The legislation has multiple goals: improve racial equity, address concerns of small growers, and perhaps establish a fund to provide loans and grants to help people of color and others affected by outmoded marijuana laws to get involved in the new retail marijuana system.
Critics — including racial justice groups and Gov. Phil Scott — said the retail marijuana law that took effect last year fell short in addressing racial equity in the taxation and regulation of cannabis.
Under the new law, cannabis businesses won’t be set up, and sales won’t begin, until 2022.
The Senate Committee on Government Operations is recommending that the Agency of Commerce and Community Development be assigned to design a “Cannabis Business Development Fund” and a system for loans and grants to “social equity applicants” — that is, people disproportionately hurt by marijuana criminalization.
“There are some people who have been more impacted and probably less able to come up with the funds and the business plans and stuff because of the impact that the prohibition laws have had on them,” said Sen. Jeanette White, D-Windham, chair of the Senate Committee on Government Operations.
The committee plans to ask the Cannabis Control Board, which will regulate the cannabis market, and its 12-member advisory committee to make recommendations to the Legislature on who would qualify as a social equity applicant.
The committee’s proposal needs final approval from the Senate Committee on Judiciary, which is handling the cannabis bill, S.25, and expected to vote it out of committee on Friday.
The Vermont Racial Justice Alliance has proposed its own plan to establish a Cannabis Business Development Fund, which is contained in a House bill, H.414. Under that legislation, social equity applicants would include businesses whose owners — or at least 10 of its employees — include a majority of individuals who have been arrested for or convicted of cannabis offenses that are now eligible for expungement, have family members who were affected by marijuana laws, or who live in a “disproportionately impacted area” — defined as a part of the state with high poverty, and a history of high rates of marijuana arrests, convictions and incarcerations.
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But some legislators questioned whether the criteria for social equity applicants would be too broad.
In the Senate Judiciary Committee on Tuesday, Sen. Joe Benning, R-Caledonia, noted he was arrested on a marijuana-related charge in 1975. At the time, he said, he played in a band, and while he didn’t smoke marijuana, others in the group did.
Police targeted the house they were playing at, “in order to raid it and make a demonstration in my town,” he said. Despite the arrest, he was able to go to law school, pass the bar and is now a criminal defense attorney in Vermont.
“I don’t think that I would fit the definition of anybody’s intent here of having some socioeconomic disadvantage,” he said.
White said many who shouldn’t qualify as social equity applicants could do so under the House proposal.
“I know plenty of people who fit into that category of having been arrested, maybe not even convicted, but they were arrested for an expungeable crime, and they live in one of these areas, but in no way should they be considered a social equity applicant,” she said Tuesday.
Speaking to the judiciary committee on Tuesday, Mark Hughes, executive director of the Vermont Racial Justice Alliance, said that Benning’s case was an anomaly.
“This is not an exercise of trying to figure out how to keep white people out; it’s an exercise of trying to make sure that we address those who are disproportionately impacted,” Hughes said of the proposal.
“And yes, our target is those folks who are American descendants of slaves and folks who are Black, Indigenous and other people of color. Why? Because that is what the system has historically disproportionately impacted,” he said.
Hughes told the judiciary committee it shouldn’t be left to the Cannabis Control Board to design the policy “because we’re going to get what I believe is a poorer outcome if we kick this one, if we punt this one.”
The government operations committee’s plan includes a $500,000 appropriation for the Cannabis Business Development Fund, and the fund would also receive 3% of gross cannabis sales made by medical marijuana dispensaries between March and October of 2022.
Under the legislation that legalized pot sales in Vermont, the state’s existing medical dispensaries get a head start in selling cannabis to the public. Retail pot shops can’t open until October of next year.
On Friday morning, the Senate Committee on Agriculture is expected to recommend that S.25 include a cap on the amount of space that marijuana cultivation businesses can use to grow cannabis indoors and outdoors.
A group representing small marijuana growers — represented by Rural Vermont, the Northeast Organic Farming Association, and others — has called for provisions to ensure that as many small, local farmers as possible have a share of the marijuana market.
Specifically, they called for limits of 10,000 square feet for indoor growing operations and 40,000 square feet for outdoor operations. Sen. Bobby Starr, D-Essex-Orleans, chair of the committee, has expressed openness to the proposal.
The coalition representing small cultivators has also been pushing for a craft licensing structure for boutique growers, changing current law so that marijuana is viewed as an agricultural product. The current statute left many of those decisions up to the Cannabis Control Board.
The Scott administration supports the loan fund and several other provisions being considered by lawmakers, but some aspects of the legislation could raise concerns for the governor.
Among them is a proposal likely to make it into the bill that would require all towns to vote before 2023 on whether to allow marijuana establishments within their borders. If towns didn’t vote by then, they would be considered “opt-in” municipalities, where cannabis businesses are permitted.
“[One] key tenet of Gov. Scott was for towns to opt-in to hosting retail establishments,” Monica Caserta Hutt, Vermont’s chief prevention officer, wrote in a letter to legislators. “The language being considered to require municipalities to hold a vote by 2023, otherwise considered to have opted-in, effectively changes the construct from opt-in to opt-out.”
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