Cannabis Control Board details FY2026 budget, lab buildout and enforcement plans

The Cannabis Control Board told the House Appropriations Committee on Feb. 10 that it plans to open a state reference laboratory in Colchester, bolster enforcement staff and move to rely on the general fund after a change in how cannabis excise taxes are allocated for fiscal year 2026.

The presentation, led by James Pepper, chair of the Cannabis Control Board, and Olga Fitch, executive director, outlined staffing levels, a lab timeline and revenue projections and flagged a proposed additional attorney position to handle enforcement caseloads. “We are now at 7, field agents, plus a deputy director and a director to do the compliance and enforcement work,” Fitch said, describing the board’s current enforcement staffing and vacancies. She added that the board has “just last week gone under lease ... in Colchester” and is entering a phase to build out a quality-control lab.

Why it matters: the board currently relies on a mix of excise tax transfers and fee revenue to pay operations. Fitch said the governor’s proposed FY2026 budget moves excise tax receipts to the general fund and leaves the Cannabis Regulation Fund composed solely of fees, renewal and application charges and administrative penalties. Fitch said projected fee-and-fine revenue for FY2026 is about $2.61 million, and the board expects the governor’s recommendation to allow retention of necessary year-end balances to meet operations.

Most important facts: Fitch said the agency’s quality-control lab staff positions are vacant; while private labs now perform testing, the board will use its own lab for quality assurance and forensic testing related to enforcement. Fitch said the lab fit-up of the leased Colchester space will take about three months and the agency expects to post a lab director position within one to two weeks; technicians will be hired after that director is in place. She said the board currently contracts with private labs for routine testing and plans the state lab primarily for agency QA and forensic work.

On enforcement the board described civil enforcement powers and its relationship to law enforcement. Fitch said agency staff are civilians who can issue notices of violation, letters of warning, corrective action plans, fines and license suspensions. “When our inspectors find criminal activity, we refer to DLL,” she said, referring to the Department of Liquor and Lottery. The board has executed a memorandum of understanding with DLL and budgeted $10,000 in grant/memo funding to support joint operations when certified law enforcement participation is required.

The board also described increased contested enforcement cases in recent months, citing advertising violations and operational lapses (examples: cameras or point-of-sale systems disabled, ID checks not performed) as frequent issues uncovered during inspections. Fitch said many cases settle under corrective action and fines, but the board has seen an increase in parties contesting settlements and proceeding to hearings.

Separately, Fitch described a personnel proposal outside the operating budget: an attorney position to sit inside the compliance and enforcement division and manage the agency’s enforcement caseload. The role would draft notices and represent the agency in contested cases; the board said the position would separate enforcement prosecution from the agency’s policy attorney to avoid conflicts of interest and workload bottlenecks.

Licensing and siting: Pepper and Fitch discussed retail licensing policy and the board’s current moratorium on new retail licenses. Fitch said the board was initially authorized in statute to close statewide application windows but not to cap licenses by town; more recent legislation gave the board authority to set retail siting rules based on population and market need. She said those rules are in rulemaking and public comment; a preliminary outcome described by staff would set a maximum of six retail stores per municipality (for example, Burlington’s current higher count would be grandfathered until incumbent licensees exit and slots reopen under the new cap). The board has contracted consultants to perform a supply-and-demand analysis to inform siting rules.

Budget details and timeline: Fitch summarized the board’s operating budget moving from just over $6 million in FY2025 to about $6.5 million in FY2026, noted a $25,000 increase in purchased services tied to starting the lab while continuing to contract for testing, and an approximately $90,000 annual property rental cost for the Colchester lab space. She said the board anticipates buying an additional vehicle for a new field agent. Fitch told the committee that the equipment plan includes multiple spectrometers (“I think we have 4 machines”), and that building and maintaining lab equipment is expensive but necessary for the board’s reference and forensic testing needs.

Questions from committee members focused on enforcement authority, certification and whether enforcement staff are sworn officers. Fitch confirmed enforcement staff are civilians and that the board relies on DLL or state police for criminal enforcement. Representative Ralph Harrison asked whether enforcement staff are certified law enforcement; Fitch responded they are civilians and the MOU with DLL is used when law enforcement presence is needed.

Context and next steps: Fitch and Pepper said the board has notified House Ways and Means leadership and is coordinating on revenue and fee adjustments through a miscellaneous cannabis bill. Committee members and staff asked follow-ups about how excise tax changes would affect the dedicated prevention funding stream; Fitch said the governor’s proposal preserves delineation for substance misuse prevention within the budget structure. The committee chair said they would follow up with the House Ways and Means chair.

No formal committee action or vote occurred during the presentation; members heard the briefing, asked questions and the meeting proceeded to scheduling and the next guest.

Ending note: Fitch and Pepper emphasized the board’s transition from contract labs to an in-house reference lab and the board’s intent to refine retail siting rules; the committee did not take votes but noted the board will continue coordination with Ways and Means and other legislative committees as rulemaking and budget implementation proceed.