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S278 would cut outdoor cultivator fees tied to a $105,000 contribution; Cannabis Control Board flags tax-language risks
Summary
CCB testimony said section 10A would halve outdoor cultivator fees if the bill includes a $105,000 contribution to the cannabis regulation fund, but CCB and other agencies flagged confusing drafting in section 25 that could unintentionally benefit illicit operators or misallocate benefits between outdoor and indoor operations.
Cannabis Control Board witnesses told the committee that S278 contains fee and tax changes that could shift regulatory revenue and benefit outdoor cultivators, but they urged lawmakers to tighten draft language to avoid unintended outcomes.
Gabe Gilman said section 10A effectively reduces fees for outdoor cultivators by half, contingent on a $105,000 contribution to the cannabis regulation fund to offset lost operational revenue. He cautioned that the fee cut helps outdoor operators but leaves indoor cultivators unaffected and that stakeholder testimony from industry groups is likely.
On tax drafting, Gilman flagged section 25 as "very confusing" and warned it could be abused by two groups: illicit outdoor cultivators or mixed operators who might improperly claim benefits for indoor operations. He said recommendations from other agencies would be sensible edits and encouraged the Legislature to clarify intent.
The CCB also supported section 12, which would simplify remittance of municipal fees from quarterly to annual payments to ease administrative burden. The committee did not take action on these provisions; fiscal analysis from the Joint Fiscal Office was expected to follow.
