Vermont advocates urge excise-tax reinvestment, direct market access and agricultural status for cannabis

Members of the Vermont Cannabis Equity Coalition told a House committee Friday that the state's regulated cannabis market remains incomplete and is producing financial strain for small growers, patients and legacy producers.

Reverend Mark Hughes, executive director of the Vermont Racial Justice Alliance, told the committee “we envision a Vermont cannabis market where black and brown and poor folks are assured an equitable opportunity for success within every aspect of the industry,” and urged lawmakers to prioritize equity and community reinvestment.

The coalition asked lawmakers to direct a share of cannabis excise-tax revenue to community supports and small-business assistance, preserve the legal status Vermont granted some cultivators under Act 158, and create pathways for small producers to sell directly to customers. “There is a collapse. There is a lot of pain in the market right now amongst licensees, notably our small producers,” said Jeffrey Pizzitello, executive director and cofounder of the Vermont Growers Association.

Why it matters: Coalition members said current market structure — including limited direct-market access, high compliance costs, restricted access to federal funding and a concentration of retail outlets — prevents many small producers from surviving in the regulated economy and discourages legacy producers and customers from transitioning above ground.

Key requests and context - Excise-tax reinvestment: Ornela Mata Figueroa, co-director of the Land Access and Opportunity Board (LAOB), said the Cannabis Control Board (CCB) recommended dedicating a portion of excise-tax revenue to community reinvestment. The coalition proposes directing 25% of the excise tax to the LAOB to fund down-payment assistance, land purchases and community-driven housing and agricultural projects. The LAOB estimate in testimony placed that share at roughly $5,600,000 for the current year if the allocation is made.

- Cannabis business development fund and equity spending: Coalition witnesses urged augmenting the existing business development fund with appropriations to provide financial and technical assistance tailored to small cultivators and social-equity licensees. Jesse Lynn Dolan of the Green Mountain Patients Alliance also asked the legislature to appropriate $1 million from excise tax receipts to the cannabis business development fund to support financial and technical assistance.

- Agricultural status and outdoor cultivation protections: Witnesses asked the committee to preserve and expand the agricultural protections created in Act 158 (2022) and related bills that allow certain outdoor cultivation to qualify for current-use treatment, farmland protections and rebuttable “right-to-farm” presumptions. Graham Ewing Strychnauf, policy director at Rural Vermont, said those protections make land access and viability more feasible for small outdoor growers and cautioned that last year’s legislation (Act 166 and H.6112 provisions) that created cultivation districts, setbacks and preferred-cultivation designations have threatened those gains.

- Direct-market sales: Coalition members argued that small producers need the ability to sell directly to consumers or through scaled point-of-sale systems to capture value and survive. “We need to see cultivators who came up not being left alone,” Strychnauf said, adding that direct-sales pilots should include scale-appropriate security, recordkeeping and tax-accounting measures developed with the CCB.

- Medical program administration and price management: Jesse Lynn Dolan, a registered nurse and cofounder of the Green Mountain Patients Alliance, urged moving eligibility and symptom-management oversight for the medical cannabis program to the CCB and establishing a price-management mechanism to maintain medical pricing relative to the adult-use market. Dolan said ensuring affordable medical supply is critical for patients and caregivers and called for a restored medical advisory panel made up of medical professionals.

Details and evidence cited in testimony - Market size and scope: Witnesses cited figures including about $17,000,000 in excise-tax revenue to date, roughly 1,000 new jobs and about 600 active licensees. They stressed those headline numbers mask business distress among small licensees.

- Costs and barriers: Testimony outlined barriers including compliance costs (an estimate of $15,000–$20,000 in initial administrative costs for a tier-1 outdoor license), exclusion from federal grants and tax deductions, limited access to banking and insurance, and bottlenecks from wholesale-only markets.

- Land access and LAOB role: The LAOB described how a designated share of excise-tax receipts could fund down-payment grants, support community developers, and underwrite land and housing projects aimed at Vermonters who are low-income, historically marginalized, or otherwise face barriers to land ownership.

Discussion and next steps: Committee members asked for more technical detail and follow-up. Witnesses said they are prepared to return for more focused briefings on (1) direct-market design and pilot options, (2) the outdoor-siting study and its municipal survey results, and (3) medical-program reforms. Coalition representatives also said they would continue discussions with the Cannabis Control Board and House and Senate agriculture committee members to convert proposals to bill language.

Safety and participation: Several witnesses said they limited in-person attendance because a recent incident at the State House left a community member feeling unsafe; they said they intend to pursue that concern with legislative leadership and law-enforcement officials while continuing advocacy work.

What lawmakers could consider: The coalition’s requests include earmarking a portion of the excise tax for community reinvestment (the 25% LAOB proposal), directing $1 million to a cannabis business development fund for grants and technical assistance, preserving Act 158 agricultural protections for outdoor cultivators, piloting scale-appropriate direct-sales models, and transferring medical-program oversight functions to the CCB with medical-professional involvement.

The coalition asked the committee for time to provide more operational details and draft statutory language. Several witnesses said they would return to discuss specific bill language, pilot designs and funding mechanisms.