House Appropriations committee reviews S.323, moves hemp oversight to Cannabis Control Board and adds fees and penalties

The House Appropriations Committee on Tuesday heard testimony on S.323, a miscellaneous agriculture bill that would shift hemp oversight from the Agency of Agriculture to the Cannabis Control Board, revise hemp-related fees and penalties, create a working group for confined animal feeding operations (CAFOs), and make several conforming changes to Vermont agricultural law.

Bradley Schoeman of the Office of Legislative Council gave a section-by-section overview, telling the committee the hemp provisions move definitions and oversight authority to the Cannabis Control Board and give the board rulemaking authority over processors, registrations and testing. "This is S.323 ... It's miscellaneous, agricultural subjects," Schoeman said, and summarized changes including a new flat registration-fee schedule and the board’s ability to waive fees for craft processors.

The bill proposes an annual fee schedule of $50 for producers, $500 for processors and $75 for products, replacing the current acreage- and weight-based sliding scale that ranges from about $100 up to $3,000 under certain thresholds. Schoeman also told the committee the bill would permit the Cannabis Control Board to deposit hemp-related fees into the cannabis regulation fund and to set administrative penalties by rule rather than in statute.

James Pepper, chair of the Cannabis Control Board, said the board already has jurisdiction over many hemp-derived products but not consistently over processors, which creates problems for banking, insurance and contract verification. "You gave us our jurisdiction over hemp-derived products," Pepper said, and urged that processors have a clear registration pathway so businesses can prove their legitimacy to banks and insurers.

Committee members pressed Schoeman and other presenters on two technical thresholds the bill tracks: the proposal reflected a federal test based on total milligrams of THC in a final product (0.4 milligrams) as well as the current 0.3% THC-by-weight test. Schoeman warned how those two measures could reclassify some items from hemp to cannabis depending on product size and formulation.

Deb Burnett of the Joint Fiscal Office said the bill’s overall fiscal effects appear modest and highly contingent on federal action. Burnett said that if federal law permitted a larger interstate hemp market, the Cannabis Control Board could see greater fee revenue, estimating potential annual hemp-fee revenue at about $90,000 under an interstate-commerce scenario; otherwise she said revenue would likely be minimal. "This is kind of a best-guess rough estimate at this point," Burnett said.

The bill also creates a CAFO working group to advise the transition of CAFO permitting to the Agency of Natural Resources, with quarterly meetings beginning Nov. 1, 2026, and annual reporting to legislative committees. Stakeholders and lawmakers discussed a previously appropriated sum of $850,000; Rick Nelson said some of that funding paid for mediation and stakeholder work and urged that ANR hire a consultant to standardize inspections. Nelson said stakeholders had already begun joint information-sharing and that consistent inspection standards are a priority.

S.323 includes a provision directing the secretary of natural resources to contract with a third-party consultant to develop inspection standards and sample inspections, but Schoeman said that duty is contingent on a fiscal-year 2027 appropriation. Committee members debated consultant scope and cost; transcript remarks referenced potential sample inspections of 10 sites and a broad range of cost estimates, with figures discussed that ranged from about $50,000 to $300,000. The bill contains no definitive consultant appropriation in its text.

The committee also reviewed an amendment from Ways and Means that clarifies the cannabis special fund language, requires a fiscal-year 2027 report summarizing fees and waivers and comparative analysis, and sunsets the board’s authority to waive craft-processor fees on Jan. 1, 2028, unless the Legislature reauthorizes that flexibility.

No formal motions or votes were taken. Committee Chair opened the floor for follow-up questions and said members can contact presenters individually; the committee recessed and plans to consider a separate cannabis bill at 2:30 p.m. The bill will proceed through additional committee steps and—per presenters—may reach a conference committee if other committees make differing choices.