Kesha Ram Hinsdale (Member)]: Great. Can I make a suggestion? Yes. Sure. I have not run this by anyone. I've just had some sandwich and thought about this. Oh, the brain is bad. A way to expedite this, but perhaps we could push the effective date out a year so it doesn't affect this year's budget and bring that to our preparation.

[Sen. Thomas Chittenden (Member)]: I think

[Sen. Alison Clarkson (Chair)]: that would help. Oh, it doesn't have a data.

[Sen. Kesha Ram Hinsdale (Member)]: Right, which means it would be effective.

[Sen. Randy Brock (Vice Chair)]: We're talking about what, a $100,000. 120.

[Sen. Thomas Chittenden (Member)]: Need to officially weigh in

[Sen. Kesha Ram Hinsdale (Member)]: under I a

[Sen. Randy Brock (Vice Chair)]: don't know. Is that going to be enough? That just decimal test is concerned.

[Sen. Kesha Ram Hinsdale (Member)]: Global appropriations with that in your pocket. Maybe that. Yeah. If it be they they don't have time for too big of a discussion, so if

[Sen. Randy Brock (Vice Chair)]: that I mean, amount is so small relative to the budget. What

[Sen. Alison Clarkson (Chair)]: we were asking are you was so small. It still got gutted. Thomas, did you ask Ted or Patrick for the fiscal comment?

[Sen. Thomas Chittenden (Member)]: I gave Ted the heads up that this was coming. I don't see him in the room, so I'm sure he's busy elsewhere. So I know he is anticipating this request for this estimation, but that usually is done with Senate Finance and Senate Billings. My thinking on this was first start with us. This is our ability. If we support this, then I will proceed along down the path to the funding.

[Sen. Alison Clarkson (Chair)]: So this would be effective 07/01/2026?

[Sen. Kesha Ram Hinsdale (Member)]: Well, I I guess I would say keep it in your back pocket that We believe that this is a good policy change. I believe this is a good policy change, but if we can make sure it survives with committees that are busy.

[Sen. Alison Clarkson (Chair)]: Right, and already planning on that revenue. And planning on the revenue.

[Sen. Kesha Ram Hinsdale (Member)]: Businesses will know it's coming next year.

[Sen. Alison Clarkson (Chair)]: Right, they can anticipate it. Pepper. Yes. You're in the room. I'd love to have you weigh in. Sure.

[James Pepper (Chair, Vermont Cannabis Control Board)]: James Pepper, chair of the Cannabis Control Board. I know time is short, so I can speak to anything you need to, any clarification here. But generally speaking, last year, this committee took extensive testimony from cannabis cultivators suggesting that difference between indoor and outdoor cultivators, their fees that they pay should be widened for a number of reasons. And so you looked at reducing outdoor cultivation fees, and in order to offset that cost, you raise certain other fees. In the waning days of the legislature, those people who had their fees raised came in and said, hey, listen, like, we're struggling too. So that work got taken out of the bill, moved to a study committee. We wrote this report. It has all the justification that you might need for why you would want to widen that gap between indoor and outdoor. This proposal doesn't increase any fees, just reduces outdoor fees. And then there's a mixed tier that I'm happy to explain, but it's just essentially outdoor cultivators will pay half. Half.

[Sen. Alison Clarkson (Chair)]: It's pretty half all the way down forward, right? Any other

[David Weeks (Committee Clerk)]: Just a quick question. By understanding concept, fully support industry, I'm just curious, is indoor versus outdoors roughly half yield?

[James Pepper (Chair, Vermont Cannabis Control Board)]: No, I mean, How many times? Six.

[Sen. Alison Clarkson (Chair)]: It's much less.

[James Pepper (Chair, Vermont Cannabis Control Board)]: It's much less. I mean, you're lucky to get full harvest outdoors. You're always fighting with the weather, that first frost. So whereas indoor cultivators go year round, they've got much higher operating expenses, but just as far as the number of returns that they can get on their profits, at least one. Okay, I'm

[David Weeks (Committee Clerk)]: not going to push back on the amount, I just wanted

[Sen. Randy Brock (Vice Chair)]: to kind of sense it with that ratio. So sorry, just

[Sen. Alison Clarkson (Chair)]: to clarify that, what would you say the outdoor cultivator, the yield is like four times less than indoor?

[James Pepper (Chair, Vermont Cannabis Control Board)]: Can, an indoor cultivator, generally speaking, get four harvests a year, between four and six harvests a year, whereas in an outdoor, they're lucky to get one full harvest.

[Sen. Randy Brock (Vice Chair)]: Right.

[Sen. Thomas Chittenden (Member)]: Speeds are somewhat daunting if you're just gonna do a small crop. The other argument that sold me on this is what other agricultural product do we charge the $400 to be able to grow? I mean, we just don't really do that, but they know it's marijuana.

[Sen. Alison Clarkson (Chair)]: No, it's in the sort of different context. Yeah. I think this is, I support this measure. It sounds like you're supportive of it. CCB is

[James Pepper (Chair, Vermont Cannabis Control Board)]: roughly supportive of Ambivalent on the fees, the only thing that I just have to note is that our fees currently don't cover our operating expenses. That further widens the delta in, you know, whenever this takes effect, if this were to pass.

[Sen. Thomas Chittenden (Member)]: So,

[Sen. Alison Clarkson (Chair)]: just one more,

[James Pepper (Chair, Vermont Cannabis Control Board)]: I mean, one more kind of just point that I always have to make is that, you know, sometimes people look at our budget and say, well, was it an intentional decision that your fees don't support your operating expenses? And it very much was, but we have to have that conversation every single year. But Sure. Yeah.

[Sen. Thomas Chittenden (Member)]: Do you have an opinion on setting the effective date

[James Pepper (Chair, Vermont Cannabis Control Board)]: a year out? I I don't. I mean you know It

[Sen. Alison Clarkson (Chair)]: gives you time to prepare for that much less Right. Sure. Tell me a piece of the revenue, it's that you are able, you're able.

[James Pepper (Chair, Vermont Cannabis Control Board)]: Yeah, and I don't want to speak for Ted and maybe this is the appropriate committee, but I did work with him on the exact fiscal, on the fiscal note, if one of our cultivators that currently exist were to renew at this reduced rate, it's about 170,000.

[Sen. Alison Clarkson (Chair)]: Oh, 170,000.

[Sen. Randy Brock (Vice Chair)]: 170,000.

[Sen. Thomas Chittenden (Member)]: That's what mixed

[Tucker Anderson (Legislative Counsel)]: That's what mixed

[Sen. Thomas Chittenden (Member)]: I excluded mixed.

[James Pepper (Chair, Vermont Cannabis Control Board)]: You excluded mixed. Okay, then yes.

[Sen. Alison Clarkson (Chair)]: So 170?

[James Pepper (Chair, Vermont Cannabis Control Board)]: I can look at the numbers.

[Sen. Thomas Chittenden (Member)]: In this draft, I excluded six cultivators, and this is just purely outdoor growers, and that I believe is about 100 to 120,000 loss rate.

[Sen. Kesha Ram Hinsdale (Member)]: We took the studies out

[Sen. Alison Clarkson (Chair)]: of all of our other bills. Yeah. Thank you, Alison. So with that in mind, do we have a green light from this committee for Thomas to take it to finance? How are people No, no.

[Sen. Thomas Chittenden (Member)]: We're gonna build five names of us.

[Sen. Alison Clarkson (Chair)]: Yeah, happy

[Sen. Randy Brock (Vice Chair)]: to talk to finance.

[Sen. Alison Clarkson (Chair)]: Good, good. I'm

[Sen. Thomas Chittenden (Member)]: not gonna change the effective date, but I'll include that.

[Sen. Alison Clarkson (Chair)]: I would add the effective date.

[Sen. Thomas Chittenden (Member)]: Pushing it out of here?

[Sen. Alison Clarkson (Chair)]: Yeah, because people are counting on the revenue in FY '27, although this would be

[Sen. Thomas Chittenden (Member)]: If that gets it across the finish line, I'd like it, so.

[Sen. Alison Clarkson (Chair)]: Anyway, have it in your back pocket.

[Tucker Anderson (Legislative Counsel)]: I'd like to see

[Sen. Randy Brock (Vice Chair)]: it earlier because of the problem with growers right now that are experiencing some of our time here.

[Sen. Thomas Chittenden (Member)]: So I'm not sure you're okay

[Sen. Alison Clarkson (Chair)]: with that.

[Sen. Randy Brock (Vice Chair)]: We can increase the cost. General, are

[Sen. Kesha Ram Hinsdale (Member)]: we aware of any other amendments? I mean, because now we have a second answer reading,

[Sen. Alison Clarkson (Chair)]: but are we aware of yes.

[Sen. Thomas Chittenden (Member)]: Not on this, but I do need to bring something on tobacco that there's another amendment. Senator Bryan

[Sen. Randy Brock (Vice Chair)]: would like to have this committee.

[Sen. Alison Clarkson (Chair)]: Okay. So are we all okay with this? Can we discuss s one ninety eight tomorrow morning? Okay. So tomorrow morning, we're gonna slightly adjust our schedule. Tucker, can I speak with you before you disappear fully? Thanks. Tomorrow morning, we'll discuss S-one 198 amendment and the housing amendment. Two amendments, Desi. Thank you. Two amendments to the committee. Okay.

[Sen. Thomas Chittenden (Member)]: One we think we're all aware of is the new one that Ron just copied on that I'm gonna say. Yeah. Maybe she commits on this. Great. You you think you'll like it?

[Sen. Alison Clarkson (Chair)]: Well, might like it the best. I mean, David's gonna like it. This

[Sen. Thomas Chittenden (Member)]: is tobacco. Tobacco. And

[Sen. Alison Clarkson (Chair)]: cannabis okay, I think with that, everybody, thank you. That was, we moved our fifteen minutes very productively. And with that, we say, and we will see you.