Good afternoon. You are with the Vermont House Government Operations Committee. We've had sort of a stop and start kind of day already today with floor debate and caucuses that ran a little long. So most of us probably haven't had much of a lunch break, but I welcome you to turn your camera off and grab a snack if you need to. We've got a number of bills that we need to try to get through this afternoon. The first one that I wanted us to just be able to familiarize ourselves with is S25. And this is an act relating to miscellaneous changes to cannabis regulation. And it's sort of a follow-on to the bill that passed out of this committee in the last biennium, making certain changes that are necessary to get the cannabis market up and running. And then a few other different procedures or different provisions in the bill that aren't as critical, time sensitive, but we will take a look at them as well. So Michelle Childs, thank you for being with us this afternoon. I think for the sake of folks who were not in the committee or in the legislature in the last biennium, it would be helpful if you could just remind us sort of where we are on the implementation timeline that we set in motion with the passage of the bill last time around. And then we can jump through sort of a general review of the provisions in this bill. And we all have a secondary device that we can look up documents on. So let me know. So don't share, don't share, put the document. No, we'll all look at it on our other screen so that we can see each other. I'm gonna have to put it up on mine. So if folks have questions and I don't see you because I've only got a little snippet on the side, just yell at me, no worries. I will try to politely interrupt you. And so, and actually I did do a review for the committee in January. I was trying to remember because I think the chair and I were talking about how last year blended into this year. We forget which year we did take. So there is a... It felt like seven years ago. Yeah, right. Well, I think I've been working almost on this almost the same exact bill for seven years. So I'm gonna go through and talk to you a little bit about the timeline. I didn't send it to Andrea because it should be under, although I can resend it, but it should be on your webpage because I went through that timeline back in January. So I will just talk a little bit about that because it obviously does have quite a bit of bearing on what's in S25. So I recall that... So Act 164 passed at the very end of last session. So at the end of September went into effect without the governor's signature in October. So it took effect October 7th. And you can imagine is... And I think we talked about it some in January is that because of the delay in implementation, things that had originally been conceptualized with the act taking effect perhaps in June of 2020, which reports back to the legislature the following year. So right now that was all really crunched. And we tried to work with the timeline and come up with something that was workable. So things that were previously to be reported to you in January got bumped to April 1st. But I think most of y'all know the cannabis control board has... It's been slow in getting up and getting running. So originally there... So if there was a nominating committee that's the names and then sends the names to the governor. Governor didn't start advertising until... Like I think the positions were open until the very end of last year. So the nominating committee wasn't really able to get going until much later. And so the board members were supposed to have started their terms on January 19th of this year. And I'm not sure exactly when, but maybe just earlier this month that the board was selected by the governor and it seems like they're doing a great job and hitting the ground running. But they are behind through no fault of the three board members there. So they were supposed to start their terms on January 19th and hopefully have had an executive director and an administrative assistant on board by the end of February. They just put up the advertisement for the executive director yesterday and they're gonna have that open for a couple of weeks and then hopefully move quickly towards hiring an ED because there's a lot of work that the board has to get done quite quickly. So there are... The first thing that the board was supposed to do was to report back to the general assembly on April 1st of this year on a few different things. And the first one being a strategic plan for the second and third year rollout of the program, that would include positions and budget and things like that. There's also supposed to be a proposal for license fees because while you created the structure in Act 164, you didn't establish the fee amounts in the bill and that's because there's a very complex way of determining the fees in terms of determining, first you have to figure out how much cannabis should be grown in Vermont in order to adequately meet the demands but not oversupply and come up with some other issues. And so they have to first do that, calculate that then they have to divide that up into different license tiers. They have to figure out how many licenses are going to be available. And then they have to kind of work backwards from there and figuring out then how did they set the amounts for the fees to cover the cost of the administration of the program because the fees are solely what supports the work of the cannabis control board. All the tax money goes elsewhere. So the tax money, there is a provision in Act 164 that allows some of the tax money to go in and fill gaps in the budget of the cannabis control board if they're not able to support the workings of the board with the fees, but the goal is obviously to have the fees covering the work of the board at least how it was originally envisioned in Act 164. So that's a big issue that has to be essentially addressed this year. So other issues you might have more of a choice on does it fit for you and your policy decisions? Do you wanna spend a little more time thinking about it? But the fee issue is something that must be addressed this year because as you know, the legislature establishes fees that's not for an administrative, you're not delegating the authority to an administrative executive branch agency for setting those fees. And so they've gotta come back and report to you and then the legislature has to act and that's addressed in S25. So we'll get there in a minute. They were also to recommend exemptions and specific criteria requirements under applicable state or local environmental or land use laws for cannabis establishments, recommended energy efficiency requirements for a standard operation of establishments. They were supposed to be a report back on April 1st about a proposal for advertising. So for those of you, I think most of you were, at least here in the body, except for a couple, I think maybe a couple of y'all, but what had happened was you did the house government operations, voted out the S54 last year at a committee and had an extensive proposal for how to address advertising by cannabis establishments. There was an amendment on the floor of the house that stripped that out and established an advertising ban. And that was what passed the house. When it went to conference, the Senate had some real concerns around constitutionality of a straight up advertising ban and the compromise that wound up passing was that the Cannabis Control Board would be working with the Attorney General's office on coming back to you with a proposal this April 1st for how to move forward with an advertising structure. And again, that is something that is in S25 that we'll see in a minute. And that is what I would say is the second thing that is a must pass issue is the fees and the advertising because once you adjourn this year, if you adjourn and you don't come back in the fall, no offense, but you won't have an opportunity to address those things before they start accepting applications next spring for the cannabis establishments. And so you wanna make sure, obviously you've gotta have fees established and then you should have something on advertising. Right now it's silent on advertising. And I don't think that that's really, nobody's been advocating for that position. And so those are two things that really must be done this year. There's also a couple other little ones that I don't think you really necessarily need to worry about right now. Let's see, there's another thing and I don't know how if you care so much about this one, but DPS is to make recommendations. And I don't know if they did this actually now because I'm looking at it was March 1st, 2021 and they could have done it without the Cannabis Control Board. So I'll have to hunt that down and see if they issued a report to the legislature on how to achieve geographic equity in the utilization of DREs and whether to expand the availability of the DRE program beyond law enforcement officers. So I'll follow up on that. I totally have forgotten about that one. And then May 1st of this year, according to last year's act, the Cannabis Control Board was supposed to have appointed the members or to the, oh, it's actually not the Cannabis Control Board who appoints it's other entities that appoint, but people were supposed to appoint the members to the advisory committee for the Cannabis Control Board. So there is an advisory committee and there's appointments by the Senate Committee on Committees, the Speaker, the AG, various folks. And that is to bring in various technical expertise of different people to come in and support the work of the board. That deadline is May 1st. I know that the chairs of the board is working on that, but I think just with the end of the session and the late start of the board, the appointing authorities haven't really put this really kind of right in their sights right now. So it's probably unlikely that that's gonna happen by May 1st. And then June 1st of this year is when the board was tasked with starting formal rulemaking. So I don't know that I necessarily need to go out further, just for purposes of talking about S25, just a reminder that basically what the board is gonna be working on primarily is rulemaking for both the adult use market and the medical cannabis program. Something that I do wanna mention is that according to Act 164, the medical cannabis program is supposed to shift from the Department of Public Safety to the board on March 1st of next year. And at that time, there's new statutes that take effect and the old statutes are repealed. But that is actually, that timeline is moved up in S25. So anybody have any questions about the timeline? Rep Hooper has a question. Maybe not timeline, Michelle, but was the issue, the constitutional issue on advertising inside and outside and we sort of went around committee-wise on how extensive the advertising could be and where call it the Marsha Gardner Memorial. Well, what passed the house was just a ban, just no advertising at all. So it wasn't really nuanced in terms of what type of advertising. It was just a straight up ban. So the concern, which we had talked, some in your committee last session, but not a lot because there didn't seem to be a strong urge in the committee at that time to go for a ban. And we had talked about it much more in the Senate, was that even though cannabis is federally illegal, it is legal at the state level. And so there's a question, an outstanding question, which really has not been settled by the courts about whether commercial speech concerning cannabis is afforded any First Amendment protections. So generally, if this was a product that was straight up legal at the federal level and state level, you couldn't ban advertising. So commercial speech doesn't have quite the same protections, but it does have a lot of protections. And so the courts have been split about whether cannabis advertising in a state where it is legal at the state level, but continues to be illegal at the federal level, whether like how much you can actually restrict advertising there. And to date, no state has done a straight up ban. And the attorney general's office weighed in last year that they were very uncomfortable about being able to defend a straight up ban. And that's where you came up with the compromise language in there. And so what you have in S25 that I'll go over is actually goes back to House government operations, original language that your committee voted out, but that was stripped on the floor. And the attorney general's office testified in the Senate that they recommend that proposal and they think it is defensible and they recommend against a ban. Thank you. Rep. Hope Stee. Thank you. We do restrict other advertisement though. I mean, cigarettes aren't advertised, alcohol is not in certain places. So there is precedent for restriction. Yes. Yeah. Mm-hmm. Yes. Very different between restriction and a ban. And the proposal that you do have, and I'll go through and show you is quite restrictive. There's a lot of limitations on the advertising that would be allowed under the structure. And so your constitutional rights are not absolute and you can almost always make regulations and then you go through an analysis and you determined what type of speech is it, what type of burden is on the state to show that the regulations that they've made are necessary to accomplish the state goals and how much does it infringe on someone's rights. And then you go through a balancing test there. And so I think what the AG's office has said is they feel as though house government operations did a good job last year coming up with an approach that allows advertising accomplishes some of the goals of kind of what we're stated of concerns about why there was a ban adopted but doesn't run afoul the constitution. So. Ref Anthony. Yeah. Yes, thank you very much. Welcome, Michelle. Thank you. I had the privilege of sitting through July, August, September cannabis discussions with the hassle between your structure as a fee at the wholesale level retail, blah, blah. There was a fairly large amount of quantitative analysis done by a JFO personnel that passed through ways and means. I would have thought that would be the sort of starting point if government ops, as you've suggested is going this group in particular going to review that material as a matter of first impression because it didn't deal with fees the last time in government ops. And I guess I would say we can argue about constitutionality till the cows come home but seems to me really to be sure we have something to move forward with. We really have to grab a hold of the fee issue. And as a starting point, it sounds like last sessions gov ops did a good job and I don't know why we wouldn't just return to that as was suggested by Gen A.G. Donovan. But really, when you see the volume of material I think you ought to early on take a bite on the fee issue because that's really a very slippery and moving target. Right. I think you're right. They're what they do a lot of information and I'm guessing that the board is really gonna be looking to them and kind of trying to work with them and saying, what kind of analysis have you done? They're gonna be looking and talking to their counterparts and other states on how they estimated the market, things like that. The way we came up with a solution for this right now is and I'll take you through the language is for actually and because the board can't report back to the legislature because you won't be in session is to actually have the board report back to the joint fiscal committee. And for there to be a process for how joint fiscal can then go through and either approve or disapprove the recommended fees and then they can go into effect that way. So there is representation of the legislative body weighing in and saying, yes, that makes sense. This fits with what we wanted you to do. We think those fees are reasonable or no, those fees are so high, we're never gonna get folks from the illegal market to move into the regulated market. If the fees are that high, it looks like maybe we can't sustain it based on fees and maybe we need to redirect them tax money. So right now the solution is to have joint fiscal committee do that kind of check, check off instead of the body as a whole since you won't be there. If I may follow up, one of the things that I found very novel, but also wise, since as I recall, we appropriated a huge amount of money to get this off the ground. And then the idea was the fee revenues and some of the tax revenues would essentially pay the advanced fund back over time. And I was, I don't want to say this for the sake of my colleagues now, it was wise because of course, you could always return money that was over collected. It's not so easy to readjust the fees if you found out that you were under collecting. And so I guess the starting point is make sure you have enough because you've got a big debt to pay back anyway because of the money that was advanced from a special fund that was intended to be paid back, frankly over the first three, four, five years of business. Well, you will get a little bit of savings in the fact that the board is starting so late because the money was appropriate for part of the fiscal year and then it didn't get started for, there's like a three month delay. So you'll have a little bit of savings in there and the date for the licenses to start being issued next spring has not changed. And I haven't heard any requests yet from the board to change that. So I think they're still very hopeful that they can still meet that target date of issuing licenses next spring. So is it okay to start going and walking through us 25? Yes, please. Okay. Okay, so we're this first section. Those of you who were on the committee last year will be very familiar with this section. This is the one on, with regard to the involvement of municipalities on whether or not to allow retail sales in the, within the municipality. And the way that it works currently under Act 164 is that if a town, so is that retail sales would be prohibited everywhere unless a town places the issue on a ballot for voters, not for select board or such city council, but for the voters to vote up or down on whether or not they want to allow a cannabis retailer or an integrated licensee. Just a reminder that the integrated licensees are just, there's only a maximum of five that would be allowed. And that would be to allow the existing medical dispensaries to apply for that. And they could remain vertically integrated under that integrated. So, and so meaning that they could sell directly to the public under that integrated. So there's a small, just technical tweak you'll see there in the first line of subdivision A1 is that right now it's as prior to a cannabis retailer or an integrated licensee operating. And there seemed to be when towns were discussing it whether or not right now for an integrated licensee, if they were, let's say they had their cultivation facility in one location, but their retail facility in another location, like the way that like Champlain Valley Dispensary has a big operation in Milton where they have their headquarters and their human services and they have their kitchen and they cultivate, but they don't do, they don't seek patients at that facility. They see patients at their South Burlington retail facility and their Burlington one. So this is just clarifying that we're just talking about the retail portion of it. So it doesn't mean that like now so that they couldn't have their cultivation facility somewhere else. Then the next change is this is kind of based on what the legislature did back in the 60s with alcohol, which it used to be that towns would vote, I believe annually on whether or not to allow alcohol in the town. And then there was something in the late 60s that said, well, as of all towns have to vote by a certain date and then whatever your vote is, that's gonna be your vote. Are you wet or are you dry? Unless you go back and hold some new vote. And so this is the same kind of concept, which is that so talking about in not next year but the following year, any municipality that has not previously voted on the question of permitting the operation of retail sales shall be deemed to permit the operation of both retailers and integrated licensees. And so there was interest in the Senate side of giving applicants for these licenses more certainty around where they would be able to operate. So because it can take quite a bit of time to be able to get all the money and the information together to apply for a license to go through the licensing process to gear up to get funding, things like that. And they wanted to put something in there so that people who are applying for licenses would have kind of know by within a couple of years where they could operate. Replicator has a question. Thank you, Madam Chair. Couple of things. One, along your comments there is, I recognize everybody needs certainty but aren't we asking municipalities to make a decision based on what they're going to do without knowing the rules of the road jet as far as the cannabis boards and people getting set up. And in essence, what we're doing here is we've gone back from a community has to opt in to now everybody's going to be forced to opt out, correct? Yes. So in terms of the reasonings and stuff, I would say speak to some of your Senate colleagues. Senator Benning was the one on the Senate side that was making this proposal in terms of certainty and that thing. This language came about in Senate Gov Ops and they did get input from the league. And I think originally they had maybe had it as 2022 and the league said another year that at least allows the program to be running for a year. The rules will have been issued by next spring. And so towns will be able to see what the rules are and have a better picture of how everything operates and then have the opportunity to then put it on the ballot during town meeting week in 2023. Okay, thank you. All right. Rep Higley. Thank you, Michelle. So again on that section there, is there any provisions around a town after that 2023 date to say no? Yes, there's existing language that allows them to put it back on the ballot at a later date. So if they do it and they say, you know what, it's really not for us. It's been more of a headache than we thought it would and we don't wanna do it anymore. Then they can still put it back on the ballot. They can reverse their decision. But if there's already a licensed establishment that is operating in that town that got crossed all their T's and dotted all the I's and they're in compliance, then they will be as long as they continue to be in compliance and get any appropriate local or state licenses, you can't then just kick them, you can't kick them out. Thank you. All right, let's go back to the language. Sure. So next section is dealing with section two is dealing with the cannabis control board advisory committee. So as I'd mentioned, there's this advisory committee with folks from various areas of expertise to kind of support the work of the board. And right now the way that the cannabis control board is established is it's an independent executive agency. And so that's why there's like the nominating committee and then the governor selects folks, but they operate independently. And so, and the provision in the current law states that a member of the cannabis control board, so one of those three members, they can only be removed for cause by the other two members of the board. One change that was added in the Senate is they added, it could be by either that method or a two-thirds vote of the advisory committee could also remove a member for cause. There's also a provision there that says that the board shall adopt rules pursuant to the APA to define the basis and process for removal. I would recommend, I think I view that as a technical that should have been there. I should have thought to have put it in originally last year. This removal for cause by the other members is fashioned after what you have with the Green Mountain Care Board. And while I could not find any rules that they've adopted with regard to the basis and process for removal, there's supposed to have done that. And I think it's a good idea for this board to do it as well, because then it's very clear to everybody. And I think it instills a little more confidence. So I view that as more of a technical, whereas the issue of whether or not you want to allow this advisory committee who are not state employees or, you know, and it could be members who are changing all the time, things like that, whether or not you want them to be able to remove a board member is I think a bigger policy choice for you. But the other one I would say having them adopt rules on the basis and the criteria for removal, I would suggest you should do as a technical. The advisory committee, Anthony, has a question. Sure. Michelle doesn't, liquor and lottery, they formally adopted the administered procedures for purposes of removal. I'm guessing, but I thought they had- That may, I don't work on the liquor and the lot. Okay. Yeah, that may be a good model for them to look at. I was going to say that's what chairwoman Ansel looked at when we were sort of hashing this out about separate, but not, it was still a state function, but it was a separate independent board. And the issue of cause came up and removal and so on. And I thought that she had also had someone come in and look at what a liquor and lottery does just as an example of something that seems to have succeeded for 40, 50 years. Right. Well, there's language in Act 164 and I know the chair of the board is taking that seriously around collaborating with other existing agencies and departments and for them to give the board their assistance and getting going because there's no sense reinventing the wheel when there are examples of that stuff out there. So the next issue with the advisory committee is there's language in subdivision H1 that the board shall collaborate with the advisory committee on recommendations to the general assembly. It also adds a 13th member to the advisory committee and that is a member appointed by the Vermont Cannabis Trade Association and that is the association of the medical dispensaries. So adding another member. And then after this has... So the initial appointments, as I mentioned earlier with regard to the timeline required the appointments to the advisory committee to be made by May 1st. This proposal moves that up to April 1st which we've already passed. And it also has the secretary of agriculture, food and markets who is a member of the advisory committee convene the first meeting on or before April 15th. That was last week or the week before. Next, we're moving on to advertising and there's several sections under the advertising portion and a lot of them are just cross-references and technical. So I'll move quickly through those. So section three has to do with advertising review fees. So one of the things components of the House GovOps proposal on advertising was that all advertisements prior to publication needed to be reviewed by the board to make sure that they were in accordance with the statute and the rules around advertising and that there would be an advertising review fee. And that's one of the things that you're gonna get recommendations for and adopt. So that is section three. Section four, this is an amendment to the session law in Act 164 around all that reporting language that I spoke about. So that tweaks that and it takes out a bunch around the state fees and I'm just gonna skip over that so I can move to actually the new language that comes in which is in section four A on page seven. And so you'll see in subsection A. So right now under current law it's that the board was supposed to have made these recommendations to you April 1st. So now it's that honor before September 1st the cannabis control board shall provide draft recommendations to the Joint Fiscal Committee for its approval on the following. And then it's a long list of all the different types of fees that are supposed to be developed. They're also supposed to report on whether the money's expected to be generated by the state fees not the ones that are collected on behalf of the local municipalities but the state fees are sufficient to support the statutory duties of the board or whether any portion of the tax that's been established should be allocated to the fund to support the board's duties. They're also supposed to report on the local fees to be charged and collected and accompanied by information justifying the recommended rate as required by law and recommend local fees that are designed to help defray the costs incurred by municipalities in which cannabis establishments are located. So that was something a proposal that came up was developed by Ways and Means that the board would collect a fee from applicants that would be then collected by the board but to be distributed back to municipalities that are hosting any kind of cannabis establishment. And so it's for the board to come up kind of with the formula for how that should be distributed should towns that have a retailer receive a greater proportion of the fees than someone who has a cultivator or things like that. And so subsection B there is that upon receiving the proposal joint fiscal committee shall review the recommendations and provide feedback to the board for any suggested changes. And then the board should revise the proposal if necessary to incorporate the committee's recommendations and present a revised draft for approval to the committee. And then notwithstanding something that's in title 32 now the fees take effect upon approval of the committee. So basically there's to be a dialogue between the board and the joint fiscal committee on trying to get the fees right. And then once they're approved by the joint fiscal committee then they would take effect. So that is the alternative to what you have now which is having them report back to the full legislature. So then beginning on July 1st of next year and then every three years after all cannabis regulation fees are to be included in the annual consolidated executive branch fee report that comes through. So basically this kind of method of having the joint fiscal committee establish the fees as opposed to the general assembly as a whole would just be for this one year to get things going and then it's just gonna be part of the fee bill. And there is precedence for this just in case anybody's wondering. So we feel good on constitutional grounds. Next section, section five definition section and I don't know how much you really want me to go into any of this or I guess because most of you have worked on this.  Just let's let people go ahead and review that the definitions section on their own and let's see if we can keep going and go through the major components of this. Sure. So this is just definition section then you'll see I just wanted to point out definitions for advertise and advertisement and the advertisement definition is pretty comprehensive and tells you what it is and what it isn't. So then moving on through the rest it's just a renumbering. So you get really to the heart of the advertising language in section six and subsection B talks about what types of advertisements it cannot contain so they can't be deceptive, false, misleading, promote overconsumption. Again, you can kind of look at the list there. So those are the things that are prohibited from being in an advertisement. Subsection C is that cannabis establishments are not permitted to advertise their products via any medium unless the licensee can show that no more than 15% of the audience is reasonably expected to be under 21 years of age. So this means there's not gonna be, I mean, there's no billboards in Vermont anyway but there's no big outdoor sign saying, stop here for all your cannabis needs. We've got the best prices in town, things like that because you can't possibly show that not more than 15% of people who might see that are gonna be 21 or over. So there's gonna be some real. So this is what I would consider the most narrowing or limiting provision within here in terms of kind of widespread advertisement. So it may be that they say, well, we can advertise in a trade magazine because kids aren't reading cannabis trade magazines or we can advertise sometimes if you see in a bar you might see sometimes they have little advertisements up for cab companies or things like that. Maybe we could do that because if you get carted at the door you've got to be 21 years old to go in there. So arguably there shouldn't be anyone under 21 viewing that advertisement. So those are things we'll have to work with with the board. There's also requirements of section D that all advertisements contain health warnings that are adopted by rule, by the board consultation with the Department of Health. All advertisements, as I mentioned, have to be submitted for prior review and the board can require specific disclosure be made in an advertisement. If they think it might be false or misleading without the disclosure or misunderstood and they can require changes that are necessary to protect the health, safety and welfare and consistent with dispensing information for the product under review. So section seven, this is just kind of belts and suspenders around the things that were already mentioned up above with regard to advertising to under 21. It's also added in this youth section. So that's what 866 is. So just clarifying that advertising can't depict anyone who's under 21. It can't be designed to have the effect of being particularly appealing to folks who are under 21, that sort of thing. Section eight is just adding the requirements that the board further adopt rules to kind of flesh out a little more detail in what you've set up through statute with regard to advertising and marketing. Section nine is adopting these advertising structure for the medical program as well for dispensaries as well as cannabis establishments that are serving the public for a retail market. So it's just the same exact language, but this is in the chapter that regulates dispensaries. Next is cultivation in section 10. And so this is a mending session law in Act 164 on the implementation of the cannabis establishments. And so one of the things is that the integrated licensees are along with small cultivators and testing labs, they're the first ones who can apply for licenses. There's a rolling license application process. And that is because when talking with other states, Vermont found that they recommended that you kind of stagger the application so that you didn't get completely overwhelmed and then just kind of crumble under the burden of that but that you start out with certain folks, all the states that have gone from having a medical to an adult use cannabis market have started with allowing the existing medical dispensaries to go first because they're already kind of geared up and they have the process and they have the ability to get to market faster so you can have some of that tax revenue coming in and some of the fees coming in to support the work of the board. And so what happens is that on April 1st of next year, the board starts accepting applications for the integrated licensees. You don't have, and also for small cultivators, you don't have retailers being licensed until the fall. And so the only licensees who would be selling prior to October or so of next year would be integrated licensees. And so what they've added in S25 is that after they start issuing integrated licensees, that between August 1st of next year and October 1st, 25% of the cannabis flowers sold by an integrated licensee shall be obtained from a licensed small cultivator if available. And so, and that is to encourage because you'll have small cultivators that will be looking for some place once they've got a product which should be right around that August to October time encouraging dispensaries to be purchasing from those small cultivators not to just be selling the flower that they themselves are growing. And so that was intended to support the work of the small cultivators. So next, moving on to social equity. The first one is on section 11 with regard to fees. And States said that when reporting to the General Assembly regarding recommended fees that the Cannabis Control Board is to propose a plan for reducing or eliminating license fees for individuals from communities that have historically been disproportionately impacted by cannabis prohibition or individuals directly and personally impacted by cannabis prohibition. And you're gonna ask me what those things mean and I'm just gonna say that is something for the board to figure out. So, section 12, this is establishing a new cannabis social equity program or programs. You'll see the definition section in there when we're talking about the agency we're talking about ACCD. And then when we're talking about the board we're talking about the board. The first thing it does is so it establishes a Cannabis Business Development Fund. The fund is to be comprised of two things. The first one is 3% of gross sales made by integrated licensees prior to October 15th, 2022 with a maximum contribution of $50,000 per integrated licensee. Because the integrated licensees are going first because they can get out to market faster anything they sell, so you take their gross sales before the other retailers come on and then you take 3% of those gross sales and then they have to contribute that amount into this Cannabis Social Development Fund with a cap of $50,000 each. But $50,000 each, so if there's five then you have a maximum of $250,000 going from the dispensaries into the Social Equity Fund. The second piece of that is just money is allocated to the fund by the General Assembly and you'll see here we have a $500,000 appropriation into the fund. So arguably when, so that next year there should be $750,000 in there for people who qualify as social equity applicants for grants and loans through this program. So you see the purpose of the fund is subsection C to provide low interest rate loans and grants to social equity applicants to pay for ordinary and necessary expenses to start and operate a licensed cannabis establishment and to pay for outreach that may be provided or targeted to attract and support social equity applicants and then any necessary costs incurred and administering the fund. Amounts from loans that are repaid shall provide additional funding through the fund so it's revolving loan fund. Section 988 are social equity loans and grants. So ACCD is directed to establish a program for using funds from the Cannabis Business Development Fund for the purpose of providing that financial assistance and so and outreach to social equity applicants. You see section 13, the Cannabis Control Board Advisory Committee in consultation with the board is to develop the criteria for social equity applicants for the purpose of obtaining those loans and grants and the board is to provide the criteria to you no later than October 15th of this year. The idea being that you would then be able to fold that into legislation and you could kind of build out these statutes a little more next year, but the issue of who is a social equity applicant who should a social equity applicant be is a complex one and with people who have a lot of different ideas about that and the factors that should go into determining that and so they wanted to have someone really taking a good look at that and then making some recommendations to you on that. So section 14 is, as I just mentioned, the $500,000 appropriation. So it is, I'm trying to think. And I think the reason why that I was just looking to say why it kind of feels like it says the same thing. No, so it's transferring from the general fund to the Cannabis Business Development Fund, the $500,000 and then appropriating it. So that's the money there. Next up is transferring the medical cannabis program. As I mentioned right now, it lives in the Department of Public Safety and it's supposed to move over on March 1st of next year. This moves that up to July 1st of this year. So you'll see that on July 1st of this year, the following shall transfer from DPS to the board. One is the authority to administer the registry and the regulation of dispensaries. Two is the cannabis registration fee fund. Right now that medical program is completely sustained by fees that are paid by dispensaries and patients. And so that fund would move over to the board as well. It tends to run a little bit of a surplus. I don't know how much money is in there right now, but and then the third one is it would also move the position. So there's I believe three FTEs in the program right now. So those positions would move over to the board as well. The registry would continue to be and the dispensaries would continue to be regulated by current statute. Those statutes are gonna be repealed March 1st. You can't repeal them now because you don't have the new structure to come up because the board has to adopt the new rules because the medical program is fairly restrictive. You have, there's a lot of hoops to jump through in order to be able to participate in the program. Once you have a fairly open adult use market, it doesn't make any sense to make it harder for medical patients to obtain cannabis than if they just walk into a retail store. And so you have to repeal all that old stuff and then through new stuff drops down, but you have to give the board the time to adopt the new rules. And so basically the medical program would move over on July 1st, but would still continue to operate under the old statutes and the old rules, but to be administered by the board. And then section 16 repeals those provisions in Act 164 that had it moving in March. There's a provision in here on highway safety and this is with regard to A-Ride. And so not later than July 1st of this year, the council, the Vermont Criminal Justice Training Council or Justice Council is to report to the justice oversight regarding funding for this requirement in Act 164 that says that all law enforcement officers have to receive a minimum of 16 hours of A-Ride training. So that's just the level under, so it's not for drug recognition experts, that level of expertise, but this advanced roadside impaired driving training and so they would have to report on the funding mechanism there. Next is substance misuse prevention funding. Representative Gannon has a question. Oh, I'm sorry. Thanks. Michele, why didn't Senate add section 17? Because- Why? Yeah, because we dealt with this in appropriations and there's little to no cost to doing this. So I'm just- Yeah, my sense, and I'd have to go back and look at the governor's letter. Did the governor mention something about this in his letter? Do you recall, John? I have his letter right here. Let me see. I think he might have. I feel like that was something that maybe they were trying, they were trying to address Governor Scott's, he raised in his letter when he did not sign the bill. And I thought maybe there was something on the A-Ride in there. And it may just be something that's not being communicated between the bodies in the administration or something around that. Because my understanding, I recall, wasn't, isn't it covered by federal funding? Yes, no, and you're right, it is in his letter, it's his last bullet. Yes. So, yeah. And I think I mentioned to them the federal funding issue and they're like, well, the governor says it needs to be addressed and we're trying to accommodate, so. Yeah, it's covered by grants. So that's why I was just wondering why. It may be completely unnecessary. The administration may not be aware of that. Okay, thank you. So the next bit on substance misuse prevention funding. So you recall that out of the excise tax, so remember you have an excise tax and a sales tax, the sales tax goes directly towards after school and summer programming for kids. The excise tax, 70% goes to the general fund, but 30% goes specifically to fund substance misuse prevention programming. And it has a $10 million per fiscal year cap on that. And what we did here was that language was in session law last year, section 18 here codifies it, entitled 32 and also makes it clear that any appropriation bounds carried forward shall be in addition to revenues allocated for substance misuse prevention programming that are in there so that it's, so that just trying to put some guardrails on there. So it's not really too different from what you had before. And then section 19 repeals that session law same language that was in Act 164. And oh, I'm only two minutes past over. Thank you so much, Michelle. So committee members, any general questions about the various provisions in S25? I am intending for us to have this preview of the bill today and then you all can spend some time with the bill language over the course of this week while we're doing some other work in committee. And then we will take this bill up in earnest next week. So I wanted you to have a sense of the overview of the various components so that when you, when you give me some feedback about what you'd like more information on, then I will know how to build our agenda for next week. Representative Anthony. Thank you, Madam Chair. Michelle, you added a sort of narrative comment back when you flagged a particular policy issue and it had to do with the advisory board participating in removal, apart from the board itself kicking out somebody, you said there was a two sides of the argument of whether the advisory board should participate in that. And then you said your narrative comment was something like, but I guess the Senator one of the skeptics of having the advisory board have that authority, you felt was triggered by the fact that there might be a lot of turnover in the advisory board. And I'll go read the section, but it seemed to me odd why there would be turnover or why you would feel like that was a likely scenario. And that was a reason to be cautious about those folks having that authority because they come and go, I think it's the phrase you used. Right, I think that was just one of the issues that raised that might bring up concerns is because if you have your, it's appointing. So if you think about the way that when you do summer studies or things like that and appoint someone in the Senate Committee on Committees and they appoint the person from a nonprofit organization and is it sometimes you see some movement right in that and you may have one person who is doing it for a little while and they say, well, that person's got too much going on and now it's gonna be this other person in this organization or something like that. As opposed to having like a board member who has a designated term and is doing it as a full-time job rather than kind of sitting on an advisory committee. And so I think that was one of the concerns is the cohesion and continuity of an advisory committee. That's the word I love. I'm a maven about continuity and I was just wondering that's a question of simply changing the language so that it becomes a time specified commitment of somebody on the advisory board. But anyway, I just was curious as to why you felt that that was an important policy juncture. Now I understand. Thank you. To be clear, I believe that that legislative council is relaying the flavor of the conversation that she heard on the Senate side. Not that she heard. Not me. I was just trying to kind of- No, no, no. And I- That's fine. It's just- I think it is very helpful when you're able to orient us to what folks were thinking as they were deliberating these sections of the bill. Representative Leclerc. Thank you, Madam Chair. Wasn't there some discussion on our part about the advisory council that there was going to be some fluidity to it depending on what the needs of the board were as to making sure they had the resources, but it just seemed to me that we felt that there was going to be different needs at different times. So therefore, you may not have everybody weighing in all the time. Yeah. I mean, I think we've got to dive into this section of the bill as proposed by the Senate because I don't think that we- I don't think that I and each of you can make your own determination, but I don't think that I envisioned the advisory committee having that level of influence or oversight of the Cannabis Control Board that they could actually gang up and boot somebody off the island. That seems like an unusual delegation of authority to an advisory group who we always, I think when the House Government Operations Committee in the last biennium was working on the bill, we really saw the advisory committee as being a collection of experience and expertise and perspectives from around the community, from around the state, who could help the Cannabis Control Board understand the competing interests or needs or desires. And you can imagine a scenario where two different members of the advisory committee might have a disagreement about what they think the answer is in terms of a fee rate or in terms of what's the cutoff between between this kind of regulation and that. And I think that I think we would be setting up a Cannabis Control Board that was vulnerable to a lot of sort of political machinations from within advisory committee if we moved forward with this provision. So I'm gonna need to be convinced that that's a good idea. So can I just follow up on Representative LeClaire's statement, which is that you do have language in there specifically authorizing the Board to establish subcommittees within the advisory committee. So like having, there's no sense necessary maybe having the plant botanist technical person and working with the racial justice person, maybe. So group, so you could do subcommittees. Something that you guys did include in your version as it came out of committee, but got axed by your appropriations committee was the ability for the Board to add more members to the advisory committee. You guys had done that and voted it out that way out of Gov Ops. But once it got to appropriations, they wanna know exactly how many folks might ask for a per diem and expenses. And so they took that out. To the dollar, I appreciate how diligent they are making sure we know exactly how much things are gonna cost. Right, which is why you have the new statutory language adding the medical dispensary folks in there is because you have to do it. It's neither Board can't do it. All right, last question of the day, Representative Anthony. Thank you very much, Madam Chair. Just a plea based on an experience from my previous assignment. And it has to do with the fraught nature of fee bills. The language in there that Michelle walked us through having to do with the Board revisiting every three years. Its fee structure is extremely important. At least let me put it as politely as I can. The existence of a fee bill has been something of an uneven exercise over the last five years or so. And I just wanna be sure that the cannabis board would have, pardon me, independent authority to submit a request for revision of fees rather than waiting for a fee bill. Because sometimes you'll wait a long time, I guess is what I learned two years ago. I don't think there's anything that is limiting them from doing that. I think it's more active that they shall be part of that. But thanks for raising that and I'll take a look at the language. I appreciate it, Michelle, thanks. Great, well, thank you so much, Michelle. Hopefully next week we'll be spending some more time with you to begin taking testimony on the various components of this bill. But I appreciate you helping us get oriented to the work of the Senate. Yep, look forward to it. And if anybody wants to reach out in the interim if you've got questions or need me to point you in the right direction to look at some language, I'm happy to do that. Wonderful, thank you so much. Thanks.


I've seen a couple talks this morning and most of them are 90 minutes. This talk is one hour, but I've got 90 minutes worth of material, so I'm just going to deliver it about twice as fast, or I'll cut stuff and try and make it so you don't notice. In way of short introduction, my name is Jeff Patton, and I've been in agile development since there's been agile development. I started with a process called Extreme Programming in 2000, the term agile was coined in 2001. During the 1990s, I'd started as a developer and well, I had a bit of an art background, so if you're a developer with an art background, that makes you the UI person. And if you're a developer with an art background and you can talk to people, that eventually makes you a product manager. And throughout the 90s, I did that, and then I started this Extreme Programming stuff in 2000, and I've been working with agile development ever since that term was coined in 2001. I need to come clean with you here, for everybody here. I have hated agile development since the very first day I encountered it. It's a real problem. I remember when I first started with agile development, I was immediately presented with the choice that I could either be a customer, is what they call the role, in Extreme Programming, product owners, what they'll call it now in Scrum, I could either be a product owner or I could be a developer. And I tried to explain it, well, I did both before and that wasn't okay. That's not the way agile processes work. So I said, fine, I do this because I like creating products for people, and so I'll be a customer. And then after spending a little bit of time as an agile customer, I was ready to kill myself because, well, I'll explain in a little bit more detail later, but typically an agile process is driven by placing someone with a lot of domain knowledge and in that customer role, and that person is responsible for telling the team what to build. That does not work. What works is spending a lot of time with your users and your customers, and, well, when I first started with agile development, there wasn't much interested in that. So I said, that's it, I've had it, I hate agile development, I quit, and I said, well, if you'll stay, you can be a developer. And I did that and that was great because I could do the work and enjoy my job and not have to care whether the product was good or not. All right, let's fast forward because I wanna talk about a way of working that is starting