Vermont Business Magazine The Senate Finance Committee on Friday passed by a vote of 6-1S241 – legislation to legalize marijuana in Vermont. The Finance Committee set amarijuana excise tax of 25 percent, which excludes medical marijuana. Governor Peter Shumlin has sought a bill (see full bill below) that seeks to legalize what he says many Vermonters are using anyway, while pushing illegal drug dealers out of the marketplace. If the bill passes through the Senate, it faces an uncertain future in the House. Speaker Shap Smith said earlier in the session that he agrees with the governor that a legalization bill should be intended to curb criminal drug dealing rather than an opportunity to increase state tax revenues. However, while he believes a legalization bill will become law, he does not believe it will happen this year. Advocates of legalization are pushing hard this year because next year will bring a new Legislature and a new governor.
“I want to thank the Senate Finance Committee for their work and Senator Tim Ashe for his leadership," Shumlin said Friday. "Today’s vote builds upon the good work started by Senator Sears and the Senate Judiciary Committee. I am encouraged by the deliberate approach the Senate is taking on this issue, using the lessons learned from other states to craft a bill that is well thought out. We can take a smarter approach and I look forward to continuing to work to get a bill that ends the failed era of marijuana prohibition in Vermont.”
In his State of the State Address, the Governor outlined five principles he will insist on in any legislation to legalize marijuana.
- A legal market must keep marijuana and other drugs out of the hands of underage kids. With 83 percent of Vermont youth saying that marijuana is easy or somewhat easy to obtain, the current system doesn’t do this.
- he tax imposed must be low enough to wipe out the black market and get rid of the illegal drug dealers.
- Revenue from legalization must be used to expand addiction prevention programs.
- Law enforcement’s capacity to improve the response to impaired drivers under the influence of marijuana who are already on Vermont’s roads must be strengthened.
- The sale of edibles must be prohibited at first.
On the critical issue of keeping marijuana out of the hands of underage kids, the legislation outlines a number of steps, including:
- No person under the age of 21 will be permitted on the premises of a marijuana establishment.
- Advertising and labeling may not be used to appeal to children or youth.
- Marijuana establishments are prohibited from being located within 1,000 feet of a school or child care center.
- And civil and criminal penalties will be established for furnishing marijuana to those under 21. Current civil and criminal penalties will also remain in place for those using or possessing marijuana underage.
Republican gubernatorial candidateBruceLisman issued the following statement opposing the Senate action.
“Once again our governor and legislature rush to enact public policies without thorough assessments and evaluation of the consequences. Their approach to legislating by experimentation is bad public policy. Enacting legislation to legalize the recreational use of marijuana will encourage broader drug use and threatens to create a host of unintended consequences without delivering any significant benefits.
“Marijuana legalization will be costly to Vermont taxpayers at a time when every available dollar should be sensibly directed to put Vermont back on a strong fiscal footing. This debate is a misguided distraction from the important work of fixing our budget, controlling property taxes, strengthening our schools and providing Vermonters with more health care choices."
RELATED:
Stuart Savel: Legalizing marijuana
Vermont Health Department offers stern report on marijuana
Data Below from the Vermont Cannabis Collaborative
| Assumption Page | ||||||
| Low | Middle | High | ||||
| Estimated consumption in VT | 15.0 | 20.0 | 25.0 | Metric tons | ||
| Lbs. (equivalent) | 33,069.0 | 44,092.0 | 55,115.0 | Lbs. | ||
| Number of overnight tourists to VT | 5,504,000 | 5,504,000 | 5,504,000 | *Tourism tab for data | ||
| Increase in overnight tourism due to cannabis | 10% | 15% | 20% | *User assumptions | ||
| Number of expected overnight tourists | 6,054,400 | 6,329,600 | 6,604,800 | |||
| Estimated % of overnight tourists that purchase cannabis | 7.5% | 12.5% | 17.5% | *2014 MPG Market Demand Study, Implied Prevalence Rates | ||
| Number of tourists purchasing cannabis | 454,080 | 791,200 | 1,155,840 | |||
| Average quantity purchased | 0.008 | 0.008 | 0.016 | Lbs. | *Based on common purchasing amounts, 3.8 average overnight length of stay, and 0.5 grams to 1.5 grams per day | |
| Total purchased | 3,547.5 | 6,181.3 | 18,060.0 | Lbs. | ||
| Metric Tons equivalent | 1.61 | 2.80 | 8.19 | Metric Tons | ||
| VT tourist % of market | 9.7% | 12.3% | 24.7% | |||
| Total consumption in VT | 16.6 | 22.8 | 33.2 | Metric Tons | ||
| Lbs. (equivalent) | 36,616.5 | 50,273.3 | 73,175.00 | Lbs. | ||
| Retail price per Lbs. | $ 5,000 | $ 5,000 | $ 5,000 | *Price can go as high as $6,000 | ||
| Estimate Total Market | $ 183,082,500 | $ 251,366,250 | $ 365,875,000 | |||
BILL S241 DRAFT SENATE FINANCE COMMITTEE
(Draft No. 6.1 – S.241) Page 1 of 26 2/12/2016 - MRC - 01:59 PM
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TO THE HONORABLE SENATE:
The Committee on Finance to which was referred Senate Bill No. 241 2 entitled “An act relating to personal possession and cultivation of cannabis and 3 the regulation of commercial cannabis establishments” respectfully reports that 4 it has considered the same and recommends that the bill be amended as 5 follows: 6
First: By striking out Sec. 2 in its entirety and inserting in lieu thereof the 7 following: 8
Sec. 2. MARIJUANA YOUTH EDUCATION AND PREVENTION 9
(a)(1) Relying on lessons learned from tobacco and alcohol prevention 10 efforts, the Department of Health, in collaboration with the Department of 11 Public Safety, the Agency of Education, and the Governor’s Highway Safety 12 Program, shall develop and administer an education and prevention program 13 focused on use of marijuana by youth under 25 years of age. In so doing, the 14 Department shall consider at least the following: 15
(A) Community- and school-based youth and family-focused 16 prevention initiatives that strive to: 17
(i) expand the number of school-based grants for substance abuse 18 services to enable each Supervisory Union to develop and implement a plan for 19 comprehensive substance abuse prevention education in a flexible manner that 20 ensures the needs of individual communities are addressed; 21 (Draft No. 6.1 – S.241) Page 2 of 26 2/12/2016 - MRC - 01:59 PM
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(ii) improve the Screening, Brief Intervention and Referral to 1 Treatment (SBIRT) practice model for professionals serving youth in schools 2 and other settings; and 3
(iii) expand family education programs. 4
(B) An informational and counter-marketing campaign using a public 5 website, printed materials, mass and social media, and advertisements for the 6 purpose of preventing underage marijuana use. 7
(C) Education for parents and health care providers to encourage 8 screening for substance use disorders and other related risks. 9
(D) Expansion of the use of SBIRT among the State’s pediatric 10 practices and school-based health centers. 11
(E) Strategies specific to youth who have been identified by the 12 Youth Risk Behavior Survey as having an increased risk of substance abuse. 13
(2) On or before March 15, 2017, the Department shall adopt rules to 14 implement the education and prevention program described in subsection (a) of 15 this section and implement the program on or before September 15, 2017. 16
(b) The Department shall include questions in its biannual Youth Risk 17 Behavior Survey to monitor the use of marijuana by youth in Vermont and to 18 understand the source of marijuana used by this population. 19 (Draft No. 6.1 – S.241) Page 3 of 26 2/12/2016 - MRC - 01:59 PM
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(c) Any data collected by the Department on the use of marijuana by youth 1 shall be maintained and organized in a manner that enables the pursuit of 2 future longitudinal studies. 3
Second: By adding a Sec. 10a to read as follows: 4
Sec. 10a. 18 V.S.A. § 4230g is added to read: 5
§ 4230g. SALE OR FURNISHING MARIJUANA TO A PERSON UNDER 6
21 YEARS OF AGE; CIVIL ACTION FOR DAMAGES 7
(a) A spouse, child, guardian, employer, or other person who is injured in 8 person, property, or means of support by a person under 21 years of age who is 9 impaired by marijuana, or in consequence of the impairment by marijuana of 10 any person under 21 years of age, shall have a right of action in his or her own 11 name, jointly or severally, against any person or persons who have caused in 12 whole or in part such impairment by selling or furnishing marijuana to a person 13 under 21 years of age. 14
(b) Upon the death of either party, the action and right of action shall 15 survive to or against the party’s executor or administrator. The party injured or 16 his or her legal representatives may bring either a joint action against the 17 impaired person under 21 years of age and the person or persons who sold or 18 furnished the marijuana, or a separate action against either or any of them. 19
(c) An action to recover for damages under this section shall be 20 commenced within two years after the cause of action accrues, and not after. 21 (Draft No. 6.1 – S.241) Page 4 of 26 2/12/2016 - MRC - 01:59 PM
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(d) In an action brought under this section, evidence of responsible actions 1 taken or not taken is admissible if otherwise relevant. Responsible actions may 2 include a marijuana establishment’s instruction to employees as to laws 3 governing the sale of marijuana to adults 21 years of age or older and 4 procedures for verification of age of customers. 5
(e) A defendant in an action brought under this section has a right of 6 contribution from any other responsible person or persons, which may be 7 enforced in a separate action brought for that purpose. 8
(f)(1) Except as provided in subdivision (2) of this subsection, nothing in 9 this section shall create a statutory cause of action against a social host for 10 furnishing marijuana to any person without compensation or profit. However, 11 this subdivision shall not be construed to limit or otherwise affect the liability 12 of a social host for negligence at common law. 13
(2) A social host who knowingly furnishes marijuana to a person under 14 21 years of age may be held liable under this section if the social host knew, or 15 a reasonable person in the same circumstances would have known, that the 16 person who received the marijuana was under 21 years of age. 17
(3) As used in this subsection, “social host” means a person who is not 18 the holder of a marijuana establishment license and is not required under 19 chapter 87 of this title to hold a marijuana establishment license. 20 (Draft No. 6.1 – S.241) Page 5 of 26 2/12/2016 - MRC - 01:59 PM
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Third: In Sec. 12, 18 V.S.A. § 4505(a)(2), in the second sentence, after the 1 words “municipal permits” by adding under this subsection (a) 2
Fourth: In Sec. 12, after “Subchapter 2.” by striking out the words 3 “Department of Public Safety” and inserting in lieu thereof the word 4 Administration 5
Fifth: In Sec. 12, 18 V.S.A. § 4511, before the words “For the purpose of” 6 by adding (a) and by adding subsections (b) and (c) to read as follows: 7
(b)(1) For the purpose of regulating the cultivation and testing of marijuana 8 in accordance with this chapter, the Agency of Agriculture, Food and Markets 9 shall have the following authority and duties: 10
(A) rulemaking in accordance with this chapter and 3 V.S.A. 11 chapter 25; 12
(B) the inspection of licensed marijuana cultivators and testing of 13 marijuana; and 14
(C) the prevention of contaminated or adulterated marijuana from 15 being offered for sale. 16
(2) The authority and duties of the Agency shall be in addition to, and 17 not a substitute for, the authority and duties of the Department. 18
(c)(1) There is established a Marijuana Advisory Board within the 19 Department for the purpose of advising the Department and other 20 administrative agencies and departments regarding policy for the 21 (Draft No. 6.1 – S.241) Page 6 of 26 2/12/2016 - MRC - 01:59 PM
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implementation and operation of this chapter. The Board shall be composed of 1 the following members: 2
(A) the Commissioner of Public Safety or designee; 3
(B) the Secretary of Agriculture, Food and Markets or designee; 4
(C) the Commissioner of Health or designee; 5
(D) the Commissioner of Taxes or designee; and 6
(E) a member of local law enforcement appointed by the Governor. 7
(2) The Department shall endeavor to notify and consult with the Board 8 prior to the adoption of any significant policy decision. 9
(3) The Secretary of Administration shall convene the first meeting of 10 the Board on or before June 1, 2016 and shall attend Board meetings. 11
Sixth: In Sec. 12, 18 V.S.A. § 4512 by striking out “(1)–(3)” and inserting 12 in lieu thereof (1)–(4) 13
Seventh: In Sec. 12, 18 V.S.A. § 4512(1)(B) by striking out “principals” 14 and inserting in lieu thereof applicants 15
Eighth: In Sec. 12, 18 V.S.A. § 4512 by striking out subdivision (1)(K) in 16 its entirety and by inserting in lieu thereof the following: 17
(K) procedures for seed to sale traceability of marijuana, including 18 any requirements for tracking software; 19 (Draft No. 6.1 – S.241) Page 7 of 26 2/12/2016 - MRC - 01:59 PM
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Ninth: In Sec. 12, 18 V.S.A. § 4512 by striking out subdivisions 1 (2)(A)–(C) in their entirety and by relettering the remaining subdivisions to be 2 alphabetically correct 3
Tenth: In Sec. 12, 18 V.S.A. § 4512 by striking out subdivisions (4)(B) and 4 (C) in their entirety and in subdivision (4)(A) after “samples;” by adding the 5 word and, and by relettering the remaining subdivision to be alphabetically 6 correct 7
Eleventh: In Sec. 12, 18 V.S.A. § 4512 in the first sentence before the word 8 “The Department” by adding (a) and by adding a subsection (b) to read as 9 follows: 10
(b) In addition to the rules adopted by the Department pursuant to 11 subsection (a) of this section, the Agency of Agriculture, Food and Markets 12 shall adopt rules regarding the cultivation and testing of marijuana regulated 13 pursuant to this chapter as follows: 14
(1) restrictions on the use by cultivators of pesticides that are injurious 15 to human health; 16
(2) standards for both the indoor and outdoor cultivation of marijuana, 17 including environmental protection requirements; 18
(3) procedures and standards for testing marijuana for contaminants and 19 potency and for quality assurance and control; 20
(4) reporting requirements of a testing laboratory; and 21 (Draft No. 6.1 – S.241) Page 8 of 26 2/12/2016 - MRC - 01:59 PM
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(5) inspection requirements for cultivators and testing laboratories. 1
Twelfth: In Sec. 12, 18 V.S.A. § 4513(b)(2) by striking out “January 1, 2 2018” and inserting in lieu thereof January 2, 2018 3
Thirteenth: In Sec. 12, by striking out 18 V.S.A. § 4513 in its entirety and 4 inserting in lieu thereof the following: 5
§ 4513. IMPLEMENTATION 6
(a)(1) On or before April 15, 2017, the Department shall begin accepting 7 applications for cultivator licenses and testing laboratory licenses. The initial 8 application period shall remain open for 30 days. The Department may reopen 9 the application process for any period of time at its discretion. 10
(2) On or before June 15, 2017, the Department shall begin issuing 11 cultivator licenses and testing laboratory licenses to qualified applicants. 12
(b)(1) On or before May 15, 2017, the Department shall begin accepting 13 applications for retail licenses. The initial application period shall remain open 14 for 30 days. The Department may reopen the application process for any 15 period of time at its discretion. 16
(2) On or before September 15, 2017, the Department shall begin 17 issuing retailer licenses to qualified applicants. A license shall not permit a 18 licensee to open the store to the public or sell marijuana to the public prior to 19 January 2, 2018. 20 (Draft No. 6.1 – S.241) Page 9 of 26 2/12/2016 - MRC - 01:59 PM
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(c)(1) Prior to July 1, 2018, provided applicants meet the requirements of 1 this chapter, the Department shall issue: 2
(A) a maximum of 10 cultivator licenses that permit a cultivation 3 space of not more than 5,000 square feet; 4
(B) a maximum of five cultivator licenses that permit a cultivation 5 space of 5,001–10,000 square feet; 6
(C) a maximum of five testing laboratory licenses; and 7
(D) a maximum of 15 retailer licenses. 8
(2) On or after July 1, 2018 and before July 1, 2019, provided applicants 9 meet the requirements of this chapter and in addition to the licenses authorized 10 in subdivision (1) of this subsection, the Department shall issue: 11
(A) a maximum of 10 cultivator licenses that permit a cultivation 12 space of not more than 5,000 square feet for a total of 20 such licenses; 13
(B) a maximum of five cultivator licenses that permit a cultivation 14 space of 5,001–10,000 square feet for a total of 10 such licenses; 15
(C) a maximum of five testing laboratory licenses for a total of 10 16 such licenses; and 17
(C) a maximum of 15 retailer licenses for a total of 30 such licenses. 18
(3) On or after July 1, 2019, the limitations in subdivision (1) of this 19 subsection shall not apply and the Department shall use its discretion to issue 20 licenses in a number and size for the purpose of competing with and 21 (Draft No. 6.1 – S.241) Page 10 of 26 2/12/2016 - MRC - 01:59 PM
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undercutting the illegal market based on available data and recommendations 1 of the Marijuana Program Review Commission. A cultivator licensed under 2 the limitations of subdivisions (1) or (2) of this subsection may apply to the 3 Department to modify its license to expand its cultivation space. 4
Fourteenth: In Sec. 12, 18 V.S.A. § 4522(c)(1) by inserting a subdivision 5 (G) to read as follows: 6
(G) how the applicant will meet its operation’s need for energy 7 services at the lowest present value life-cycle cost, including environmental 8 and economic costs, through a strategy combining investments and 9 expenditures on energy efficiency and energy supply; 10
and by relettering the remaining subdivisions to be alphabetically correct 11
Fifteenth: In Sec. 12, 18 V.S.A. § 4524(e) after the words “drug-related” by 12 adding the word criminal 13
Sixteenth: In Sec. 12, 18 V.S.A. § 4525, in subsection (d), after the word 14 “Department” by adding the words and Agency of Agriculture, Food and 15 Markets and by adding a subsection (f) to read as follows: 16
(f)(1) Only unadulterated marijuana shall be offered for sale. If, upon 17 inspection, the Agency of Agriculture, Food and Markets finds any violative 18 pesticide residue or other contaminants of concern, the Agency shall order the 19 marijuana, either individually or in blocks, to be: 20
(A) put on stop-sale; 21 (Draft No. 6.1 – S.241) Page 11 of 26 2/12/2016 - MRC - 01:59 PM
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(B) treated in a particular manner; or 1
(C) destroyed according to the Agency’s instructions. 2
(2) Marijuana ordered destroyed or placed on stop-sale shall be clearly 3 separable from salable marijuana. Any order shall be confirmed in writing 4 within seven days. The order shall include the reason for action, a description 5 of the marijuana affected, and any recommended treatment. 6
(3) A person may appeal an order issued pursuant to this section within 7 15 days of receiving the order. The appeal shall be made in writing to the 8 Secretary of Agriculture, Food and Markets and shall clearly identify the 9 marijuana affected and the basis for the appeal. 10
Seventeenth: In Sec. 12, 18 V.S.A. § 4526, in subdivision (b)(1)(A), by 11 striking out “one ounce” inserting in lieu thereof one-half ounce and in 12 subsection (c) by striking out “may” and inserting in lieu thereof shall and after 13 “marijuana” by adding , and after “plant” by adding , and shall not package 14 marijuana with other items, such as paraphernalia, for sale to customers 15
Eighteenth: In Sec. 12, by striking out 18 V.S.A. § 4528 in its entirety and 16 inserting in lieu thereof the following: 17
§ 4528. FEES 18
(a) The Department of Public Safety shall charge and collect initial license 19 application fees and annual license renewal fees for each type of marijuana 20 (Draft No. 6.1 – S.241) Page 12 of 26 2/12/2016 - MRC - 01:59 PM
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license under this chapter. Fees shall be due and payable at the time of license 1 application or renewal. 2
(b)(1) The nonrefundable fee accompanying an application for a cultivator 3 license pursuant to section 4525 of this chapter shall be determined as follows: 4
(A) For a cultivator license that permits a cultivation space of not 5 more than 5,000 square feet, the application fee shall be $15,000.00. 6
(B) For a cultivator license that permits a cultivation space of 7 5,001–10,000 square feet, the application fee shall be $25,000.00. 8
(2) The nonrefundable fee accompanying an application for a retailer 9 license pursuant to section 4526 of this chapter shall be $15,000.00. 10
(3) The nonrefundable fee accompanying an application for a marijuana 11 testing laboratory license pursuant to section 4527 of this chapter shall be 12 $500.00. 13
(4) If person submits a qualifying application for a marijuana 14 establishment license during an open application, pays the nonrefundable 15 application fee, but is not selected to receive a license due to the limited 16 number of licenses available, the person may reapply, based on availability, for 17 such a license within two years by resubmitting the application with any 18 necessary updated information, and shall be charged a fee that is: 19 (Draft No. 6.1 – S.241) Page 13 of 26 2/12/2016 - MRC - 01:59 PM
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(A) fifty percent of the application fees set forth in subdivision 1 (1)–(3) of this subsection if the original application was submitted prior to 2 July 1, 2018; or 3
(B) twenty-five percent of the application fees set forth in 4 subdivisions (1)–(3) of this subsection if the original application was submitted 5 on or after July 1, 2018 and before July 1, 2019. 6
(c)(1) The initial annual license fee and subsequent annual renewal fee for 7 a cultivator license pursuant to section 4525 of this chapter shall be shall be 8 determined as follows: 9
(A) For a cultivator license that permits a cultivation space of not 10 more than 5,000 square feet, the initial annual license and subsequent renewal 11 fee shall be $15,000.00. 12
(B) For a cultivator license that permits a cultivation space of 13 5,001–10,000 square feet, the initial annual license and subsequent renewal fee 14 shall be $25,000.00. 15
(2) The initial annual license fee and subsequent annual renewal fee for 16 a retailer license pursuant to section 4526 of this chapter shall be $15,000.00. 17
(3) The initial annual license fee and subsequent annual renewal fee for 18 a marijuana testing laboratory license pursuant to section 4527 of this chapter 19 shall be $2,500.00. 20
(d) The following administrative fees shall apply: 21 (Draft No. 6.1 – S.241) Page 14 of 26 2/12/2016 - MRC - 01:59 PM
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(1) Change of corporate structure fee (per person) shall be $1,000.00. 1
(2) Change of name fee shall be $1,000.00. 2
(3) Change of location fee shall be $1,000.00. 3
(4) Modification of license premises fee shall be $250.00. 4
(5) Addition of financier fee shall be $250.00. 5
(6) Duplicate license fee shall be $100.00. 6
Nineteenth: In Sec. 12, 18 V.S.A. chapter 87, by striking out subchapter 4 7 in its entirety and by redesignating subchapter 5 to be subchapter 4 8
Twentieth: In Sec. 12, 18 V.S.A. § 4546(b)(5) after the word “public” by 9 inserting , one of whom shall have expertise in public health, 10
Twenty-first: In Sec. 12, 18 V.S.A. § 4547(a) in subdivision (7) by striking 11 out the word “and” and in subdivision (8) by striking out “.” and inserting in 12 lieu thereof ; and by striking out subdivision (10) in its entirety and inserting in 13 lieu thereof the following: 14
(10) monitor the extent to which marijuana is accessed through both the 15 legal and illegal market by persons under 21 years of age; 16
(11) identify strategies for preventing youth from using marijuana; 17
(12) identify academic and scientific research, including longitudinal 18 research questions, that when completed may assist policymakers in 19 developing marijuana policy in accordance with this act; 20 (Draft No. 6.1 – S.241) Page 15 of 26 2/12/2016 - MRC - 01:59 PM
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(13) consider whether to create a local revenue stream which may 1 include a local option excise tax on marijuana sales or municipally assessed 2 fees; and 3
(14) report any recommendations to the General Assembly and the 4 Governor, as needed. 5
Twenty-second: By adding a Sec. 12a to read as follows: 6
Sec. 12a. 32 V.S.A. chapter 207 is added to read: 7
CHAPTER 207. MARIJUANA TAXES 8
§ 7901. TAX IMPOSED 9
(a) There is imposed a marijuana excise tax equal to 25 percent of the sales 10 price, as that term is defined in subdivision 9701(4), on each retail sale of 11 marijuana in this State. The tax imposed by this section shall be paid by the 12 buyer to the retailer. Each retailer shall collect from the buyer the full amount 13 of the tax payable on each taxable sale. 14
(b) The tax imposed by this section is separate from the general sales and 15 use tax imposed by chapter 233 of this title. The tax imposed under this 16 section shall be separately itemized from any State and local retail sales tax on 17 the sales receipt provided to the buyer. 18
(c) The following sales shall be exempt from the tax imposed under this 19 section: 20 (Draft No. 6.1 – S.241) Page 16 of 26 2/12/2016 - MRC - 01:59 PM
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(1) sales under any circumstances in which the State is without power to 1 impose the tax; and 2
(2) sales made by any dispensary, provided the marijuana will be 3 provided only to registered qualifying patients directly or through their 4 registered caregivers. 5
§ 7902. LIABILITY FOR TAX AND PENALTIES 6
(a) Any tax collected under this chapter shall be deemed to be held by the 7 retailer in trust for the State of Vermont. Any tax collected under this chapter 8 shall be accounted for separately so as to clearly indicate the amount of tax 9 collected, and that the tax receipts are the property of the State of Vermont. 10
(b) Every retailer required to collect the tax imposed by this chapter shall 11 be personally and individually liable for the amount of tax together with such 12 interest and penalty as has accrued under this title. If the retailer is a 13 corporation or other entity, the personal liability shall extend to any officer or 14 agent of the corporation or entity who as an officer or agent of the same has the 15 authority to collect the tax and transmit it to the Commissioner of Taxes as 16 required in this chapter. 17
(c) A retailer shall have the same rights in collecting the tax from his or her 18 purchaser or regarding nonpayment of the tax by the purchaser as if the tax 19 were a part of the purchase price of the marijuana and payable at the same 20 time; provided, however, if the retailer required to collect the tax has failed to 21 (Draft No. 6.1 – S.241) Page 17 of 26 2/12/2016 - MRC - 01:59 PM
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remit any portion of the tax to the Commissioner of Taxes, the Commissioner 1 of Taxes shall be notified of any action or proceeding brought by the retailer to 2 collect the tax and shall have the right to intervene in such action or 3 proceeding. 4
(d) A retailer required to collect the tax may also refund or credit to the 5 purchaser any tax erroneously, illegally, or unconstitutionally collected. No 6 cause of action that may exist under State law shall accrue against the retailer 7 for the tax collected unless the purchaser has provided written notice to a 8 retailer, and the retailer has had 60 days to respond. 9
(e) To the extent not inconsistent with this chapter, the provisions for the 10 assessment, collection, enforcement, and appeals of the sales and use taxes in 11 chapter 233 of this title shall apply to the tax imposed by this chapter. 12
§ 7903. BUNDLED TRANSACTIONS 13
(a) Except as provided in subsection (b) of this section, a retail sale of a 14 bundled transaction that includes marijuana is subject to the tax imposed by 15 this chapter on the entire selling price of the bundled transaction. 16
(b) If the selling price is attributable to products that are taxable and 17 products that are not taxable under this chapter, the portion of the price 18 attributable to the nontaxable products are subject to the tax imposed by this 19 chapter unless the retailer can identify by reasonable and verifiable standards 20 (Draft No. 6.1 – S.241) Page 18 of 26 2/12/2016 - MRC - 01:59 PM
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the portion that is not subject to tax from its books and records that are kept in 1 the regular course of business. 2
(c) As used in this section, “bundled transaction” means: 3
(1) the retail sale of two or more products where the products are 4 otherwise distinct and identifiable, are sold for one nonitemized price, and at 5 least one of the products includes marijuana subject to the tax under this 6 chapter; or 7
(2) marijuana provided free of charge with the required purchase of 8 another product. 9
§ 7904. RETURNS 10
(a) Any retailer required to collect the tax imposed by this chapter shall, on 11 or before the 15th day of every month, return to the Department of Taxes, 12 under oath of a person with legal authority to bind the retailer, a statement 13 containing its name and place of business, the amount of marijuana sales 14 subject to the excise tax imposed by this subchapter sold in the preceding 15 month, and any other information required by the Department of Taxes, along 16 with the tax due. 17
(b) Every retailer shall maintain, for not less than three years, accurate 18 records showing all transactions subject to tax liability under this chapter. 19 These records are subject to inspection by the Department of Taxes at all 20 reasonable times during normal business hours. 21 (Draft No. 6.1 – S.241) Page 19 of 26 2/12/2016 - MRC - 01:59 PM
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§ 7905. LICENSES 1
(a) Every retailer required to collect the tax imposed by this chapter shall 2 apply for a marijuana excise tax license in the manner prescribed by the 3 Commissioner of Taxes. The Commissioner shall issue, without charge, to 4 each registrant a license empowering him or her to collect the marijuana excise 5 tax. Each license shall state the place of business to which it is applicable. 6 The license shall be prominently displayed in the place of business of the 7 registrant. The licenses shall be nonassignable and nontransferable and shall 8 be surrendered to the Commissioner immediately upon the registrant’s ceasing 9 to do business at the place named. A license to collect marijuana excise tax 10 shall be in addition to the licenses required by sections 9271 (meals and rooms 11 tax) and 9707 (sales and use tax) of this title and any license required by the 12 Department of Public Safety. 13
(b) The Department of Public Safety may require the Commissioner of 14 Taxes to suspend or revoke the tax license of any person for failure to comply 15 with any provision of this chapter. 16
Twenty-third: By adding a Sec. 12b to read as follows: 17
Sec. 12b. 32 V.S.A. § 5811 is amended to read: 18
§ 5811. DEFINITIONS 19
The following definitions shall apply throughout this chapter unless the 20 context requires otherwise: 21 (Draft No. 6.1 – S.241) Page 20 of 26 2/12/2016 - MRC - 01:59 PM
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* * * 1
(18) “Vermont net income” means, for any taxable year and for any 2 corporate taxpayer: 3
(A) the taxable income of the taxpayer for that taxable year under the 4 laws of the United States, without regard to 26 U.S.C. § 168(k) of the Internal 5 Revenue Code, and excluding income which under the laws of the United 6 States is exempt from taxation by the states: 7
(i) increased by: 8
(I) the amount of any deduction for State and local taxes on or 9 measured by income, franchise taxes measured by net income, franchise taxes 10 for the privilege of doing business and capital stock taxes; and 11
(II) to the extent such income is exempted from taxation under 12 the laws of the United States by the amount received by the taxpayer on and 13 after January 1, 1986 as interest income from State and local obligations, other 14 than obligations of Vermont and its political subdivisions, and any dividends 15 or other distributions from any fund to the extent such dividend or distribution 16 is attributable to such Vermont State or local obligations; 17
(III) the amount of any deduction for a federal net operating 18 loss; and 19
(ii) decreased by: 20 (Draft No. 6.1 – S.241) Page 21 of 26 2/12/2016 - MRC - 01:59 PM
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(I) the “gross-up of dividends” required by the federal Internal 1 Revenue Code to be taken into taxable income in connection with the 2 taxpayer’s election of the foreign tax credit; and 3
(II) the amount of income which results from the required 4 reduction in salaries and wages expense for corporations claiming the Targeted 5 Job or WIN credits; and 6
(III) any federal deduction that the taxpayer would have been 7 allowed for the cultivation, testing, processing, or sale of marijuana, as 8 authorized under 18 V.S.A. chapter 86 or 87, but for 26 U.S.C. § 280E. 9
* * * 10
(21) “Taxable income” means federal taxable income determined 11 without regard to 26 U.S.C. § 168(k) and: 12
(A) Increased by the following items of income (to the extent such 13 income is excluded from federal adjusted gross income): 14
(i) interest income from non-Vermont state and local obligations; 15
(ii) dividends or other distributions from any fund to the extent 16 they are attributable to non-Vermont state or local obligations; 17
(iii) the amount of State and local income taxes deducted from 18 federal adjusted gross income for the taxable year, but in no case in an amount 19 that will reduce total itemized deductions below the standard deduction 20 allowable to the taxpayer; and 21 (Draft No. 6.1 – S.241) Page 22 of 26 2/12/2016 - MRC - 01:59 PM
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(iv) the amount of total itemized deductions, other than deductions 1 for State and local income taxes, medical and dental expenses, or charitable 2 contributions, deducted from federal adjusted gross income for the taxable 3 year, that is in excess of two and one-half times the standard deduction 4 allowable to the taxpayer; and 5
(B) Decreased by the following items of income (to the extent such 6 income is included in federal adjusted gross income): 7
(i) income from United States government obligations; 8
(ii) with respect to adjusted net capital gain income as defined in 9 26 U.S.C. § 1(h) reduced by the total amount of any qualified dividend 10 income: either the first $5,000.00 of such adjusted net capital gain income; or 11 40 percent of adjusted net capital gain income from the sale of assets held by 12 the taxpayer for more than three years, except not adjusted net capital gain 13 income from: 14
(I) the sale of any real estate or portion of real estate used by 15 the taxpayer as a primary or nonprimary residence; or 16
(II) the sale of depreciable personal property other than farm 17 property and standing timber; or stocks or bonds publicly traded or traded on 18 an exchange, or any other financial instruments; regardless of whether sold by 19 an individual or business; 20 (Draft No. 6.1 – S.241) Page 23 of 26 2/12/2016 - MRC - 01:59 PM
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and provided that the total amount of decrease under this 1 subdivision (21)(B)(ii) shall not exceed 40 percent of federal taxable 2 income; and 3
(iii) recapture of State and local income tax deductions not taken 4 against Vermont income tax; and 5
(iv) any federal deduction that the taxpayer would have been 6 allowed for the cultivation, testing, processing, or sale of marijuana, as 7 authorized under 18 V.S.A. chapter 86 or 87, but for 26 U.S.C. § 280E. 8
* * * 9
Twenty-fourth: By adding a Sec. 12c to read as follows: 10
Sec. 12c. 32 V.S.A. § 9741(51) is added to read: 11
(51) Marijuana sold by a dispensary as authorized under 18 V.S.A. 12 chapter 86 or by a retailer as authorized under 18 V.S.A. chapter 87. 13
Twenty-fifth: By adding a Sec. 18a to read as follows: 14
Sec. 18a. 18 V.S.A. § 4474e is amended to read: 15
§ 4474e. DISPENSARIES; CONDITIONS OF OPERATION 16
* * * 17
(b)(1) A dispensary shall be operated on a nonprofit basis for the mutual 18 benefit of its patients but need not be recognized as a tax-exempt organization 19 by the Internal Revenue Service. 20 (Draft No. 6.1 – S.241) Page 24 of 26 2/12/2016 - MRC - 01:59 PM
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(2) A dispensary shall have a sliding-scale fee system that takes into 1 account a registered patient’s ability to pay. 2
* * * 3
(o) Notwithstanding any provision of law or any provision of its articles or 4 bylaws to the contrary, a dispensary formed as a nonprofit may convert to any 5 other type of business entity authorized by the laws of this State by: 6
(1) a majority vote of the directors and a majority vote of the members, 7 if any; and 8
(2) filing with the Secretary of State a statement that the dispensary is 9 converting to another type of entity and the documents required by law to form 10 the type of entity. 11
Twenty-sixth: In Sec. 19, 18 V.S.A. § 4474g, after “* * *” by adding the 12 following: 13
(e) The Department of Public Safety shall not issue a registry identification 14 card to any applicant who has been convicted of a drug-related criminal 15 offense or a violent felony or who has a pending charge for such an offense. 16 For purposes of As used in this subchapter, “violent felony” means a listed 17 crime as defined in 13 V.S.A. § 5301(7) or an offense involving sexual 18 exploitation of children in violation of 13 V.S.A. chapter 64. 19
* * * 20 (Draft No. 6.1 – S.241) Page 25 of 26 2/12/2016 - MRC - 01:59 PM
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Twenty-seventh: By adding a Sec. 29a to read as follows: 1
Sec. 29a. 6 V.S.A. chapter 5 is amended to read: 2
CHAPTER 5. CENTRAL TESTING LABORATORY 3
§ 121. CREATION AND PURPOSE 4
There is created within the Agency of Agriculture, Food and Markets a 5 central testing laboratory for the purpose of providing agricultural, and 6 environmental, and other necessary testing services. 7
§ 122. FEES 8
Notwithstanding 32 V.S.A. § 603, the Agency shall establish fees for 9 providing agricultural, and environmental, and other necessary testing services 10 at the request of private individuals and State agencies. The fees shall be 11 reasonably related to the cost of providing the services. Fees collected under 12 this chapter shall be credited to a special fund which shall be established and 13 managed pursuant to 32 V.S.A. chapter 7, subchapter 5, and which shall be 14 available to the Agency to offset the cost of providing the services. 15
§ 123. REGULATED DRUGS 16
(a) Except as provided in subsection (b) of this section, the provisions of 17 18 V.S.A. chapter 84 shall not apply to the Secretary or designee in the 18 otherwise lawful performance of his or her official duties requiring the 19 possession or control of regulated drugs.
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(b) The central testing laboratory shall obtain a certificate of approval from 1 the Department of Health pursuant to 18 V.S.A. § 4207. 2
(c) As used in this section, “regulated drug” shall have the same meaning 3 as in 18 V.S.A. § 4201. 4
Twenty-eighth: By striking out Sec. 30 (effective dates) in its entirety and 5 inserting in lieu thereof the following: 6
Sec. 31. EFFECTIVE DATES 7
(a) This section and Secs. 1, 2, 12, 12a, 18a, and 29a shall take effect on 8 passage. 9
(b) Secs. 7, 10a, 11, 13 through 18, and 19 through 29 shall take effect on 10 July 1, 2016. 11
(c) Sec. 12b shall take effect January 1, 2017 and shall apply to taxable 12 year 2017 and after. 13
(d) Secs. 6, 8, 9, 10, 12c, and 30 shall take effect on January 2, 2018.