Keeping pace with the ever changing state and federal regulations of being a cannabis employer is complicated. A misstep can be financially devastating.
Vermont: State Number 11 to Legalize Recreational Marijuana
Vermont legalized recreational marijuana this past Wednesday, making it the 11th state to do so. This was a huge step forward for the Cannabis Industry. Not only did Vermont add to the list of states to recognize both medical and adult recreational use, they were the 2nd state to do so via legislation and not through the ballot box. The only other state to do this was Illinois, in 2019. Vermont was granted approval from Gov Phil Scott (R) to regulate and tax cannabis sales without his official signature.
While this is a huge step for the industry, Vermont is not expected to see its first recreational sales until October 2022. The next two years won’t seem too far away when you look at the fact that Vermont legalized possession and use back in 2018. Since then, lawmakers had not authorized any framework for the legal production and sales of cannabis products for recreational use. The new legislation is essentially picking up where the 2018 law left off and fulfilling it to its completion.
The recreational sales in Vermont will build on one of the smallest medical cannabis markets in the country with only 5 vertically integrated companies that are currently operating in the state. The projected sales from an economic impact report, issued in August by Denver-based cannabis law firm Vincente Sederberg, forecast sales to reach roughly $230 million in 2023. According to the same report, recreational sales are expected to increase to just below $250 million in the following year and about $255 million in 2025.
It is important to note that Gov Phil Scott (R) did not give his signature due to 5 concerns:
1. An “inequitable playing field” that he said “will disproportionately benefit Vermont’s existing dispensaries”
2. The production and sell of marijuana vaping products when he is not convinced that vaping does not threaten the health of partaking individuals
3. Adding stricter marketing prohibitions to ensure minors are not drawn to the “adult-only use” products
4. The appointment of a cannabis control board. He would like this to be in place by January 8, 2021
5. A possible uptick in impaired drivers. Gov Scott would like to have additional funding to train for this possibility
Senate Bill 54 represents an opportunity to bring “common-sense” controls to the adult-use marijuana marketplace, which is currently unregulated, unlicensed, and untaxed. In addition to Senate Bill 54, Gov Scott also signed separate legislation which facilitates the automatic review and expungement of low-level marijuana convictions, Senate Bill 234.
Supporters of the legislation argue that this will eliminate the harms of cannabis prohibition such as hundreds of thousands of arrests, racial disparities of those arrests, and billions of dollars circulating the black market and drug cartels.
Opponents of the legislature argue that the legalization will enable the marijuana industry to market the drug irresponsibly which will result in far more people using the drug which would lead to negative health consequences. They compare the industry to the alcohol and tobacco experiences the country has witnessed.
The discussion surrounding the federal legalization of Cannabis products has been ongoing for the past decade, with changes to state legislations occurring quickly and constantly. Running your business while keeping up with politics and staying on pace with the ever changing state and federal regulations of being a cannabis employer is complicated. A misstep can be financially devastating for a growing industry.
Let our team identify issues, minimize risks, and guide you through issues in your cannabis business while keeping you compliant. We offer your cannabis business reduced risk and mitigated liability with powerful risk management services. See all we can do to help you navigate the murky waters of the Cannabis industry by contacting a knowledgeable HR partner today.