Committee backs retailer‑mediated cannabis ‘showcase’ pilot to test sales outside stores

The Senate Economic Development, Housing & General Affairs Committee and members of the Cannabis Control Board discussed a pilot program to allow regulated cannabis sales outside retail storefronts at a limited number of licensed events this summer, directing staff to prepare draft language for the committee to consider at its next meeting.

The pilot “really the purpose of it is to answer one simple question: is can a sale of cannabis happen in a regulated way outside the confines of this retail establishment?” said James Pepper, chair of the Cannabis Control Board. Pepper and other board staff described a retailer‑mediated model similar to hospitality special‑event permitting in liquor law, and the committee discussed profit sharing, advertising waivers for event promotion, and tax‑collection mechanics.

Why it matters: Lawmakers framed the pilot as a short‑term experiment to determine whether direct sales at supervised events can expand market access for small craft cultivators without increasing risks of diversion, underage sales or lost tax revenue. Committee members repeatedly emphasized the need to structure the pilot so “small craft growers” receive meaningful benefit and that the board return findings for evaluation.

Most important facts

- Scope and model: The draft pilot would allow a limited number of “cannabis showcase” event permits, run through a retail licensee who would operate point‑of‑sale systems and collect taxes; the draft referenced a proposal that pairs a retailer with multiple licensed cultivators or manufacturers. Committee staff described a model adapted from other states’ special‑event permitting.

- Profit sharing and market access: Committee members and industry speakers debated profit splits and market structure. One retailer who operates events told the committee, “we did 4 of them, and our split was 90% to the grower, and that was totally fine,” describing an operational model in which growers retain most receipts and the host retailer covers venue and marketing costs.

- Tax and legal constraints: Board counsel warned that Vermont’s cannabis excise tax statutes (discussed as the “cannabis excise tax chapter of Title 32”) are currently written with integrated retail licenses in mind, and that changing tax treatment or excise‑tax waivers would require statutory adjustments. The board and tax staff said the pilot can proceed within existing statutory constraints only if the retailer continues to collect and remit excise taxes.

- Advertising and promotion: Committee members discussed temporary relaxations of advertising restrictions for the pilot so potential customers could learn about events (one option was a limited waiver of the usual audience‑demographic proof requirement for cannabis advertising). Some members cautioned that too many incentives (tax waivers, advertising relief) could make the pilot non‑comparable to the regular market.

- Protections for small growers: Draft language circulated to the committee included eligibility terms intended to prioritize small craft cultivators (references in the draft include a minimum number of participating cultivators and limits on affiliation with the hosting retailer). Committee members asked the Cannabis Control Board to build explicit findings into permit approvals showing that contractual arrangements “are not exploitative and optimize access by small cultivators.”

- Municipal control and zoning: Members discussed municipality authority to regulate retail siting or apply moratorium‑like tools. Legislative counsel said zoning and local‑control changes involve land‑use expertise and may require additional drafting time; committee members asked the board and counsel to return next year with more detailed proposals if necessary.

Committee direction and next steps

The committee instructed Cannabis Control Board staff and legislative counsel to draft and refine the showcase‑permit language for consideration at the next committee meeting. Committee members asked industry stakeholders to provide input on reasonable profit‑share splits and to propose operational and marketing practices the board should consider. No formal vote or final rule was adopted during the session recorded in the transcript.

Quotations

“I am a regulator. My job is to take what the legislature creates and try and implement it,” James Pepper, chair of the Cannabis Control Board, told the committee as he framed the board’s role in designing a pilot. Pepper summarized the pilot’s central test: “the pilot really the purpose of it is to answer one simple question: is can a sale of cannabis happen in a regulated way outside the confines of this retail establishment?”

“We did 4 of them, and our split was 90% to the grower, and that was totally fine,” a retail operator identified in the meeting as Josh said when describing previous event experience and how costs were covered. Josh added that tax remittance and integrated point‑of‑sale systems are readily available: “It takes 5 minutes to make an account on myVTax.”

Michelle, a member of the Office of Legislative Counsel who worked on draft language, said of zoning proposals, “I’m not the government, operations person or the land use person,” and cautioned that any statutory changes to local zoning authority would require additional subject‑matter review and drafting time.

Ending

The board and committee characterized the plan as a limited, experimental approach intended to gather evidence this summer and report back. Staff were asked to return refined draft language and an implementation plan to the committee at its next scheduled walk‑through so members can decide whether to move the pilot forward and what statutory or regulatory changes (if any) will be required.