Legislative committee reviews cannabis 'showcase' pilot, funding shift and market fixes

Members of the Economic Development, Housing & General Affairs Committee on Thursday considered a package of proposed amendments to Vermont’s cannabis law that would create a temporary "cannabis showcase" event permit, change the Cannabis Control Board’s funding mix, adjust licensing fees and address medical-patient supports and social-equity spending.

The measures, presented by James Pepper, chair of the Cannabis Control Board, would allow a retailer in good standing to apply — with local approval — to host an adults‑only, controlled-access sales event if the retailer partners with a minimum of three licensed cultivators or manufacturers and presents a security and product‑sale plan to the board. Pepper described the concept as "kind of a farmer's market for adults only" and said sales would be processed through a retailer’s point‑of‑sale system while cultivators could interact with consumers at the event.

Why it matters: committee members and stakeholders said the proposals aim to expand sales opportunities for small growers and manufacturers while protecting public health and enforcement controls. Department of Health and prevention advocates countered that shifting excise revenue or increasing point‑of‑sale venues could affect youth exposure and prevention programs.

Showcase pilot and event rules

Under the draft language Pepper described, a local legislative body or local cannabis commission would first sign off on a proposed event. The CCB would then review security plans that "mimic[] a retail shop," ID and access controls, diversion‑prevention measures and proof of commercially reasonable insurance. Pepper recommended limiting the pilot to "up to five" events statewide with a report back to the legislature in December or January. He said the pilot should be temporary and sunset at year end unless extended.

Funding, excise tax and the CCB budget

The package includes a proposal to change how the board's operations are funded. Historically the board has been primarily fee‑supported; the amendment would allow a portion of cannabis excise tax receipts to cover any shortfall between fee revenue and operating expenses. Pepper said year‑to‑date fee revenue is about $2.4 million and operating expenses are roughly $6.5 million. He noted last year’s statewide cannabis tax receipts were about $17 million in excise tax and $7 million in sales tax, roughly $24 million total.

The draft would route 30% of excise tax receipts in real time to a prevention special fund; the remaining 70% would flow to the cannabis regulation fund to cover board operations, with any leftover transferred to the general fund. Kelly Dougherty, deputy commissioner at the Vermont Department of Health, urged the committee to preserve the 30% allocation for substance‑misuse prevention, saying, "We are here to strongly advocate for preserving the 30% of the excise tax going to substance misuse prevention." Dougherty warned that shifting prevention dollars could reduce funding for established statewide prevention efforts.

Fee schedule and market structure

Pepper described proposed fee changes that would lower outdoor cultivator fees and raise indoor cultivator fees (except for the smallest tier) to better match production cycles and relative profitability; he said the changes were intended to be revenue neutral. The committee agreed to refer detailed fee decisions to the finance committee, saying market structure and fees overlap and require actuarial and fiscal review.

Social equity and community reinvestment

Stakeholders, including Vermont Cannabis Equity Coalition representatives and growers, asked the committee to appropriate recurring funds for business development and community reinvestment. Amy Lembs of the Vermont Growers Association and VCEC said the coalition recommends appropriating $1 million annually from excise revenue for cannabis business development and directing 25% of excise revenue to the Land Access and Opportunity Board for community reinvestment programs.

Medical program, education and patient protections

Medical‑program advocates and health professionals urged changes to improve patient access, education and oversight. Jessie Lynn Dolan, a registered nurse and former director of the American Cannabis Nurses Association National, said the state’s free nurse advice hotline shut down in April 2024 and called for an annual minimum of eight hours of continuing education funded by the cannabis excise tax for employees who interact with medical patients. Dolan also supported reestablishing a Symptom Relief Oversight Committee under the CCB to provide medical input on eligible conditions.

Advocates also asked for expanded plant counts for medical patients, caregiving allowances, cost‑free expungement of cannabis convictions and policies to allow public consumption where lit tobacco is permitted. Amy Lembs and other industry witnesses urged allowing regulated direct sales events and on‑farm/off‑farm direct sales to increase access in small communities and give craft producers direct market channels. Lembs said, "Direct to consumer sales is the lifeline that small producers in the Vermont cannabis industry need to survive now."

Enforcement, administrative feasibility and oversight report

Deputy State Auditor Tim Nash told the committee that language in the bill would delete a previously required auditor’s report on whether the Cannabis Control Board’s structure is the most efficient for carrying out statutory duties; he said the auditor’s office had asked that the requirement be removed because the original mandate lacked precise benchmarks. Gabe Gilman, general counsel for the CCB, said the board has engaged a consultant with interstate cannabis expertise to review operations and efficiency and that the consultant’s findings will be public. Gilman cautioned that nationwide no other state has implemented broad on‑farm direct sales at scale and said changing the retail‑centered architecture would be administratively difficult.

Debate and next steps

Committee members and stakeholders repeatedly balanced two goals: expanding market opportunities for small cultivators and protecting public health and prevention funding. Several industry witnesses asked the committee to consider specific amendment language; Pepper and others said they would circulate draft language to legislators and interested groups and defer detailed fee work to the finance committee. Pepper suggested a December or January report back on the pilot events.

No final votes were recorded during the hearing; committee members asked staff and stakeholders to submit amendment language for review and signaled that parts of the package — including fee adjustments — will be considered by the finance committee.

Ending

The committee concluded the session with plans to review submitted amendment language, coordinate with the finance committee on fees and continue receiving stakeholder input on prevention funding, direct‑sale pilots and medical‑program reforms.