Vermont Legislature SmartTranscripts:

[Speaker 0]: Welcome

[Brian Collamore (Chair)]: in to the Senate Government Operations Committee meeting of Friday, 01/23/2026. First today, witnesses representing the Cannabis Control Board. And I have to admit, I feel like there's a tenuous connection in terms of jurisdiction to this committee, but glad to have you in. And James Pepper can start us off. Do you know everybody on the committee?

[James Pepper (Chair, Vermont Cannabis Control Board)]: Well, I hey. James Pepper. John Morley. Very nice to meet you.

[Speaker 0]: Congratulations on being appointed. Yeah. Thanks.

[James Pepper (Chair, Vermont Cannabis Control Board)]: Well, for the record, James Pepper. I'm the chair of the Vermont Cannabis Control Board. I do have my other two board members in the room, so if you need to phone a friend, they're right here.

[Speaker 0]: I'd appreciate it both.

[Tanya Vyhovsky (Vice Chair)]: She's over here.

[James Pepper (Chair, Vermont Cannabis Control Board)]: Julie Holberg is a former select board member. I was briefly. Yeah, and has been handling a lot of our municipal issues, so, you know, there is, I think that the main intersection between our work and the work of this committee runs through those kind of local regulation sections, But I, you know, I did want to just say that at the outset, our issue, whether it's the medical use, adult use, hemp, outdoor cultivators, tax rates, you know, our issue touches at least five or six different committees, and the committee of the primary jurisdiction is the Senate Economic Development. I think there are some issues that are very relevant for this committee either if you wanted to do a committee bill or if you just wanted to kind of look at what the Senate Economic Development is doing. So you just introduced a bill and I know Senator White has a total spot. But I think the general gist of kind of how we're approaching this legislative session is we need to have a little bit more regional coordination with our neighboring states. There are a few things happening at the federal level that indicate that the era of purely intrastate cannabis markets is probably coming to an end. So, you know, the majority of Americans live in states with an adult use program. It's 24 states, but they're the big ones, California, New York. So, you know, over 50% of Americans live in a recreational cannabis state. So, and then you have 24 states that have doggies programs, I think it's 40 that have medical. But once you hit that imaginable number of 30 and there's 60 senators, you may start seeing actual legislation passed at the federal level. You also very recently have a newly confirmed director of the Office of National Drug Policy Center, who is admittedly on the record as being pro legalization. That's the first time that's happened. You have a Republican administration for the first time since the passage of the Controlled Substance Act acknowledged medical benefits to cannabis and asked them to be rescheduled to Schedule III. And part of that executive order also was asking, you know, President Trump asking his administration to establish an allowable THC threshold, that THC is an intoxicating component of cannabis for full spectrum hemp products that would legitimize their interstate commerce. So that at the federal level means that we may want to start having a little bit more coordination with our neighbors with respect to things like packaging, labeling, testing procedures, product safety procedures, because we may start seeing these products start coming across our and on the flip side, us exporting products. You know, it also means that we need to do what we can right now to ensure that our cannabis businesses can be competitive in that environment. Know, Vermont is doing things very differently than every other state on the craft sense, and the just sheer number of licensees that we have and the size of them, they're tiny compared to almost every other state. 75% of our cultivators are growing on a thousand square feet of canopy or less, you know, that doesn't even register in most other states. You know, most states, the smallest tier is 5,000 square feet. So I think what I've seen so far of the economic development, or the bill has been referred to economic development, is really in that vein, trying to find ways to make our licensees more competitive and how to kind of create a New England style regulatory framework around packaging labeling transaction of its purchase of edibles and things like that. But with respect to this committee, I think one issue that comes up year after year is retail density. You know, we're seeing that you know, there's 15, or 11, sorry, it's gone down a little bit in recent years for the response. There's 11 retailers in Burlington. I don't know any other kind of single use, you wouldn't have 11 Italian restaurants in Burlington, Maybe it would. I don't know.

[Tanya Vyhovsky (Vice Chair)]: It's a lot of them.

[James Pepper (Chair, Vermont Cannabis Control Board)]: Yeah. But I don't think you have 11 grocery stores.

[Tanya Vyhovsky (Vice Chair)]: Definitely not 11 liquor stores.

[James Pepper (Chair, Vermont Cannabis Control Board)]: Right. I think there's three liquor stores in Burlington. And and then, interestingly, I mean, there's six in Rawlins. Interestingly, there's zero in South Burlington or Willis, and that is

[Speaker 0]: Three in Woodstock. Three in Woodstock. There he is.

[James Pepper (Chair, Vermont Cannabis Control Board)]: And, you know, this is that kind of concentration of retail is a direct result of the opt in opt out presumption. So one of the components that makes Vermont unique, our market unique, is that before a town can host a campus retail establishment, the voters of that town at a town meeting or just kind of any generally announced election need to hold a vote about whether they're going to allow retail. And there was an initial kind of surge of interest that's really died down, and so now, you know, whereas Burlington has 11, South Burlington most of them have zero, because they have not opted in. So I think if it weren't for that opt in opt out provision, I'm not trying to weigh in on the policy, I'm just trying to explain the consequence of it. If it weren't for that, if that presumption splits, I think you would see a natural distribution of cannabis retailers across the state. Another kind of really important piece of that, which I think is actually these two issues are intertwined is the language around how retailers can be zoned globally is pretty confusing. And I think what we've seen as a result is towns are not adopting zoning ordinances or use ordinances or bylaws around cannabis retail citing. The board had no authority to do this, know, he gave us about 50 different rulemaking directives. Not once was retail siting or any kind of cultivation siting been allowed and authorized rulemaking authorization for the ward. So we couldn't do anything. I think you assumed it would be a local issue. You know, if the town only wanted five of these things or two of them, and they didn't want them to be near parks or schools or, know, childcare centers, that they would be allowed to kind of do that locally. But, so there's a section of the law in cannabis style saying you have all the same ordinance and by law authority that you would have for any other business, except in a different part of the law, you can't commission the issuance of local license in a way that would prohibit the operation of the cannabis establishment. And I think those two are a little bit in conflict. We had the zoning administrator from South Burlington kind of talk to us about this issue. You know, he's got seventeen years being the director of planning and zoning for South Burlington. He couldn't figure this language out, and, you know, that's a very well resourced town. And, you know, the consequence of getting it wrong is you might get sued and have a long lawsuit. And so I think a lot of towns are just staying away from this. What we, you know, the board would like to see a more normal distribution of retailers around the state, but I think you have to kind of fix this, you know, local zoning issue first to allow, give towns time to, you know, figure out where they want these things, what makes the most sense, you know. Senator Vyhovsky?

[Tanya Vyhovsky (Vice Chair)]: I, it's been so long since we did I the original thought there was some prohibition at the state level to these establishments being near schools and

[James Pepper (Chair, Vermont Cannabis Control Board)]: There's a drug free school zone. You can't have can't think this is unclear. I think it applies mostly to illegal sales of cannabis. There's an enhancement in the criminal laws around dispensing cannabis within 500 feet of school grounds. We incorporated that into our rule. Just we kind of cross referenced the statute. It just says you can't have a cannabis sale within 500 feet of a school, so no currently no retailers are within 500 feet of a school. But that's pretty much the only thing that exists as far as any sort of retail site here in the state. Do

[Tanya Vyhovsky (Vice Chair)]: you know and you may not, because you're not Department of Liberty and Lottery, but do you know if there's similar prohibition on liquor stores being your schools?

[James Pepper (Chair, Vermont Cannabis Control Board)]: I don't know the answer.

[Tanya Vyhovsky (Vice Chair)]: Okay. Like I said, I I appreciate that you may not know that. Right?

[Speaker 0]: I mean, tell.

[Tanya Vyhovsky (Vice Chair)]: I I know we'd have to check. Okay. I just I know that they're sort of the vibe, for lack of better, look, my brain is mushy Friday, has been sort of that we're gonna treat cannabis similar to how we treat alcohol. And so I'm trying to align with things as much as possible in my mind.

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

[Tanya Vyhovsky (Vice Chair)]: That's why I'm asking, not, I kind of appreciate that you don't have

[Speaker 0]: the answer. So as we look down the pike, just sorry to interrupt you here, but we are looking very closely at this next Friday. Tucker and Pepper are coming in to discuss the implications of the federal changes and how we might prepare for them. It's very important we need to be prepared because it could happen. And it would be great to to trigger some of these changes. Also, it's just great to be prepared. And then just get compact on these things would be great. But to go to your question, Tanya, I'm thinking that I'm gonna ask Tucker because one of the implications long term, depending on how full that goes, is what that relationship between liquor and lottery and the cannabis support might be and how they integrate. I'm going ask Tucker to do a side by sides on some of the cannabis and liquor and lottery laws and how they compare in that regard and how we can create more parity. Wonderful. Does that make sense?

[James Pepper (Chair, Vermont Cannabis Control Board)]: Oh, Yeah, definitely. Especially, I mean, I think you're gonna hear, maybe not in this community, but from the hemp people, they want to be selling low THC hemp products in bars, restaurants, and anywhere they sell beers. Yeah.

[John Morley III (Clerk)]: So

[James Pepper (Chair, Vermont Cannabis Control Board)]: on the citing, know, I just want to stress that the cannabis board is not in the best position to know where to make a one size fits all retail setting rule. I mean, we were okay with doing the 500 feet from school because that is honoring the at least the intent of the drug free work zone or drug free school zone. But, you know, towns are gonna differ wildly about whether they want these in a place that has parking or on the outskirts of town or, you know, whether they want it on a police route in case there's a break in or some kind of issue, there's a rather response. We can't really craft a rule elegantly that allows towns, they will fit every town, It really should be a local decision, so I think cleaning up that section of, you know, Title VII around local authority is probably a good idea, especially if you're gonna try and expand, change the opt in opt out presumption or gonna have a statewide vote. Those called concert with landlords. That helpful? So they're in Morley?

[Tanya Vyhovsky (Vice Chair)]: Oh, please. Yeah.

[John Morley III (Clerk)]: In the Northeast Kingdom, there's actually some towns with noes on it. Yes. And so somehow the liquor board or the liquor control determines where liquor stores are going to be located in some of those towns. Would you envision something like that here in some of the towns with no zoning? Are you gonna provide

[James Pepper (Chair, Vermont Cannabis Control Board)]: the guidance to where they can or should not go? Again, I don't think that we should be dictating to the locals what they do or don't want. Even without zoning, a town can form a local control commission. And those those local control commissions could be authorized to do this work, you know, even if they don't have zoning. I don't know if they will, but Right. I know. It's difficult. I mean, this is a very challenging area of the law because a lot of times this issue doesn't get raised until you have an actual live person trying to put it into place somewhere in the middle. So Right. Everything's Right. And then the and then the board, you know, these political bodies are stuck between, well, I have this business owner that wants to go in, and we want this brand list to increase. We want the revenue, but, you know, it's you know? But it's right next to a playground, you know? So, there is there is the authorization already to form a local control commission, and they could just take on the work of saying where in the town they would want these things. Another issue that was raised by the Vermont League was around revenue share with the, locals that host one of these. Currently what happens is, if you do form a local control commission, there we are required to send any license applications to our local control commission before we issue the license, and get their sign off, and, they are allowed to charge a $100 fee. And that fee was set, you know, in 2022, with the rest of the fees. And really there is no understanding of what the cost to the locals of hosting a cannabis establishment should be. If this is purely the administrative work of reviewing an application, then $100 is probably about right. In fact, we have a municipal kind of survey that says, yes, you're just thinking about how long it takes us to read this application, you know, assemble the control commission and read the application, dollars 100 is about right. But when you think about maybe some of the externalities of posting a cannabis retail establishment or a canvas license, it might be more beneficial and may encourage more towns to opt in if they saw some benefit other than this for dollars. But, you know, again, talking about revenue, the board doesn't really get involved when it comes to how you guys spend this money or how you're approaching it. But we have in our original fee report suggested that, you know, it may lead to more towns outfielding if there was a revenue share.

[Brian Collamore (Chair)]: Who decides it's gonna be on

[James Pepper (Chair, Vermont Cannabis Control Board)]: the local control board? It's a local decision, they're usually the Source? Source? It's usually some subdivision of the select board. Select board would create it. Or the select board, you know, they'll gabble out of their select board meeting, gabble into the local control meeting. It's usually something Are there any requirements or restrictions about who could serve on that board? Can you be

[Brian Collamore (Chair)]: a a licensed cannabis operator and still be on that board?

[James Pepper (Chair, Vermont Cannabis Control Board)]: I don't know the answer to that. Need to

[Tanya Vyhovsky (Vice Chair)]: It's not there are not outlined like that in the statute. Yeah. Don't Julie just introduced you. Oh, Julie Hilbert, for the record, it's not my recollection is that that the qualifications are constructed out lines like that in statute, but the town would have their own ethics policy. Right.

[Brian Collamore (Chair)]: And there's no set number of No. Board

[Speaker 0]: No. No.

[James Pepper (Chair, Vermont Cannabis Control Board)]: And that can just if you're interested in looking into this, I mean, I'm happy to share this this temptation that it created, that it authorized the creations. He's saying that it's, you know, kind of all the everything they can do with Tucker and see if he wants if he wanna walk through this section. Well, I've Yeah. I don't I don't know. I don't certainly need to

[Brian Collamore (Chair)]: get knee deep in it. I'm just Yeah.

[James Pepper (Chair, Vermont Cannabis Control Board)]: I'm kinda curious. I I think it's The local control commissions. Yeah. There's like 50 of them. Think there's 80 right around 80 towns have opted in to retail sales, but this is this goes beyond retail. This is just So this is

[Speaker 0]: for they would have established them for liquor also? Not necessarily. Yeah.

[James Pepper (Chair, Vermont Cannabis Control Board)]: Yeah. This was modeled after liquor, but liquor control, there's special events. They, they, they, the liquor control folks need much more, they've local control, liquor control. Local control. Local control. Yeah. Have more to do. Right. You know, I can talk more about any of the other priorities of the board, but really as it relates to government operations, it's really about, to me, just clarifying these local issues so that towns can really have a little bit more control over how these feel in their town, where they're located. Mean, the hours of operation is already covered by the assistance issue. But as far as the signs, ordinances, what data I think is important. For us, I mean, we, as you know, we have paused issuing new cannabis license, retail licenses. You know, we're at 180. By way of reference, there's eighty eighty or 81 liquor stores in the state, eight zero two Spared stores. I mean, is that the right number? I don't know, but

[Speaker 0]: it does feel like the towns that they're in are are saturated. So more local control, or whatever that may mean. Opt in, opt out. That's also this committee. Yeah. I mean,

[James Pepper (Chair, Vermont Cannabis Control Board)]: I think what we've said

[Speaker 0]: in And municipal. Sharing. Yeah,

[James Pepper (Chair, Vermont Cannabis Control Board)]: and all those issues are all reopening old wounds because they were negotiated very carefully five years ago or three years ago, you know, in 2020. But, you know, now that that was before we ever had a market, now that we have a market and we're living with the of those decisions, it's certainly worth discussing them with. Senator Vyhovsky?

[Tanya Vyhovsky (Vice Chair)]: I certainly appreciate acknowledging sort of the opening of holds rooms, and I think when we're building a ship while we're sailing it, sometimes we realize that things need to change. So I I also appreciate everyone who's disturbed with me. It's a lot can't be hard conversations. Mhmm. But I also think we have a lot more information now than we did before. Yeah. I know so the other thing that I just want to think about would you say there's 81, eight zero two liquor stores? Right. But that's not the only place you can buy alcohol. You all have breweries and every gas station that sells beer and wine and every grocery store that sells beer and wine.

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

[Tanya Vyhovsky (Vice Chair)]: Every restaurant. So I think that's not necessa- like, I don't know that that's the- just because alcohol is so much more ubiquitously available, just in those spaces.

[James Pepper (Chair, Vermont Cannabis Control Board)]: And we are allowed, we were authorized to create tiers of the various license types. One tier that we proposed early on was having a limited retail for towns that, you know, are tiny, know, towns that really don't have the capacity to have anything more than a general, you know, why couldn't you, I mean, there are two spirit stores within gas stations,

[David (Dave) Silverman (Vermont Cannabis Action Fund; retailer)]: like

[James Pepper (Chair, Vermont Cannabis Control Board)]: why couldn't you have a little cannabis kiosk behind the counter 21 plus that has, they can only sell a limited number of products, just file or maybe just have something that distinguishes them, but can only be available in these kind of towns with less than like 2,000 people. We discussed it, it never got a fee associated with it, so it didn't happen, but it could be another way to increase the geographic distribution. I I think one thing that's clear pre legalization and now is that there are cannabis consumers in every community, and the more you restrict access to cannabis, the more you're shifting those consumers to alternative markets.

[Tanya Vyhovsky (Vice Chair)]: Appreciate that. And I imagine some folks will take up that idea in for consideration in economic development. My question for you, and it may be a bit of an opinion question. So I know that we've had instances, particularly in gas stations and convenience stores, of illegal sales of, is it delta nine THC?

[James Pepper (Chair, Vermont Cannabis Control Board)]: There's synthetic delta nine, there's delta eight, there's HHC, there's the whole alphabet soup of synthetic cannabinoids, yes, that are

[Tanya Vyhovsky (Vice Chair)]: And so I know that that illegal sale is already happening in some of those places, and I just I wonder if you have any sense of whether or not allowing the legal sale would eliminate that illegal sale or make that illegal sale easier, or what are we doing to curb that illegal sale now? Right. Because gas stations are selling cannabis.

[James Pepper (Chair, Vermont Cannabis Control Board)]: Right. So we investigate complaints of those, but we're not proactively in the gas stations and the convenience stores. So when we get a complaint, we'll go in, and DLL is in them, so sometimes when they see a suspicious product, it looks like, I I did a presentation for Synod Ag about all these kind of copycat products and, you know, synthetically infused hemp products. We get a complaint, we go in, we test them, confirm that they are an illegal product, leucromide, but they do contain either THC or synthetic cannabinoid, and then we usually just have a conversation with the purveyor of those because usually these, they've been kind of sold a bill of goods about them. But y'all know this is Farm Bill compliant, this is an early legal product. But no, they get you high just like anything else, you'll fail a drug test if you drive away and start drinking THC seltzer, and you will be intoxicated. So, to me it's really important to continue to do that. Not much we can do currently about the online sales, because they're really challenging to get ahead of, and that's not just true of these illegal hemp products, that's true of illegal tobacco products as well. Senator Clarkson.

[Speaker 0]: So it does, that goes back to the, you know, the current lottery and cannabis boards and these. Have you ever have do you ever partnered with well, we have another of the committee's possible jurisdictions would be enabling DOL because they have a whole enforcement unit. You don't?

[James Pepper (Chair, Vermont Cannabis Control Board)]: We well, we do. You you do have an enforcement unit? Yeah. We have

[Speaker 0]: How many offices do you have?

[James Pepper (Chair, Vermont Cannabis Control Board)]: I think seven, but they're not they're not sworn law enforcement.

[Speaker 0]: They're not sworn law enforcement. Right. Unlike DOLs. Anyway, so you do have an enforcement. Okay. I wasn't gonna say on that.

[James Pepper (Chair, Vermont Cannabis Control Board)]: We do. And I think

[Speaker 0]: of you being so few staff, but I guess you have more staff than I had thought.

[James Pepper (Chair, Vermont Cannabis Control Board)]: Yeah. I think our compliance unit has 71. That could be Okay.

[Speaker 0]: They have how many enforcements how many enforcement actions a year are tracking?

[James Pepper (Chair, Vermont Cannabis Control Board)]: We do about a 100 investigations a month. And I think we had 400 and I I I had a report that I submitted to your committee on this. Had four forty two complaints last year, that went to two twenty ish, endorsed in action.

[Speaker 0]: That's right. Okay. I'm sorry. Forgot.

[James Pepper (Chair, Vermont Cannabis Control Board)]: Yeah. But, we also had an MOU with DLL's enforcement team to cover the cost of them

[Speaker 0]: doing some work with us. And you already have it. Doctor.

[Rebecca “Becca” White (Member)]: Yeah. I just wanted to ask one I mean, I wanna hear about your question on the bill that I have, two seventy six around municipalities. You kind of alluded to it, I, you know, if you have a specific statement. But I do just want to ask because I was very disappointed that we did not get cannabis farmer markets, farmers markets. That just seemed like such an awesome opportunity to have, like,

[Tanya Vyhovsky (Vice Chair)]: the Vermont

[Rebecca “Becca” White (Member)]: brand on and so I'm wondering, or is that We were disappointed too. I know. And I I do blame the newlyweds specifically for the fact that you weren't there in the negotiations to fight

[Tanya Vyhovsky (Vice Chair)]: for the

[Rebecca “Becca” White (Member)]: weapons market.

[Speaker 0]: I could have been because it was on the floor of the house at the last minute. That was a hole.

[Rebecca “Becca” White (Member)]: Oh, I hadn't realized that. I thought

[Tanya Vyhovsky (Vice Chair)]: that was in conference committee.

[Speaker 0]: Oh, no. It wasn't conference. Oh, okay.

[Rebecca “Becca” White (Member)]: So where is that? Are are we proposing it again? Is it coming up? I would love It's to see

[James Pepper (Chair, Vermont Cannabis Control Board)]: in our committee and we're just sussing it again. Okay. Yes, and for anyone who needs a very brief refresher, the Senate passed what was called the Cannabis Grower Showcase pilot. The idea was that a number of cultivators can team up with retailer and they can hold a event that includes sales only. And the only people that would be allowed into this farmer's market, if that's the word we wanna use, is are people that are age gated, single point of access, 21. All those sales would be tracked, regulated, taxed, and sold to people that are over 21. And yes, I thought it was a very positive idea, mostly because our cultivators have been clamoring for a way to get in front of their customers directly and talk about their growing practices, establish a relationship with their customers. A lot of Vermonters want to know their farmer. They do. They want to know their beer maker. They want to know their maple secure. And it's certainly true of cannabis as well. And you know, it included some really important public safety provisions and some profit sharing provisions so that it would actually be a benefit to the cultivators to do this. And, of course, you know, New York's been doing it for two years. They threw kind of a fluke and a legal hiccup in their licensing structure, grew a bunch of cannabis, then had nowhere to sell. They couldn't issue, they couldn't issue any retail licenses. So out of an emergency rule, their cannabis commission authorized farmers markets. And they went off without a hitch. There's been none of their kind of public safety concerns, like, these gonna be a magnet for robberies? Are there gonna be untaxed sales? Are there gonna be my sales to minors? None of it came true. And after these emergency roles expired, the legislature made them permanent. And so now they're, hopefully, they've had about a year and a half, two years worth of experience holding these farmers' markets, and, you know, I think, I mean, I've always thought it could be a good idea for Vermont, you know, the fact that it was a pilot also meant that we could do it without any additional staff. And, you know, I thought it was a good idea. And senator Carson, as she noted, is gonna reintroduce the idea. And it passed the senate on a voice vote unanimously. There are no there are no opposition to it last year. And then it passed three committees in the House favorably, and then it just got held up on a procedural position on the floor on the last name since she agreed.

[Tanya Vyhovsky (Vice Chair)]: Okay. Well, I'd like to see

[Rebecca “Becca” White (Member)]: that again. And then just if you could have any specific comments on s two seventy six, and I under I we'll be talking about the bill in a moment, but Yeah. Just

[James Pepper (Chair, Vermont Cannabis Control Board)]: So just from the just 30,000 foot view, anything to increase the geographic distribution of these kind of densely areas of density, retail density in state is a benefit, I think, to consumers, to the towns, you know, and we get a lot of opposition from local elected officials. Why do I have 11 stores within a half mile radius? The public health folks have come into the cans board and talked about the negative public health consequences of concentrating retail. And so anything to spread out the existing ones would be very beneficial. Think whether it's through a vote, flipping the opt out presumption, however you want to do is We don't really take a position on that, but I would just hope that in the same bill or in a separate bill, you could also just clean up. Whether you want to give the town's more or less authority, it doesn't really matter, but just clean up the confusion that's in the bill right now as to what they can do. In what Respect respect to what result, like local

[Speaker 0]: Oh, oh, okay. Yes. With respect to psych.

[James Pepper (Chair, Vermont Cannabis Control Board)]: Sighting. Oh, okay. They you know

[Speaker 0]: Where they can locate The town, I

[James Pepper (Chair, Vermont Cannabis Control Board)]: can say, I only want two in this town. I think that should be a local decision potentially if if town says I want them, know, away from parks and churches. You know, I think I just to me, I just I just don't think that we're in a good position to dictate that from the 250 or 247 benefits.

[Tanya Vyhovsky (Vice Chair)]: Thank you. So, I remember the original concern in about not allowing some of that local zoning was that towns might have a vote, have an opt in vote, and then the town might zone it into impossibility. Right. And is that concern gone?

[James Pepper (Chair, Vermont Cannabis Control Board)]: It's not gone. But I also I mean, we've seen I it's not gone. No. There are you know, we brought in I mentioned the director of zoning for. He said that there are very strict protections around spot zoning, so you can't create an ordinance that's just so specific that it's only gonna be in this one spot, and by the way, that spot is owned by the chair of slave of his brothers. So there are some protection baked into the general, you could kind of craft a role, it's got to be 5,000 feet away from a school, a park, a childcare center, you know, federal buildings, you know, and then you need to look at the map, there's nothing left. I don't know if there's a way I don't know if that would be covered under the spot zoning. This is an area of my expertise. But but I do think that the towns, whether you wanna I think they deserve some clarity, you know, about what they can and can't do, because right now, they feel like they can't do much of beach.

[Tanya Vyhovsky (Vice Chair)]: I appreciate that, and I'm absolutely in support of clarity. And I don't believe I'm about to say the words that I'm about to say, but it sounds like we might need to do a bit of a deep dive into the rules around city ordinances, which sounds fascinating. But I I do wanna try to create clarity in a way that gets us to where we wanna be, but I totally support clarity.

[Brian Collamore (Chair)]: Any other questions for Pepper? Okay. James, thank you very much. Thank you. Silverman is here from the Vermont Cannabis Action Fund.

[Tanya Vyhovsky (Vice Chair)]: At least one of Tucker can make even city ordinances interesting. I'm not gonna be an ordinance. Like, might be one.

[James Pepper (Chair, Vermont Cannabis Control Board)]: To Thank you.

[David (Dave) Silverman (Vermont Cannabis Action Fund; retailer)]: And thanks for allowing me to testify today. Just by way of introduction, my name is Dave Silverman. I'm an attorney. I specialize in cannabis law. I'm also the cofounder of Flora Cannabis, a retailer in Downtown Middlebury, and I am the director of the Vermont Cannabis Action Fund or VCAF. VCAF is a coalition of over 50 retailers, manufacturers, and cultivators. We focus on solving the structural issues that are holding Vermont's cannabis market back from reaching its full potential, and we focus on actionable concrete solutions that support the market as a whole instead of pitting one type of licensee against another. I wanna give you a quick Ground floor view of Vermont's cannabis market. The market's in trouble and it needs help urgently. We suffer both from oversupply in the cultivation sector and oversaturation in the retail sector. With one store for roughly every 5,500 residents of Vermont, we rank in the top five most oversaturated states in the country, and we have almost three times as many stores per capita as Massachusetts. On the production side, it's important to note that the CCB based its projections for how much cannabis we need in this market, not on JFO's estimates, which have turned out to be accurate, but on an economic analysis that it had a consultant do. That analysis predicted a market twice nearly twice as large as the one we actually have, about $250,000,000 a year instead of roughly a 150 that we have. That is kind of what has driven structurally an oversupply. As a result, we are seeing price collapses collapses in both the wholesale and retail markets, and those collapses are accelerating as we speak. The CCB hasn't released a lot of data about the market as a whole. There's some structural reasons there for why dealing with their their inventory tracking system being not great, but here on the ground, we know what's up. Total sales per store are down by roughly 25% in the past eighteen months, That's statewide, with many long last long standing stores down 35 or more as our tiny, tiny cannabis market in Vermont is split up into ever more and smaller pieces. New entrants have tended to come in with aggressive pricing as they should, makes business sense, to lure customers from existing stores, but that only prompts the existing stores to cut their prices to match and then demand lower prices from their suppliers. Everyone's feeling the pinch, and business failures are rising. We're We're seeing them, and they're getting worse. Meanwhile, the financial costs of complying with the CCB's regulatory requirements have only risen. With rising costs and falling revenues, there are very few cannabis companies in Vermont right now who have an optimistic view of 2026. It is bad out there, and without some changes, things are gonna get worse, jobs are gonna get cut, and tax revenues are going to suffer. By and large, Vermont's cannabis industry is made up of very good people doing very good things for and in their communities. We have collectively created over a thousand new jobs. These jobs are attracting and retaining a young workforce, something that has, you know, been the political goal across the political spectrum for many, many years here, and we're helping with that. We've created hundreds of new, small, locally owned businesses, mom and pops, and we've raised tens of millions of dollars in new tax revenues, the only tax revenues that people don't complain about paying. And we've done it the right way, we've been responsible in the way we run our businesses, we've been responsive to our communities and the local needs of our communities, and we've done it without the parade of horribles that were predicted when legalization was being debated in this chamber and the other one from 2015 to 2020. Many of you were there. I was there. Yeah. Lot of things predicted that have not come

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

[David (Dave) Silverman (Vermont Cannabis Action Fund; retailer)]: Despite this, the state continues to treat us like the proverbial unwanted stepchild, controlling us, stifling innovation, suppressing our efforts to build our brands and engender customer loyalty instead of celebrating our successes and supporting our growth. For we have proven our worth, for four years in, we have proven our worth and our value to the communities we serve and the state as a whole. We've earned the right to be treated like any other business, and we ask for two things. We ask for regulatory stability, and we ask for market growth. For most of the past two years, the cannabis industry has been feeling whiplash. Every month, it seems, there's a new enforcement priority that requires us to leverage our focus. You may have heard from constituents about the CCB's change proposed change in purchase of living dies a couple of months ago, but that was just the latest in a string of policy shifts, big and small, that place collectively a huge burden on our ability to plan ahead and operate our businesses efficiently. I dread opening the CCB's biweekly industry wide email because I don't want to know what fresh flavor of the month I'm going to have to change to to put my resources towards this month. It it it that is true. Every couple of weeks, I get something new that drives my attention away from my business plan. And we'd like the CCB in 2026 to focus on the basics, and specifically these. We'd like them to build a functional inventory tracking system that pulls data directly from our inventory management systems, which are the industry standard. Instead of the current rudimentary self built, custom built web interface, it requires business owners to collectively waste thousands of hours manually inputting data that already exists digitally. Propagating errors. We want the CCB to launch a public data portal so the cultivators and retailers alike can get a proper view of the market and not have to guess, and we can see what market trends are, we can see what market demand is. Other states have figured this out a long time ago. We don't. And we want the CCD to crack down on illegal sellers, like the unlicensed smoke shop in South Burlington that was recently busted by the police for openly selling to middle schools, middle school students, and on Internet based hemp sellers who ship their intoxicated cannabinoids into Vermont with impunity, without ID checks. This comes by mail, and the CCD could do more. In conjunction with the attorney general, they do not, but they could and they should. Market growth is gonna require policy change, and we suggest five in particular. First, Vermont is just one of three states that limit edibles to five milligrams per serving instead of ten, and just one of two states that gap concentrate potency at 60% THC. These caps drive consumers to the black market, to out of state stores, especially in our in our border communities, and to the Internet where products aren't tested for safety, for quality like they are here in the state. And all of that deprives the state of tax revenues and endangers cannabis consumers' health and safety. It's time to lift these arbitrary caps. Second, by making it illegal to consume cannabis practically in any place other than one's own home, the state is scaring tourists and locals alike away from our source. Think it should be legal to smoke cannabis wherever it's legal to smoke a cigarette, and we think it should be legal to consume ingestibles, edibles, beverages, wherever it's legal to consume alcohol. It's just like, like, treat us like others. Three, Vermont has the strictest limits on cannabis advertising in the entire country, preventing us from reaching new customers and communicating with our existing customers. Many of these restrictions are blatant violations rights, and that alone should be reason enough to change. But the fact is that seven VSA eight sixty four stifles the industry while giving considerable advantage to Internet based sellers and border stores in New York and masks who freely advertise inside Vermont media and to Vermont residents online. Four, while the market is oversaturated statewide, the municipal opt in requirement for retail is the primary driver of local super saturation in places like Rutland, Burlington, Morrisville, and others. We agreed with the board in that assessment. Fewer than a third of municipalities have even held a vote, and we support senator White's bill to require municipalities to hold an opt in vote this fall. This would allow existing retailers to spread out more naturally and support a healthier marketplace without this intense over competition that is not healthy and not profitable for anybody and just squeezes and squeezes and squeezes. And by the way, as prices go down, the public health lobby will tell you, you start seeing more problematic use. And finally, fifth, we need new ways to reach customers outside of our dispensaries. We want to be able to sell cannabis at events, like concerts and festivals and farmers markets as well. Think And of like in a concert, the cannabis equivalent of a beer tent, a jazz fest in Burlington. We want to be able to cater private events like weddings. These weddings, cannabis weddings happen. They just don't happen with the cannabis industry. And finally, we want Vermont to join 12 other states out of 12, including Massachusetts and New York, in licensing cannabis cafes and lounges where customers can enjoy infused foods and beverage in a safe and social atmosphere. And so we ask for your help in supporting the hundreds of struggling small businesses here in Vermont and in preventing the collapse of an important revenue stream for the state. I thank you for your time, and I'd be happy to take any questions you have for me.

[Speaker 0]: Alrighty. Senator Clarkson. David, I I forgotten. I think it's in temporary report that we have in our many but how many retail establishments did we lose last year? Because you said in your thing, we're losing

[David (Dave) Silverman (Vermont Cannabis Action Fund; retailer)]: people So right and I believe we've lost six currently, and I know I know there are some teetering on that. Yeah, there are several teetering, including some who have been around for a very long time. It's really very satisfying. Yeah. I I mean so like I said, statewide, if you just divide the the rev the the total sales reported by the Department of Taxes by the number of stores, it is down 25%. If you exclude the new entrants who haven't been around for a year, what you get is roughly a lot of stores, a lot of existing stores with 35 plus percent reductions in annual sales, and that's not sustainable.

[Brian Collamore (Chair)]: So, everybody else need?

[Tanya Vyhovsky (Vice Chair)]: I want to get too far afield of what this committee actually has jurisdiction over, but I am curious, with some of our neighboring states and the different licenses they have that we don't have, do you have any sense of how that's doing, the impact has been focused on business side, but also from a public health standpoint?

[David (Dave) Silverman (Vermont Cannabis Action Fund; retailer)]: Yeah. So I think the the lounge licenses are very new, and I don't think there's been a lot of impact studies that have come out. The concept of places where people can consume cannabis, that's not really new. It's just been private homes or walking down Church Street or You're supposed to do that. You're not supposed to. Well, in fact, I I I went and pulled data that we we've in the now eight years, eight is years that cannabis has been legal for personal possession, there's been a grand total of 150 citations issued statewide for smoking in public, so that's not something that's being enforced anywhere.

[Tanya Vyhovsky (Vice Chair)]: Well, I imagine it is being enforced perhaps not very justly. I wonder if you have any breakdown on the demographics of those 150 citations.

[David (Dave) Silverman (Vermont Cannabis Action Fund; retailer)]: I was not able to get that, even though I asked.

[Tanya Vyhovsky (Vice Chair)]: Okay. I feel like a law that is not generally enforced, but left entirely to discretion is one place where there can simply be bias that plays out.

[David (Dave) Silverman (Vermont Cannabis Action Fund; retailer)]: That is historically accurate.

[Brian Collamore (Chair)]: Any other questions for David?

[Tanya Vyhovsky (Vice Chair)]: Other than All

[Brian Collamore (Chair)]: right, thank you very much. We appreciate you coming in.

[David (Dave) Silverman (Vermont Cannabis Action Fund; retailer)]: My pleasure. So,

[Brian Collamore (Chair)]: let me suggest we have a ten minute break, the next item up is S-two 76. Correct. And I see Feel

[Speaker 0]: free