After a busy eight months of existence, Vermont’s Cannabis Control Board is on track to meet its May 1 deadline to begin accepting license applications for the state’s burgeoning adult-use market.
“We really tried to hit the ground running to the extent that we could,” said CCB Chair James Pepper, who sat down for an exclusive phone interview with Grown In.
Pepper was one of three board members appointed by Governor Phil Scott at the end of March 2021, along with Julie Hulburd and Kyle Harris. The trio were charged with establishing state guidelines in time to meet the May 1, 2022 deadline to begin accepting applications for adult-use cannabis facilities, with an Oct. 1 2022 deadline for when dispensaries can open for business.
Vermont’s legislature became the first in the nation to legalize adult-use cannabis in October 2020. Previously, states had only legalized it through ballot measures.
The original plan for legalization in Vermont was for the newly-created Cannabis Control Board to be appointed by January, 2021 so that it could start creating regulations while the state legislature was still in session.
“None of that happened,” said Pepper. “So we really had to kind of work at a breakneck pace, to get our rules drafted and make up for that four-month delay.”
One of the first tasks for the CCB, other than hiring two staff members, was to establish its priorities for rule-making, placing an emphasis on social equity, environmental impacts and enabling small craft-grow operations to be successful.
“One thing that the legislature really wanted to do, was to really prioritize small cultivators and not rely on large, corporate multi-state operators to come in and really dominate the market and push out all of the smaller players,” said Pepper.
After all that work, the CCB produced a set of five rules that will go before the legislature in January.
The first rule stipulates what is required for license applications. The second rule spells out the operational regulations for cannabis facilities, such as security, environmental or energy standards. The third rule governs how the medical market will change as the CCB takes over operation of the program from the Department of Public Safety. The fourth rule explains how violations will be enforced and the fifth rule dictates how members of the Cannabis Control Board can be removed or replaced.
Aside from legislating their five rules, the state will have to decide on a fee structure for license applications and determine how the CCB will be financed.
Under one proposal, the CCB would be completely supported through application fees, which will mean they will likely be higher than other states in the region. The CCB proposed a second option where the board would receive a cut of the excise taxes from cannabis, which otherwise go to the state’s general fund. The amount of excise funds the board would receive has yet to be decided.
“I keep reminding everyone who will listen that the legislature needs to pass a fee bill,” said Pepper.
One thing that Pepper and the rest of the CCB had going in their favor was that there were plenty of examples to follow when regulating cannabis. Ten other states legalized adult-use before Vermont, including Maine and Massachusetts in New England.
“Generally speaking, I like to look up to Oregon, Washington, Massachusetts, and Colorado as my main pillars,” said Pepper, adding that his goal would be to keep regulations looser than in Massachusetts, but tighter than Maine, which does not require testing or tracking from its medical caregivers.
“We certainly have learned a lot from Maine, I think a lot of our current legacy market would love us to adopt a Maine-style approach,” said Pepper. “What we’re seeing in places like California and Massachusetts, to a certain extent, is their black or gray market continues, because the regulatory burden is so high. So, trying to find that balance is always tricky.”
On the federal level, while Pepper expects legalization to eventually happen, he is hoping for a safe banking bill sooner than later, to make it possible for more prospective cannabis operators to access financing.
“The lack of traditional access to capital really is the main barrier to making the industry more equitable, but that doesn’t change overnight and it’s not going to change until there’s federal legalization,” said Pepper.