Committee asks counsel to draft amendment clarifying hemp intermediaries, fees and shared equipment use

BURLINGTON — The Agriculture, Food Resiliency, & Forestry committee discussed an amendment that would place hemp product oversight under the Cannabis Control Board and asked counsel to draft clarifying language to address hemp 'intermediaries,' fee equity and dual‑use equipment.

Chair (committee) opened the discussion by asking whether the proposed amendment would cover hemp products that are legal today but could be reclassified as cannabis under pending federal changes. Bradley, legislative counsel, said the amendment as written does not explicitly direct the Cannabis Control Board to make rulemaking on that specific issue and recommended more detailed statutory language if the legislature intends to delegate that authority to the Board.

The Cannabis Control Board’s James Hubbard told the committee the amendment borrows regulatory tools used in the cannabis program to help smaller hemp operators. "We created a tier called a tier 1 manufacturer, which is, essentially the smallest tier of manufacturing," Hubbard said, noting that tier would target firms with less than $50,000 in annual sales. The amendment would also permit graduated fee waivers for applicants who can demonstrate they were harmed by the war on drugs, at 25% in year one, 50% in year two and 75% in year three before reaching the full fee.

Several members raised concerns about "intermediaries," the concentrates extracted from hemp that are later formulated into consumer products. Bradley said Vermont statutes and regulations currently treat a manufacturing intermediary that contains more than 0.3% THC as not being a hemp product, and that the proposed federal law could fold intermediaries into a single federal framework, creating ambiguity. "Hemp intermediaries are not specifically defined in our statute," Bradley said, and he recommended the committee either narrow statutory language or leave technical standards to the Board through rulemaking.

Members also asked whether processors could sell intermediaries to licensed THC processors. Bradley said current rules allow transfer only between hemp licensees and that allowing broader transfers would require either explicit statutory authority or targeted rule changes. Hubbard emphasized Vermont’s seed‑to‑sale controls and said the Board does not intend to allow delta‑9 THC from hemp to supplant licensed cannabis supply: "We do not allow hemp derived delta‑9 THC to move from the hemp side into the cannabis side," he said.

On equipment sharing, members noted that many processors rely on very expensive, dual‑use machinery and asked whether statute should authorize co‑location or whether the Board should set standards. Bradley called the matter "appropriate for rulemaking" because technical separation, cleaning and testing protocols are difficult to anticipate in statute.

The committee also discussed fees and market fairness. Members raised the equity issue that out‑of‑state producers may not pay the same licensing costs as Vermont growers and that product registration could create a more even playing field. Hubbard warned that licensing and inspecting retailers could add staff costs and that fee revenue historically has not covered all Board operating expenses.

Committee direction: members agreed to have Bradley draft amendment text (including intent language that protects small craft producers and avoids overburdening the industry), and to share the draft with the Government Operations committee for a focused rulemaking review and public testimony. The committee planned a brief review of the draft the next morning and to continue work with the Cannabis Control Board on technical details.

What happens next: Bradley will draft the proposed amendment language and intent section and share it with the committee and GovOps for review; the committee scheduled a short review the following morning to consider the language before further action.