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House Government Operations & Military Affairs reviews S.323 to shift hemp oversight to Cannabis Control Board
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Summary
Lawmakers reviewed S.323, which would move hemp regulation to the Cannabis Control Board, add product registration and fees, and give the board discretion to define craft processors. Small-business hemp owners urged guardrails on rulemaking, clearer rules for intermediaries, and less onerous product-registration requirements.
The House Government Operations & Military Affairs committee on Tuesday examined amendments to S.323 that would move all hemp regulation to the Cannabis Control Board and add product registration, fee schedules and exemptions for small "craft" processors. Representative Richard Nelson (House Agriculture), who helped shepherd the bill, told the panel the change responds to incoming federal rules that could reclassify some hemp products as cannabis.
The bill would require hemp products that contain more than 0.4 milligrams of total THC in the final product to be treated as adult-only and, under the draft, sold only to people 21 and older. Bradley Schoeman, legislative counsel, told the committee the federal standard now referenced is 0.3% THC by weight and a separate 0.4 milligrams total-THC threshold that could make high-volume products fall into the cannabis category if the federal rule takes effect on Nov. 1.
"If the federal law goes into effect as written, those products would be cannabis," Schoeman said, urging the committee to consider whether the legislature wants to add guardrails before delegating broad rulemaking powers to the board. Counsel also described fee increases in the senate version of S.323: a $100 grower fee, a $500 processor fee, and a $75 fee per registered product, and said the Cannabis Control Board could be given discretion to waive or reduce fees for small craft processors.
Sam Bal Vance, owner of Sunset Lake CBD, testified he has grown hemp on his family dairy farm since 2018, employs about 20 people in South Hero and has sold roughly 40,000 hemp and seed-based products nationwide and in Vermont. He told the committee the draft addresses many industry concerns but urged clearer rules on whether hemp-derived intermediaries or distillates can be sold to licensed cannabis firms and proposed a one-time product registration for long-standing, lower-risk products rather than an annual product-registration regime.
"I think putting all of hemp under one agency does make sense," Bal Vance said. "But getting some clarity around the sale of that intermediary to cannabis businesses would be important." He provided potency context to the committee: "Raw THC cannabis distillate is usually 80% THC. The intermediates that I'm working with are usually 2 to 3% THC."
Committee members pressed counsel and Nelson on the scope of the transfer to the CCB and whether the legislature should give more specific direction to the board when it comes to defining "craft processor" and exempting certain categories from registration. A member asked whether all hemp products — regardless of concentration or package weight — would fall under CCB oversight; counsel confirmed that the draft does move all hemp to the board's jurisdiction and that the committee could provide more explicit guardrails if it chose.
The panel did not take a final vote Tuesday. Members asked Bal Vance to share a slide deck he prepared and said they aim to collect recommended changes by Thursday so the committee can finalize its thumbs-up/thumbs-down guidance. The next procedural step will be whether members propose legislative guardrails to narrow the CCB’s discretion or leave broader rulemaking authority with the board.
