Updated at 8:35 p.m.

Vermont lawmakers passed a bill on Wednesday that retains limits on high-potency cannabis, despite efforts to remove them by some activists and officials who worry the caps will undercut the soon-to-open market for legal weed.

The Senate, which last month passed a bill striking the THC limits, approved by voice vote a different, House-backed measure that restored the caps. S.188 now heads to Gov. Phil Scott's desk.

Sen. Dick Sears (D-Bennington), who opposes potency limits, said that he supported S.188 because House lawmakers were unwilling to budge, and the bill contained other necessary adjustments to the state's cannabis law.



"Having caps will hurt us, but that's a fight for another day," he said.

Physician groups pushed for the caps, contending that high-potency pot is linked to emergency room visits and substance use disorder.

Potency limits on legal products, however, will put licensed cannabis producers at a disadvantage against black market sellers and legal retailers in neighboring states, where caps don't exist.

Act 164, the 2020 law that established legal recreational sales, included a ban on sales of concentrated cannabis products such as edibles, hashish and dabs that have THC levels over 60 percent. Prepackaged vape pens are not subject to the potency limit.
Industry advocates thought they had a chance to remove the caps when the state's new regulatory agency, the Cannabis Control Board, came out in opposition to them last fall. Board chair James Pepper recently told lawmakers that potency limits would be a "gift" to the black market.

In late April, the Vermont Department of Health's senior policy and legal advisor, David Englander, wrote to House lawmakers that the department supported lifting the caps. The following day, Englander sent a follow-up memo stating that "upon further consideration," the department "maintains that a foundational component of the original legislation remain in place," VTDigger.org reported.

Following that switch, Rep. John Gannon (D-Wilmington), restored the caps to H.548, a bill that also cleaned up and clarified other aspects of the original law. The Senate sent the bill to a conference committee, and, in response, the House inserted the H.548 language, including the caps, into a separate cannabis bill, S.188.


The S.188 language approved by both chambers this week does alter Act 164. It allows wholesalers to sell high-potency concentrates that manufacturers could then dilute to make consumer-grade products. Sears and Gannon said they do not expect lawmakers will take any further action on cannabis before they adjourn this week.

S.188 also orders the Cannabis Control Board to prepare a report for lawmakers in December that contains "a summary of the regulated market share" for concentrates above 60 percent THC as well as "the status of the illicit market for those products in other states with a regulated adult-use cannabis market."
Sears expressed concern that the caps will affect retailers in his home district of Bennington County, who may be more likely to compete against licensed retailers in nearby Massachusetts and New York, which is soon to open its market — without THC caps. Sears said he hopes the Cannabis Control Board report will prompt lawmakers to revisit the issue next year.

"We may have more facts on how much damage it does to our market," he said.

Geoffrey Pizzutillo, cofounder and executive director of the Vermont Growers Association, a cannabis trade group, said the bill's passage brings "drastic uncertainty" to the market that fully opens on October 1. No other state with an established recreational market has imposed potency caps, though Connecticut's forthcoming market will have restrictions similar to Vermont's.

The potency-cap provision amounts to an "experiment," Pizzutillo said, that could eat into revenues from a product segment projected to comprise as much as half of all cannabis sales.

"THC caps are not just unreasonable," he said. "They're not practical, and they're not logical."