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Senate committee debates cannabis excise allocation and fee changes after fiscal-office estimate shows shortfall
Summary
Legislative counsel and Cannabis Control Board members told the Senate Economic Development, Housing & General Affairs Committee that draft amendment 3.1 to H.321 shifts how excise tax and licensing fees flow and will increase the board's reliance on excise tax revenue after proposed fee reductions produce a multi‑thousand dollar shortfall.
Members of the Senate Economic Development, Housing & General Affairs Committee on the Ides of May reviewed draft 3.1 of H.321 and focused on where cannabis excise-tax revenue and licensing fees will be deposited and how those choices affect the Cannabis Control Board's budget.
The committee heard from Michelle Childs of the Office of Legislative Council, who walked members through the committee amendment and pointed to language that would strike existing subsection d and move toward transferring the balance in the cannabis regulation fund back to the general fund “at the end of each fiscal year,” as the Joint Fiscal Office (JFO) had recommended.
The change reflects a broader policy decision under discussion: whether excise revenue should be routed to the general fund and used to support agency budgets, or kept in a dedicated cannabis regulation fund that the board would draw from directly. Committee members and board representatives framed the tradeoff as one between direct regulatory funding and general‑fund flexibility for agencies.
Committee members also raised the impact of proposed fee changes for cultivators. The amendment reverts some indoor cultivator and mixed‑cultivator tier‑2 fees to existing levels after industry testimony. Committee discussion referenced a JFO estimate that the fee adjustments would leave roughly a $68,000 deficit compared with an earlier fiscal note that had been about $48,000 in positive revenue if indoor tier‑2 fees were doubled.
Cannabis Control Board representatives told the committee that licensing fees alone do not cover regulatory costs. The board reported roughly $2.5 million collected last year from licensing fees and administrative penalties, with a current board budget around $6.5 million and about $4 million coming from the excise tax in the referenced year. Committee members highlighted that lowering fees increases reliance on excise revenue to fund enforcement and licensing work.
John Rogers, Cannabis Control Board member, told the committee, “We're neutral on the fees,” describing the board's position that the committee should set policy priorities and the board would implement them. Legislative counsel and board staff said the committee could direct the fiscal tradeoffs to the Finance Committee for more detailed budget work.
Committee direction: the Senate will carry the committee amendment forward and let Finance and the Joint Fiscal Office further vet the revenue assumptions and how fee changes affect regulatory capacity.
