BRATTLEBORO — On March 2, voters will be among a handful of Vermont towns considering whether to opt in to the state's retail cannabis market.
Under state statute, towns must vote to decide whether to allow recreational cannabis retail businesses to open within their borders.
The yes/no question on the Australian ballot for voters is “Shall the Town permit the operation of licensed cannabis retailers subject to such municipal ordinance and regulation as the Selectboard may lawfully adopt and implement?”
The ballot question has its supporters and opponents.
For some, legal recreational cannabis represents safety and economic opportunity by taking an existing illicit, unregulated market out of the shadows into the sunlight of oversight and product regulation. For others, legal recreational adult cannabis use represents the opposite: danger to the health of community members, especially minors.
Last October, the Legislature passed the bill that has become Act 164, which set up the state regulatory structure for recreational adult-use cannabis. Gov. Phil Scott let the bill become law without his signature.
According to an analysis released last August, the Legislature's Joint Fiscal Office projected retail sales between $23.1 million and $41.9 million for fiscal year 2023.
The law, which provides a regulatory framework for sales of cannabis products, directs a 6-percent sales and use tax to “fund a grant program to start or expand afterschool and summer learning programs, with a focus on increasing access in underserved areas of the State.”
An additional 14-percent state excise tax will bring more funds to the state coffers. By law, up to $10 million per year from those funds would be used for substance-abuse prevention programming.
The law also creates the Cannabis Control Board to oversee six types of licenses: cultivator, wholesaler, product manufacturer, testing laboratory, retailer, and integrated licensee.
The state is in the process of vetting members of the board.
Retail sales to the public are by statute designated to begin in 2022. However, Rep. John Gannon, D-Wilmington, the vice-chair of the House Committee on Government Operations, which had a hand in the crafting of the law, noted that the state is behind schedule in implementing the regulatory interconnections and might not make the 2022 timeline.
At the local level, a favorable opt-in vote only means that the town has said yes to allowing the retail market to exist - it does not grant permission for a cannabis retail store to open in town.
It also means that a cannabis business must go through the municipality's permitting and zoning processes.
Why the opt-in vote?
The requirement for towns to opt in to allow retail cannabis businesses is the result of a compromise struck by the Legislature.
The legislation as passed by the Senate would have required towns to opt out of the market, meaning that retail sales would have been permitted in municipalities automatically. Under the Senate bill, municipalities could call Town Meetings to approve or prohibit “the operation of a cannabis establishment or a specific type of cannabis establishment” within its borders.
Scott, however, said he would veto Act 164 if it included this opt-out option. The House created the compromise: that all municipalities would vote to opt in to the retail market.
All other cannabis licenses established under the law are valid everywhere in the state.
The law allows towns participating in the retail market to regulate it with zoning.
“The only thing you can't do is create a zoning ordinance that would specifically prohibit a cannabis establishment,” Gannon said.
Towns can use a variety of zoning tools when considering retail cannabis businesses.
Last week, the Planning Commission released a statement regarding the ballot item.
In its statement, the commission outlined what zoning the statute allows towns to use to regulate retail cannabis businesses. The commission also noted that if implementing new zoning, it will ask for public input.
“Should the community vote to opt-in to retail cannabis, the Planning Commission will conduct a public process to consider whether the existing regulations are sufficient as written or whether changes are needed,” the Commission wrote. “In carrying out this duty, the Brattleboro Planning Commission will seek broad public involvement and keep its activities open and inclusive.”
The commission reminded voters that the state's cannabis retail legislation is “very much a work in progress.”
“The Act empowers communities to create a local cannabis control commission and for such commission to condition issuance of a local license on any zoning bylaw adopted pursuant to [the state cannabis law],” the commission wrote.
The commission also outlined the “zoning controls” allowed under state statute regarding zoning cannabis retail businesses.
• The first, zoning districts govern the location, density, and standards of different kinds of development within borders defined on a map. For example, an area zoned residential will have different requirements around usage, lot sizes, setbacks, or building heights compared to an area zoned for industrial or agricultural use.
• Conditional uses pertain to special land uses that are allowed but require a permit. The Development Review Board then reviews the application and decides. It can approve an application subject to a list of conditions.
• Town zoning can also “regulate quantifiable impacts of proposed development” - like noise, odor, glare, and vibration - to guard against disturbing neighboring properties.
• Finally, under Act 164, towns can also regulate parking, loading areas, and signage.
“These types of regulations already exist in Brattleboro's Land Use and Development Regulations (referred to as the zoning bylaw),” the Planning Commission wrote. “It is the Planning Commission's responsibility to draft zoning bylaws and the Selectboard's responsibility to adopt them.”
If zoning amendments are proposed, the Planning Commission and Selectboard “will both conduct formal public hearings, as required by law.”
Revenue?
Part of the opt-in conversation at the municipal level has focused on what potential revenue, if any, that the town can raise.
The state will levy excise taxes on the sale of recreational cannabis. But at the municipal level, so far the main source of extra tax revenue would come from the 1-percent local-option sales tax, which itself requires voter approval. Taxes are collected by the state and returned to towns, minus a state administrative fee.
The state Department of Taxes lists 15 towns that participate in this program, including the Windham County towns of Brattleboro, Dover, Stratton, and Wilmington.
Over several recent meetings, Londonderry's Selectboard members discussed what opting in would mean for a town without the 1-percent tax.
Londonderry will hold its in-person town meeting later in the spring but, so far, board members have viewed opting in and considering the 1-percent local sales tax as parallel issues.
The Bellows Falls Village Trustees have had similar discussions.
Since Brattleboro has already adopted the 1-percent local-option sales tax, Town Manager Peter Elwell said that such tax revenues from cannabis retail sales will be returned to the town “commingled with all the other local-option sales tax revenue so it will be a general revenue that is not earmarked for any particular type of expenditures,” he wrote.
Gannon said that the legislation will let towns charge licensing fees. Under the statute, he said, towns will also have local cannabis control boards similar to the liquor control boards - which, in most cases, are the Selectboard acting in that capacity.
Unsafe? Or safety through regulation?
Meanwhile, some groups are warning the community to “go slow.”
Physicians, Families & Friends Education Fund describes itself as “a physician-led nonprofit group of concerned medical professionals seeking to educate on the science of cannabis, including the public health risks and harms of the drug.”
According to its website, its members believe that legalizing recreational cannabis will result in negative impacts on the community.
For example, the group claims on its website that allowing retail sale of cannabis means more young people becoming addicted and more people needing emergency services.
The organization urges communities to have zoning in place before voting to opt in. Ultimately, the organization wants communities to have the ability to reverse their initial opt-in vote.
In a press release, Physicians, Families & Friends wrote that it is “informing the public of this defect and calling on the legislature to change the statute to allow a 'yes' vote to be followed, later, by a 'no' vote that means something, if the public finds that the results have been unacceptable to their community.
“Until the statute is changed, Physicians, Families and Friends is calling on cities and towns to hold off on approval.”
Last month, Building a Positive Community (BAPC) conducted an informal retail cannabis survey with the aim of understanding community members' responses about retail cannabis. The survey received 228 responses from Brattleboro residents out of more than 300.
“Prominently, the results of the survey suggest that among the greatest concerns of Brattleboro residents is how the sale of retail cannabis in town might affect youth and vulnerable populations,” wrote BAPC executive director Cassandra Holloway.
“This is of particular note, as BAPC is focused on public health and reducing the harms related to substance misuse, especially as it relates to our youth, young adults, marginalized populations, and people with substance-use disorders,” she added.
Brattleboro residents would like more information and education before the vote, wrote Holloway.
“A large contingent stated they have quite a few questions and concerns about how retail cannabis will play out in Brattleboro and who will control and ultimately benefit from the revenue,” she wrote.
According to survey results supplied by BPAC, most of the respondents also said they would vote to opt in.
Their top four concerns were youth having more access to the substance, lack of clarity about who financially benefits from the retail sales, the substance's impact on a community's vulnerable members, and state-versus-local control.
The yes and no answers to the question “Do you feel like the town has given you enough information to assist you in making your vote?” were very close with slightly more saying, no.
According to Windham County data from the 2019 Vermont Youth Risk Behavior Survey, conducted by the Vermont Department of Health, 32 percent of the high school students who responded said they had used cannabis within the last month. That rate has increased from 2017, where 27 percent of high-school students said they had used cannabis.
Holloway has also expressed concerns about how the act of legalizing adult use of recreational cannabis creates the perception that the substance is safe for young people to use.
In previous interviews, she has pointed out that studies have shown that substances can have a bigger impact on developing brains and increase the risk of becoming addicted.
The survey is still live on bapc802.org, and the organization urges people to continue to respond to it until the vote.
Eliminating the black market
According to Gannon, regulating the Wild West of the illicit cannabis trade was one reason the Legislature passed Act 164.
Right now, cannabis can come in any potency with any number of chemicals mixed in, he warned. State statute, however, includes a strong testing requirement and caps the level of tetrahydrocannabinol (THC) - the primary psychoactive compound in cannabis - a product can contain.
“We thought a lot about how to get black-market sellers into the regulated market,” he said. “It's my hope that when the Cannabis Control Commission is appointed and they get an executive director, that they really think hard about how we can encourage eliminating the black market.”
Gannon also serves on the nominating committee for the Cannabis Control Board. The committee sent its list of candidates to Gov. Phil Scott last week, he said.
Like it or not, Gannon said, cannabis is out there. In 2019, an outbreak of lung injuries, particularly among young people, from vaping was linked to additives like vitamin E acetate. According to Gannon, the vaping products were all found on the black market.
“There's many studies that show that high school students have easier access to cannabis than they do alcohol,” he added. “The question that people should think about is, do we want them to get it from somebody who's selling it on the black market? Or do we want to have a regulated market that may be able to restrict sales [from those who are] underage?”
From an economic development perspective, Gannon said that towns need to decide what's best for them, but to remember that if people can't buy cannabis in their town, they will drive to another town to buy it.
“Voting down retail establishments doesn't mean that your folks in your town are not going to smoke cannabis,” he cautioned. “It just means you're going to go someplace else to get it.”