Our Opinion: Time is right to legalize, regulate, tax cannabis sales in Vermont
On Wednesday, the Vermont House of Representatives voted in favor (90-54) of a bill that would legalize, regulate, and tax cannabis sales for adults 21 and older. S.54 was scheduled for a final House vote Thursday and if, as expected, it passes there, it will return to the Senate, which has already approved a different version of the bill in a 23-5 vote.
The House and Senate will have to agree on a final version of the bill before it can proceed to Gov. Phil Scott's desk. Scott has said he's open to considering the legislation as long as it contains several key provisions, including carving out 30 percent of future tax revenues for prevention efforts and setting aside money for after-school programs. Scott also doesn't believe police should need court warrants to conduct saliva testing for suspected intoxicated drivers; the current bill would require warrants.
Vermont legalized possession and cultivation of cannabis for adults in 2018. If the new bill is enacted, Vermont would join the 10 states that have laws regulating and taxing cannabis for adult use, including nearby Massachusetts, which became the first state on the East Coast with regulated recreational marijuana stores in November 2018, some as nearby as Greenfield, Turners Falls and Williamstown.
An overwhelming 76 percent of Vermont residents support allowing adults 21 and over to purchase cannabis from regulated, tax-paying small businesses, according to a recent poll conducted by Public Policy Polling.
Supporters of S.54 argue that Vermont's current approach — allowing people to grow and possess limited amounts of marijuana without giving them the ability to purchase it — has only strengthened the black market, while preventing the state from taking in much-needed tax revenues.
Some lawmakers, including Democrats, understandably harbor concerns over health impacts and the potential for more youth usage.
Critics of S.54 have two main objections: Small growers say the proposal presents too many barriers to the legal market; others say the legislation does not rectify decades of marijuana criminalization that has disproportionately impacted people of color.
Lawmakers say they have included adequate protections for small businesses, and a separate bill addresses the criminalization issue.
The House bill places a 14 percent excise tax and a 6 percent sales tax on cannabis sales. According to an estimate from the Joint Fiscal Office, the state could expect to see about $13 million in tax revenue about four years after dispensaries start selling to consumers in 2022. Of that amount, $8.9 million would be sent to the general fund, and $3.8 million would go to the education fund.
Sen. Dick Sears, D-Bennington, said it's important to keep the tax rate low, to keep the price of the drug down and discourage people from relying on the black market.
In Massachusetts, the combined tax rate on the substance can be as high as 20 percent. During the first full year of recreational marijuana business in Massachusetts, dispensaries made more than $420 million in sales, resulting in approximately $71.4 million in taxes during the calendar year.
Several Vermont towns, including Dover in Windham County, have taken preemptive action to ban dispensaries, but it's unclear whether those bans will hold up under future legislation. We have to believe that certain small farmers and business entrepreneurs in southern Vermont would welcome the opportunity to jump into a potentially lucrative market which could complement business and tourism efforts in towns such as Brattleboro, Bellows Falls, Wilmington and Bennington.
It makes little sense that an adult can possess and grow marijuana in Vermont but cannot purchase or sell it legally, under controlled and limited circumstances, in this state. It's time to rectify that situation — to the benefit of small businesses, consumers and the state's tax coffers.
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