Vermont Growers Association

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CCB and Legislative Update

The Cannabis Control Board closed out its first rules amendment process late last year, which went into effect on October 21, 2023, and we anticipate the Board reopening the amendment process again later this year. The State House convened on Tuesday, January 9, 2024 and there has already been a slew of initial activity surrounding cannabis-related bills this legislative session. As the market approaches its third year, fiscal projections are being surpassed while foundational equity work remains unfinished, the importance of at-scale regulation begins to come into focus as producers see early signs of seasonal price compression, and newfound opposition to some policies we've managed to codify over the years have surfaced compelling us to defend moments of progress while simultaneously fighting for needed reform.

The Vermont State House in Montpelier in the winter.

As we approach the end of February, there is much to catch up on. The Cannabis Control Board closed out its first rules amendment process late last year, which went into effect on October 21, 2023, and we anticipate the Board reopening the amendment process again later this year. The State House convened on Tuesday, January 9, 2024 and there has already been a slew of initial activity surrounding cannabis-related bills this legislative session. As the market approaches its third year, fiscal projections are being surpassed while foundational equity work remains unfinished, the importance of at-scale regulation begins to come into focus as producers see early signs of seasonal price compression, and newfound opposition to some policies we've managed to codify over the years have surfaced compelling us to defend moments of progress while simultaneously fighting for needed reform.

The First Rules Amendment Process

The Cannabis Control Board voted to open a rules amendment process on November 30, 2022, went through a several months-long process, adopting the updated rules on October 6, 2023, and following a statutory 15-day buffer after adoption, went into effect on October 21, 2023. There are about 20 changes to rule 1 (link), about 10 changes to rule 2 (link), and a substantive change to rule 4 (link). While many of the rules amendments are technical in scope, meaning the CCB was already operating that way, the revisions are to bring the rules up to speed and reflect how the Board operates, such as the definition of employee, while there are some significant changes, such as prohibiting time and temperature sensitive products. We held an event going over the details of the rules changes, which you may find here (link).

The State House

Lawmakers in Montpelier opened the legislative session on Tuesday, January 9, 2024, and will adjourn on Thursday, May 9, 2024. This year is the second half of the biennium, meaning 2-years of legislative work without clearing bills, and there are some new cannabis-related bills along with the bills announced last year.

The new cannabis-related bills introduced this year are Bill H.612, a miscellaneous cannabis bill from the Cannabis Control Board and sponsored by Representative Michael MaCarthy (link), Bill H.549, an act relating to the siting of outdoor cannabis cultivation sponsored by Rep. Karen Dolan and Rep. Lori Houghton (link), and short-form Bills H.833 and H.834 both sponsored by Representative Matthew Birong, which seeks to cap the number of cannabis establishments (link) and establish a cannabis special events license (link).

We have been busy working in and out of Committee on these bills and others, including lifting language from our legislation, Bill H.426 (link) and S.127 (link), which includes language for equity funding and using the cannabis excise tax to begin to dismantle system racism, public consumption, and direct-sales allowances for small producers. We will have more on these individual pieces of legislation over the next few weeks.

The Market Approaches Its Third Year of Operation

Opening day for the Vermont adult-use market occurred on May 1, 2022, and will begin its third year of operation this Spring. The adult-use market finds itself at a bittersweet moment, such that the market is earning the state money and surpassing fiscal projections, yet foundational equity work remains incomplete, and producers begin to feel a degree of seasonal price compression and contemplate scale-appropriate regulations to bring greater balance.

VGA Business Member and licensee Garcia Grows shared with us last year that they noticed the cannabis excise tax surpassed the alcohol excise tax in May 2023, and total sales have surpassed $100 million. The CCB voted to close Tier 4 and 5 to initial license applications (link), and we are seeking to strike those larger tiers of production altogether from the market structure in the State House this year. Find this market structure reform policy and more in our 2024 Policy Agenda (link).

Newfound Opposition

We close out this CCB and legislative update by sharing some challenges in our attempts to bring equity, accessibility, overall improvements, and greater resiliency and viability to the marketplace.

Bill H.549 is essentially the Town of Essex Selectboard working with legislators to effectively reverse one of the regulatory benefits of farming applied to outdoor cultivation, the local bylaw exemption that farms are afforded in Vermont. While the issue of siting outdoor cultivation in densely populated areas in Vermont is an important conversation to have, the bill in its current form is a blanket prohibition on outdoor cultivation in areas with a population density above 500 persons per square mile and property connected to municipal water and sewer is far too overreaching.

Bill H.834 is a short-form bill that seems to establish retailers at the center of its concept for a special events license that may include consumption and on-site sales allowances but excludes producers from participating. Though a special events license is a good conversation to have, it should not be prioritized over public consumption and DTC allowances for small producers, both of which, if enacted, would allow for consumption at events and arrive there in a more fair, just, and equitable way.

Between the State House and the Cannabis Control Board, there's much work to accomplish together this year to improve the market for all. We have been bringing licensees with us into the State House with us to educate and urge lawmakers to complete the foundational work of building out fairness and equity in the market. So, stay frosty, we will have action alerts and more detailed explanations and analyses in the coming days and weeks.