Senate amendments create limited cannabis "showcase" pilot, prompt board staffing and fee questions

James Pepper, chair of the Cannabis Control Board, told the House Government Operations & Military Affairs Committee on May 28 that Senate amendments to H 321 would add a short-term pilot for cannabis "showcase" events and contain other changes to fees and board appointments.

The proposal that drew the most attention is a pilot to permit cannabis-only showcase events—described in the hearing as similar to a farmers market—allowing retailers in good standing to partner with at least three small cultivators or product manufacturers to sell directly to consumers under a two-stage permit process (local municipal permit followed by a board permit). Pepper said the pilot is limited to no more than five events total and would run through Dec. 31, 2026.

The bill would restrict events to municipalities that have opted in to retail cannabis sales (Pepper estimated roughly "80 or 90 towns"). Events may be outdoors or indoors but must be held in a secure, access-controlled area screened from public view so persons under 21 cannot reasonably see activity. Retailers would use their point-of-sale systems and staff to verify IDs and handle sales; the retailer must submit a profit-sharing plan to the board intended to benefit small cultivators. Pepper said the legislature did not set a required percentage for profit sharing and left approval to the board rather than prescribing a floor; he noted New York requires a 50/50 split in its comparable program but said the Senate did not adopt a numeric mandate.

Pepper outlined three other Senate amendments. One would have reinstated the current funding mechanism that lets a portion of the cannabis excise tax cover any gap between fee revenue and board operating costs; that funding formula was removed by Senate Appropriations. A second adds a twelfth member to the Land Access and Opportunity Board (LAOB), appointed by Migrant Justice; Pepper said the LAOB is currently an 11-member body and that the change came at the request of a senator. A third, proposed in Senate Finance at the lieutenant governor's request, would have reduced fees for outdoor cultivators and offset that change by increasing indoor cultivator fees; Finance removed that fee change after members said there had not been time to hear from all affected parties.

Senate Finance also added a study/report requirement (identified in the amendment as section 12(a)) directing a review of whether a portion of the cannabis excise tax should be dedicated on a continuing basis to industry technical assistance and LAOB community reinvestment, and directing the board to perform a full review of fees and comparable jurisdictions.

Pepper told the committee the board is already understaffed and that a position the board sought was struck from the Appropriations amendment; he said the position would have been funded by excise-tax revenue rather than general fund dollars. "We could just do 1 and, you know, it wouldn't be that much extra work to do just a single 1," Pepper said when asked whether the board could limit the pilot to reduce workload. He added, "this is kind of a proof of concept idea. Can we do this safely?" and said the board has discretion to limit scale or cancel remaining pilots if events go poorly.

The bill as amended by the Senate was on the House committee calendar for floor action the same day; Pepper said some of the economic-development changes had been stripped by subsequent committees and that the committee would likely see the bill returned with those strikeouts. He offered to return for further questions if members wanted more detail.

Next steps: H 321 was on the House calendar following the briefing; several Senate amendments are expected to be absent from the version that reaches the House because Senate committees removed them, but the showcase pilot and the Finance study language are among the changes the committee discussed.