Senate Finance removes grower-tier fee changes from H.321, directs Cannabis Control Board to study fees

Senate Finance on Thursday removed proposed changes to cannabis grower tier fees from its proposed amendment to H.321 and directed the Cannabis Control Board to study cannabis fee schedules and return recommendations to the committee by Nov. 15.

The move came after staff described a substitute amendment to H.321 that would fold numerous cannabis regulatory changes — including a new trim-and-harvest service license, expanded background-check authority, and a two-year option for employee ID cards and product registrations — into the bill. Kirby (legislative staff) told the committee the amendment also would require the Cannabis Control Board (CCB) to submit a report by Nov. 15 with “a summary of all cannabis fees in effect in fiscal year ’26, including the amounts of revenue derived from each fee in fiscal year ’25” and recommendations for adjusting the fee schedule.

Why it matters: The committee was confronted with a policy tradeoff proposed by a separate economic development amendment that would reduce some outdoor-grower fees and increase some indoor fees. James Pepper, chair of the Cannabis Control Board, urged a comprehensive review before enacting immediate fee shifts, saying, “Taking a more comprehensive, holistic look at not just the cultivation fees, but the product registration fees… and come back, early enough where you guys can really take a hard look at this.”

What the amendment would change: Staff outlined several provisions in the amendment. Among them: - An allocation shift that would begin next July directing 70% of cannabis excise tax revenue to the cannabis regulation fund for CCB use; other effective dates in the amendment are July 1, 2025. - Clarifying that hemp-infused products deemed intoxicating by the CCB are regulated as cannabis. - New license types and authorizations, including a trim-and-harvest service license designed to allow businesses to operate at multiple cultivators’ locations, and a pilot allowing up to five permitted cannabis “showcase” or sampling events. - Rulemaking authority changes for the CCB and expanded options for background checks in the event of FBI access denials. - A fee schedule drawn from the House version of the fees, with the amendment directing the CCB to report on fee revenue and comparable jurisdictional fees.

Public testimony shaped the committee’s decision. A grower who identified himself to the committee as Sam Belovats (grower and retailer) told members the industry currently employs about 1,200 Vermonters and generated roughly $8.1 million in sales tax and $19.7 million in excise tax in 2024. He said small, rural businesses are “creating jobs and creating successful small businesses” and urged the committee to consider whether certain fees — for example, medical ID card fees — should be adjusted for vulnerable patients.

Angela Payette, co-owner of Forbin’s Finest and Forbin’s Reserve, testified about start-up costs for an indoor tier-3 cultivation operation, saying, “Our startup cost was about $700,000. Each one of our grow lights is a thousand dollars, and we have 75 of them. We have at least $50,000 worth of HVAC equipment.” She said a disruption in fee policy could harm small indoor operators.

Committee action and next steps: After extended discussion about the fiscal and market implications of changing fees midyear, the committee agreed to remove the grower-tier fee changes from the amendment and to retain the other regulatory changes in H.321. Chair Cummings told members, “We’re just gonna put the cannabis fees into a study recommendation,” directing the CCB to consult stakeholders and return recommendations. The committee also left in place provisions that would require the CCB’s November report to include fee revenue history, projections, comparable fees from other jurisdictions and policy recommendations.

The committee did not adopt immediate fee increases or decreases during the hearing. Members cited limited time to analyze fiscal impacts and testimony indicating that abrupt fee changes could push some smaller operators out of business; Pepper warned that doubling fees for certain license holders could reduce overall revenue if participants leave the market. The CCB and industry representatives signaled willingness to participate in a structured review and stakeholder process.

The CCB’s report is due Nov. 15 to the legislative committees listed in the amendment, and the committee plans to revisit fee policy once it has the board’s data-driven recommendations.