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The Cannabis Catch-Up: Weeding Out the Details


Published September 14, 2018 at 6:41 p.m.

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The Governor’s Marijuana Advisory Commission is scheduled to publish a final report in three months, and if a meeting earlier this week is any indication, there’s plenty of work still to do.

Tasked with imagining what a taxed-and-regulated cannabis market should look like if the legislature chooses that route, the commission seemed to still be in the information-gathering stage. Hard decisions or concrete recommendations appeared a ways off. Tax Department officials at the gathering Monday indicated that they needed more answers from the education and prevention and highway safety subcommittees before a suggested tax rate could be set. And setting that tax rate is a delicate balance. Officials don’t want to overtax the drug for fears it would drive consumers to the black market. But under-taxing cannabis would leave less money to fund the new programs needed, officials argue.

In 2016, the Tax Department ran some numbers for S.241, a failed bill that would have legalized cannabis and created a tax-and-regulated system. That proposal included a 25 percent excise tax in lieu of the state’s 6 percent sales tax. Officials estimated the excise rate would generate anywhere from $15 to $20 million in revenue. That money, according to the original bill, would go “first toward implementation, administration, and enforcement of the act and youth access prevention and education.” The same appears true now, two years later.

“This is by no means a windfall to the state, able to fund all sorts of new programs,” Tax Commissioner Kaj Samsom said at Monday’s meeting. “I think certainly it can fund itself as far as the licensing, the cost to administer the new tax type, and certainly more robust programs in health and education and highway safety, et cetera. But as far as beyond the actual costs to have a safe and responsible taxed-and-regulated system, it’s unreasonable to assume there will be a lot of money floating around.”

Questions remain, though. Is that estimate still reliable? Will legalization in Massachusetts and Maine dampen those numbers? Or does it underestimate Vermonters appetite for cannabis? Other states that have legalized recently, including Nevada, wildly underestimated the revenue they’d rake in.

One thing’s for sure. Tax revenue remains a major driving force behind the effort to create a regulated system.

Here are some other cannabis stories we followed this week:

September 11: Bong attack! Two cannabis store employees in Canada successfully fight back against some bear spray-wielding attackers in an insane battle caught on camera. Potential robbers: Don’t mess with the Recreational Cannabis Farmers Market in Ontario. [Thomas MacDonald, MTL Blog]

See the video below:

September 11: Could legalized recreational cannabis kill off the medical marijuana industry? Industry experts are divided at this early stage. [Iris Dorbian, Forbes]

September 11: The lede of this story: “Nearly 20 percent of marijuana products in California have failed tests for potency and purity since the state started requiring the checks on July 1, a failure rate some in the industry say has more to do with unrealistic standards and technical glitches than protecting consumer safety.” [Michael R. Blood, Associated Press]

September 13: This could have big ramifications. Canadian cannabis consumers and those who work in, or invest in, the cannabis industry will be banned from entering the U.S., a Customs and Border Protection agency official said. Border patrol agents are allowed to ask about past drug use or employment. Canada’s legalized marijuana market is schedule to go live October 17. [Luiza Ch. Savage, Politico]

September 13: A U.S. House committee backed a bill that would allow more licenses to be issued to grow marijuana for research. Some voiced concern that the measure includes a provision that would bar those with a “conviction for a felony or drug-related misdemeanor” from participating in the industry. The Medical Cannabis Research Act now heads to the House floor. [Tom Angell, Forbes]

September 14: A Florida Man was arrested for taking an 11-pound brick of weed that washed ashore on a beach in Flagler County. Cops found more than 100 pounds of pot that washed up there in a two-day span. [Jeff Tavss, Local 10 News]

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