Committee weighs cultivator fee changes, limited showcase-event pilot and excise-tax routing for cannabis regulation fund

The Senate Economic Development, Housing & General Affairs Committee reviewed committee amendment draft 1.2 to the cannabis portion of the bill, discussing three principal areas: a proposed rebalancing of cultivator license fees (raising indoor fees and lowering outdoor fees), a time-limited showcase-event permit pilot to allow regulated sales outside retail premises, and a change to how cannabis excise-tax revenue is routed between the Cannabis Regulation Fund and the general fund for future fiscal years.

Committee staff described the fee proposal as a revenue-neutral effort to reflect relative productivity and operating differences between indoor and outdoor cultivation. James Pepper, chair of the Cannabis Control Board, told the committee the change was a "crude" attempt to reflect the higher effective productivity of indoor operations and that the proposed mix would be slightly revenue positive in the board's estimate. "The directive to me was, to find a revenue neutral proposal that incorporates the kind of relative profitability between the indoors and outdoor cultivators," Pepper said.

Several cultivators and retailers told the committee the proposed split did not rest on a sufficiently detailed economic analysis. Joshua Decatur, who said his firm operates mixed cultivation, said overhead and profitability are more complex than a simple harvest-count ratio. "Indoor cultivation is definitely more overhead, but it is more productive," he told the committee; other witnesses said outdoor production can have lower cost-per-pound and more variable cash flow. Several members asked that the…