In January 2018, Vermont Governor Phil Scott signed a bill to legalize limited marijuana possession by adults — one ounce or less and two or fewer mature and four or fewer immature pot plants. But the state did not craft a law to regulate a commercial cannabis market. The legislature is expected to act on such legislation during the upcoming session. Vermont Attorney General T.J. Donovan held panel discussion in Burlington Thursday evening that included panelists from Maine and Massachusetts to discuss their experiences with a regulated market.
The Vermont legislature is expected to consider bills in the upcoming session to “…establish a comprehensive regulatory system for the production and sale of cannabis and cannabis products…” House bill 250 and Senate bill 54 are similar but must be reconciled.
Vermont Attorney General T.J. Donovan, a Democrat, convened the “Conversation About Cannabis: Lessons From Our Neighbors” discussion. Donovan says the state is currently in legal limbo. “I think Vermont is in a really weird position when it comes to cannabis. In fact, I think we're probably in the worst position we can possibly be in where we have legalized possession of cannabis but we've remained absolutely silent on how Vermonters obtain it. We need a regulated marketplace in this state now.”
Donovan brought in regulators, bankers and cannabis entrepreneurs from Vermont, Maine and Massachusetts to discuss challenges and what has worked. Massachusetts-based Community Growth Partners founder Charlotte Hanna will open her first store in the Berkshires in early 2020. Despite her extensive real estate experience in places like New York City and San Francisco, she told the Vermont Attorney General entering the commercial cannabis market in Massachusetts is the most difficult thing she’s ever done. “The way the regulations were designed in Massachusetts were very well intentioned, sort of trying to push the responsibility down to the municipalities. But what happened as a result of that was that it became very difficult to figure out where to go. A lot of municipalities banned it. Then I had to start going through the regulatory process which took a very long time.”
Foley Hoag LLC partner Kevin Conroy co-chairs the Boston firm’s cannabis group and advises clients across the country regarding regulatory compliance. He provided a quick overview of Massachusetts’ regulations, noting that an adult use referendum was passed in 2016. There are now 35 dispensaries across the commonwealth expected to generate about $600 million in cannabis sales next year. A 20 percent tax is expected to generate about $125 million dollars for the general fund. “Just a couple of lessons that we have learned in Massachusetts. One is we have this very strong local control in Massachusetts for our cannabis businesses. We gave too much control to our municipalities. The second thing I would say is, we have struggled some with diversity in our ownership. This is a very expensive business to open. One of the things we found is that we need better state loans. We need better state funding going to help small business owners open these businesses.”
Maine Office of Marijuana Policy Director Erik Gunderson discussed a number of policy implementation challenges. One thing he noted is that few states legalizing cannabis are aligning their tax-and-regulate recreation market with their medical marijuana market. “The two different programs are like oil and water. One of the biggest things that keeps me up at night is trying to figure out a way, and I steal this term from the executive director in Massachusetts is the lift and shift: how to lift and shift the medical program to align with the adult use program while serving its purpose. There is a significant difference between patients and consumers. So doing it right both for the patients, the program participants in the state it was a very difficult task.”
Vermont was the first state to legalize marijuana possession legislatively rather than by voter referendum.