 Good afternoon, folks. This is a continuation of the House Appropriations Committee on a beautiful Friday afternoon February. May 14th and we are convened here to hear testimony on S-25. Thank you very much colleagues for joining us. Rep Ganon, Rep Beck and Miss Childs is here to help us understand the bill as well as Mr. Campbell, although I have been told it's casual Friday so everybody's going by their first name instead. So with that, John, what we generally look forward to, high level overview and then take us down to the appropriations sections and we'll try to focus on that which is within our jurisdiction. So John, we'll turn to you. Thank you, Madam Chair. Representative John Ganon from Wilmington for the record. I will go through the bill very quickly. Section 1 deals with towns opting into retail sales. The change we made there was the Senate put in a date certain by which towns would have had a vote and if they did not vote they would have been deemed to have agreed to have cannabis retail. We struck that out of the language and retained the house position that was in Act 164. The Cannabis Control Advisory Committee and this is something appropriations will be interested in is we did add two positions to the advisory committee and one of them is the chair of the Cannabis for Symptom Relief Oversight Committee or designee and the second position is one member appointed by the Vermont Cannabis Trade Association. The Vermont Cannabis Trade Association is the trade association of medical dispensaries. So there's two additional positions on the advisory committee of the Cannabis Control Board. And we did modify another position, but this was not a new position. We had one member with expertise in substance misuse prevention. We just changed that to the chair of the substance misuse prevention oversight and advisory council or designee. Then, you know, we, in section four and four eight talks about the reporting obligations of the Cannabis Control Board. We went into the timing of when the Cannabis Control Board was appointed. They were supposed to be confirmed by the Senate by January 15 of this year. They were not. They weren't appointed appointed until March of 2021. So there had to be changes in the way that their recommendations which were on April 1 had to go so they had to recommend the fees for the Cannabis Control Board which means all the licensing fees, and things like that. So there were modifications there, but I'll let, when we get to, when you want more detail on that, I think representative Beck is probably the best person to give you detail because that was an amendment and house ways of means to how we go about setting those fees. Then, and other areas that will be important to you in section four B we just had two additional reporting requirements. I won't go into detail about that, but then section four C is an important section for appropriation because it creates two new positions, a general council position and administrative assistant position. It's my understanding from the testimony of the chair of the Cannabis Control Board is that they have the funds that were appropriated to them already that can cover these positions. Then sections five through nine deal with advertising. As you may recall when the conference committee met the compromise we reach is that the Cannabis Control Board and the AG's office would come back to the General Assembly with a recommendation on April 1. With respect to advertising. Again, because of the delay in the Cannabis Control Board being set up that couldn't happen. So what the Senate proposed and what we in house gov ops agreed to is to put back in the language on advertising that was in the bill as it left the house government operations and that's biennium. So this is, you know, I won't go into deep detail about that but you know it does allow advertising, whereas, when the before the conference committee, you know, the bill left the house with a ban on advertising. You know, the Attorney General's office testified about the constitutionality of what is in the bill now and they support what's in the bill they do not support a absolute ban on advertising. All the sections through section nine. Section 10 is just it amends section eight of act 164 and requires that small cultivated that cannabis dispensaries, those are the, the medical dispensaries when they get an integrated license have to have 25% of flower come from small cultivators. That was just to reach out to small cultivators. Then we get into section 11 through 14 of the bill which deal with the social equity section of the bill. And this is an important section for appropriations. What the social equity program is, it sets up a social equity grant and loan program that will be administered by a CCD. It will be funded through two sources in a House Ways and Means Amendment $50,000 from each integrated licensee, plus an appropriation of $500,000. That will be used primarily for grants and loans to social equity applicants, which will be defined by the Cannabis Control Board, ACCD, the executive director of the racial equity panel, and the advisory board to the Cannabis Control Board. Then let's go on. Section 15 just talks about the transfer of the medical cannabis registry, which is the dispensaries from under the agency or yeah, the Department of Public Safety to the Cannabis Control Board. Originally in Act 164, they were supposed to move over on March of 2022. The Senate moved that up to January 1, 2021. In testimony from the chair of the Cannabis Control Board, it was recommended that we move that back to March 1 of 2022, and that's what we did in that section. And that also applies to section 16. And then finally, the effective dates are in section 20. So that is a quick run through the bill. And I think there's one other section I should talk to you about. Section 17, which deals with a ride training. And so to give you a little background on this, the Senate proposed getting a report on the costs of a ride training. We talked to the Vermont Criminal Justice Council about this issue. And it, what we learned is that it would cost somewhere between 75,000 and 100,000 to get every law enforcement officer trained by December 31, 2021. What you saw, you see in the bill is that we move that data out to 2025 because they said they could get everybody trained at no cost by 2025. But we are still working with them with respect to some information. For example, right now, anybody who's been is a level three certified officer as of 2015 has to get a ride training within 36 months of leaving the police academy. So they're automatically going to get it. The level three officers who will not get it are people who are certified before 2015. So those are the ones that are the focus of getting them trained on a ride. So that's part of the issue then the questions that have come up from the Vermont Criminal Justice Council are should level to law enforcement officers receive a ride training. And secondly, they don't even get DUI training, which is a precursor to getting a ride training. So that's an open question with respect to that. The other question that the Vermont Criminal Justice Council had is there are many level three officers who don't do traffic stops and a perfect example is like the Office of Professional Regulation investigators, or the attorney general investigators. So there's a question of whether they should receive the training, or that they could even be qualified to get the training because in order to take a right went training. There's a process that you have to go through at the beginning of the training to, to that you have the sufficient expertise to make a traffic stop. And the concern of the Vermont Criminal Justice Council is those folks wouldn't even be able to pass that initial test before they get their a ride certification. I think what we're going to propose is an amendment to do a further study around this issue because we still haven't got all the information we need from the Vermont Criminal Justice Council. And I think the only other thing in there is section 18, which talks about the substance misuse prevention funding and Michelle correct me if I'm wrong but I think all this section does is put into stat statute. The $10 million of funding for the, the substance misuse prevention. 30% it puts into statute 30% of revenues raised by the cannabis excise tax, not to exceed $10 million per fiscal year is now in statute under this bill. Quickly. Okay, thank you. I thought we already had that in statute that the last bit about substance misuse prevention. Ms. Childs. It was in session law enact once before there's also the what's new is subsections be and see be being a provision that the balance there's a carry forward and see being that any carry forward is in addition to revenues that are allocated for substance misuse prevention it's not a it's not a substitute. Would you say that again place. In addition see is that any appropriation carry any balance that's carry forward is in addition to the revenues that are allocated by the General Assembly for substance misuse prevention of so that it's so on the 30% so it's so it doesn't count towards that 30% of those funds go in there and if there is carry forward, you don't then have a smaller amount coming through for that next year. I'm sorry, I'm from not exactly. I got that so in fact, you know, they, it could be carried forward carried for there could be in fact a lot of money building up into that fund without I mean we normally sweep funds at the end of a fiscal year if they're if they're not expended. These are special funds Maria. Are you there. Can, can you. Yeah, I am. I'm sorry. Yeah, I know you're doing 20 other things. Can, can you help us understand and Michelle if you'll explain again what this does and Maria, I'm just curious if this is a common way to handle it. Okay, so, so can you just, I'm sorry, Michelle, I should focus. So, so you might want to look at the language in section 18. So, so subsection a language was in session law and act 164 last year. And so this is reenacting about putting it in statute and title 32. Subsections B and C are new. So B is saying that there's going to be carry forward. If there's any balance left at the end of the fiscal year and subsection C is that that carry forward is in addition to revenues that are allocated pursuant to subsection a. And I have to admit, this is something that came along through other people to me so I don't have I, I wasn't part of the anti it was the one who was working on it and then and Stephanie and in the Senate approach. So I'm sorry I don't have much. Okay. All right, so. Okay, so just when I went to the Senate, it was in the same format. This, it was drafted the same way. Okay, I believe what this is saying is that. So you're appropriate in session long in 18 a and anything that's not spent, according to some be gets carried forward and what you're saying is just like an other departments where they have carried for funds. Those carry forward funds are in addition to what's appropriated in the in the subsequent year. Correct. So, yeah. Okay, so it's not like an additional appropriation it's a carry forward so you're using part of the prior year's appropriation that wasn't fully expanded. Yeah. There's nothing peculiar about this this is a common practice. Yeah, I think that what they're just stating is that this in this fund that the funds can carry forward and you know they're making that that's what they're saying. So that okay. Yeah, we see that in other departments as well, you know, if they are allowed to carry forward it's the same setup. Yeah. Yeah. Okay. Thank you. Sorry guys I maybe I'm being slow and we I'm distracted like everybody is Robin. Yeah, thank you. The 500,000 in section 14 that it says from the general fund to ACCD for the social equity grants is this actually. Money that we are spending in anticipation of receipts. So I'm not seeing anything about the cannabis special fund, not the misuse the prevention stuff but the cannabis special fund running a deficit which is I know, you know the old fiscal note from last biennium we ran a deficit for a few years and then we filled the coffers so is this separate from that, John or. It is separate. It is new. Okay, that's 25. And so there was no loan or grant. No social equity loan or grant program in act 164 so this is a brand new fund. Okay, that was created. And we'll have two funding sources one is an appropriation of $500,000. And the other is fifth. And the change that they made but basically $50,000 from each each integrated licensee. And that'll be the two sources of funding for this. So, basically a social equity fund. Okay, so we're, we're seating it with half a million dollars basically once, and then the ongoing would be the 50,000 from various integrated licenses. And then we'll have the full picture of the bill and then we'll come back to questions. All right, thank you. I'll try to be brief because I know one of the things it's all standing between you and a weekend. So. Yeah, once they obtain a license they would have to contribute $50,000 to this fund. Okay. Just once. How about we let Scott explain describe the amendment. All right, thank you. I'll try to be brief because I know one of the things it's all standing between you and a weekend. So, basically, what we've done with houseways and means did with this, really just surrounding the fees is, we have removed all fees in here with the exception of the $50,000 for integrated license. And the cannabis control board to come back to us by October 1 with a recommendation for all these fees and it's the intent of ways and means to hit the ground running in January and to get these things all locked up and out there to the public. And one of the things that we've done here it's in the second instance of amendment is a requirement for the cannabis control board, in addition to setting the fees to come up with a plan to take not more than 10 years to reimburse the general fund for the half million dollar seed money that they're sending over. So that change for the integrated fee in the document we got from gov ops. They had 3% of gross sales up to $50,000 for integrated license, and we chose just to make that just $50,000 for a real license. That's a big deal we figure anybody that would be applying for that would have the resources to make that. So the fifth instance of amendment, as it came over from the came over from gov ops. There was a transfer from the general fund to the transfer from the general fund to the cannabis business development fund, and then there was an appropriation over to the for the for the assistance for disadvantaged groups that representative cannon was talking about there. We didn't really feel like it was our, our job our role to make an appropriation that's, that's your own world. And so what we've done in here is we've in 22. We've done 500,000 general fund to the cannabis business development fund. And then we leave it up to you to appropriate that to the, to what represented again was discussing earlier. And then that is ongoing that would be from the candidate that would be from the cannabis business development fund as these licenses come in. So that's basically the gist of what we did with it we removed all fees except for that integrated license. We made sure that $500,000 got back to the general fund. As they stand this thing up to read to reimburse the general fund for that seed money, and we took out the appropriations language figuring that you all could could do that better than we could. Okay. Thank you. And that means we need to be amending this bill to provide for that. Yes, lovely. Yes. Do you have something ready to go for us Michelle if we decide to go there we So, so the appropriation is in the Senate government operations amendment as it came over from the Senate ways and means was looking at it the way that the Senate wanted to do the language and put it in there is they have $500,000 being transferred from the general fund into the cannabis business development fund, and then they transfer it out of that fund to a CCD to use for the loans and the grants. And, and that was the way that they and working at JFO had said to do it in the Senate. And so I defer to JFO on this because it's I don't typically do those and but then we got ways and means. They said, No, it shouldn't be that way. And I brought Becky in and we were talking about the day a CCD is designated as the entity that would be doing the loans and grants programs and it also in the, if you look at the loan language, the fund language that's in 2005 it specifies what it's for. And so we thought that you didn't need to send it to a CCD you could just have it in the special fund and it could be utilized by a CCD and so I, I leave it there I tried to get a little bit of some clarification from Stephanie but Becky and I weren't clear entirely about why they wanted it done that way so maybe Maria can help sort that out with regard to the special funds but I can show you the language is section 12 of the House Government Operations Amendment and section 987 it goes through and talks about the funds that can the monies that comprise the fund and then subsection C talks about what the fund is to be used for and then section 988 talks about a CCD administering the fund and using those that those monies. And so section 14 which is on page 25 of the House Government Operations Amendment has the transfer and appropriation. So I do have an amendment that I had done for Ways and Means and they chose not to do it, but would just do essentially strike subsection B and amend the title of 14 to just be appropriation so that an FY 22 $500,000 is transferred from general fund to the cannabis business development fund. Thank you. Maria, were you following that. It was but what I what piqued my interest is that Michelle you had mentioned that Stephanie. Because she's worked on this bill all the way through the process I just wanted to touch base with her and see if I can get her read on how she thinks it should be done and so anyway I'm trying to texture. I emailed her yesterday and she emails back an answer but we didn't we still didn't understand. Yeah, no, I get that. So sorry. No, no, no, perfectly fine I just, I just want to talk to her because we need to get this right and sure. Yeah, so, but there is an appropriation in there. It's just more about whether or not you need to move it over to a CCD. Okay, and I'm looking at it right now so let me just keep trying to get Stephanie and we'll start this up. I'm getting pretty thoroughly lost here so I hope others are trying to get this sorted. I, Robin I don't know if your hand was next but thank you. I actually wanted to ask Scott which draft of their amendment they're looking at because I heard you mentioned a fifth instance of amendment and I only see four instances on draft 2.1 of what came out of your committee so I'm a little confused. Do you know which draft you're on mute Scott which one you. Yeah, I thought I was on the most current but let me, let me double check that. So I think it might be that. So the committee ways and means committee point one they decided they didn't want to do the fifth instance of amendment and they voted on in the first through fourth instance of amendment as version 2.1 and that's voted and sent back to the committee. Okay, so that's the real one. Right so representative back might be just looking at the first one that they view. Yeah, I'm looking, I'm looking at one point one Michelle and I'm not seeing 2.1 anywhere. I can, I can email it to you I emailed it to everybody yesterday but I end it again. Okay, okay that was what was throwing throwing me was that fifth instance of amendment so if I'm hearing correctly, the only actual appropriation is the $500,000 from the general fund to the cannabis control cannabis. That's correct. Okay, thank you. Okay, I'm still lost Marty. Well, I had the same concern that Robin had but I guess we got that figured out and maybe it sounds like it's going to be changed anyway. Regarding that discussion with Maria and Stephanie and Michelle perhaps but my other question is regarding this whole section 11 regarding the social equity part. And in section 13 of the bill, this is back into the bill, not the ways and means. There's a discussion about developing criteria for the loans shall be done by somebody or other I need to pull it up again here. But is there someplace to develop who are the social equity appropriate applicants. And is that to be left up to this group as well to determine who those applicants may be the identity of those persons. Yes, so there are groups, all of section 13 is for the cannabis control board in consultation with its advisory committee, a CCD executive director of racial equity to develop social equity criteria which would identify who the social equity applicants would be. Not just loan criteria, but who those actual applicants, what the criteria would be to fit into that category of a social equity applicant that is correct. And is there a deadline for determining that. Yes, October 15 2021. Thank you. Did you speak with a CCD about their capacity to administer this. Yes, we met with them and they testified before committee and the language that you see in in these sections. They, they suggested some amendments on one of their concerns was that well they are able to handle grant programs. Loans is something new. And typically they would work with Vita but because you can't handle loans to a cannabis entity. They are going to have to find a third party to do the loan servicing. There are at least one bank and one credit union in Vermont that have dealt with cannabis establishments, the dispensaries. And so they anticipate working with those. So that's why you will see section 988 which is in section 12 some language that says should the agency be unable to do so the program shall not move forward until the General Assembly appropriates the appropriate operational resources. Necessary for the agency to make loans and provide financial assistance to social equity applicants and that was language that they suggested in case they can't contract with a third party to provide the loan services. Thanks. So I had to ask what the operational resources would be. How is that being defined. Well I think what they mean there and this would be something that that would come up later if they are unable to find a third party is that they need someone to basically loan underwriting for for the social equity applicants. And they don't have the capacity to do that in their own with their proposed with finding a third party but if they cannot find that third party, then they would have to come back here and get an appropriation. If we want them to provide those services. Now it happened in a way. Right and this is not committing us to appropriating the operational resources is saying that they have to come back to the General Assembly, and we can decide if we want to or not. That's correct. Great. Thank you. Okay, I understand that Stephanie is on her way and to understand this I'm halfway tempted to switch. I'm just so aware that we urged others to come in so we because we thought we were going to go through this one quickly and anyway, I apologize to the other people who arrived early. Now we have you waiting I really regret that. Thank you. Stephanie, we are struggling to understand and please somebody describe to Stephanie what we don't understand because I don't understand it. I understand it's a little I cannot ask a question. Yeah, go for it Michelle. Sure. So Stephanie this is what Becky and I had emailed you about yesterday which is so there's the creation of the cannabis business development fund and the source of funding there. One is a $500,000 general fund appropriation and the other one is our one time contributions from integrated licensees. Yeah. So in section 14, the way that it's structured so a CCD would be administering the fund the fund is designated especially for certain uses for loans and grants to social equity applicants. A CCD would be making those loans and grants or contract if they weren't able to do that. So the way that section 14 came out of the Senate, and that y'all structured it was that in subsection a, it says that 500,000 is transferred from the general fund into the cannabis business development fund. There's a B that says then in FY 22 $500,000 is appropriated from the special fund to a CCD to make those loans and grants and so the question that we were trying to understand is why can't a CCD just access the funds directly from the special fund why do they have to be appropriated to a CCB out of the special fund. Okay, so the transfer is just the fund to fund action, moving money from the general fund to jumpstart money into the special fund. Every, every agent, every fund can only be spent if you appropriate dollars out of it. So it's the transfer is one transaction and the appropriations and other. You could directly appropriate general fund to a CCD and say use it the same way you would, you know, do the development fund, but you need to two actions because the fund really doesn't have any money in it. Yeah. So you're transferring money from the general fund into the new special fund, and you're simply giving the spending authority out of the special fund so it can only be used in a manner consistent with the things that, you know, you pay for a special fund. And so that's, it was just how you get the general fund to be spent on, because it's one time general fund is sort of the jumpstart piece, essentially. It's not the jumpstart fees. This is a totally separate pieces in it. It's about the social equity grant program. But it's the general fund. So it's, you're going to have a different source of money into this fund. I mean, you're the only source of money right now is this $500,000 from the general fund. Right. And that's done as a transfer, the way that came out of the Senate. How, once it's transferred from one fund to another, then the next step is how do you spend it out of that fund that it landed in, and that's the appropriation. So it's just the spend the appropriation is just spending authority it is saying you department X have spending authority out of this fund in this fiscal year. So there, but aren't there two things going on here. One is this creation of this new social equity grant program, which is not being funded at all by the special funds we're being asked to fund put 500,000 of general fund one time dollars to that program. It has nothing to do with the rest of, you know, of setting up the cannabis board and making this is all in the new development fund the $500,000 is only into the new development fund has nothing to do with the administration of the cannabis board. That's all done previously in the bill you passed last year. So, it's all it's in the but this is just about the development fund right right. Okay. Again, I am so fried that I am not following this well and I'm not reading the document. Are you trying to see that the, the, the, the news special grant program is separate from the development fund. I'm just stuck because I had no idea that we were going to be asked to put 500,000 of one time money into this program and all this is totally new news to me and I believe the rest of the community of the committee. I'm a little bit surprised by this, and I'm probably having a hard time getting over that and where period and now I'm not following where it's going but others are and I'm not going to torture you guys over my lack of ability to comprehend as long as other people are following it that's relying on the committee. So committee, do you have any additional questions for these poor people that I'm making suffer. And what is your pleasure. I don't see that we're having any additional questions Robin. All things I'm just wondering what the votes were out of the various committees I don't know how many committees were involved by some people from commerce and gov ops and ways and means so that's my first question. Ways and means on the amendment was 911. Okay. Just gov ops was nine to zero. Okay. Commerce way in or you're just there because you love to hang out with us. Okay. So what's the corporation is this 500,000 and it would be one time general fund money do we have the kind of floor in the Senate side of things so it's all accounted for up to date into the conference committee. It is. Yeah. Okay, and if, if we don't do this what happens. If you don't, if we don't pass the bill. Right now I guess we have to do. I guess we're going to be asked to do an amendment to actually appropriate the money is that right we actually have to do an amendment or we don't have to do an amendment. We can approve this as is and as amended by ways and means that's, that's where we are. That's where we've gotten to so at some point pretty quickly, somebody can propose that. Okay, that's what I'm trying to get to I'm working up to that I just want to be sure I understand what I'd be saying. So the only appropriation we're being asked to do is that one time half a million dollars which Stephanie you're telling us is already in. It's already accounted for it's already accounted for. So I will make a motion that we support as 25 as amended by House government operations and houseways and means. Okay, thank you. Is there a second. I'll second. Thank you. Marty. I guess we've gone on past that but my whole question was, where did this whole concept of social equity applicants come from and who discussed it and what is the, but that's the base fail I understand the concept of putting this in and why and where and $500,000 worries me of course but it's the whole basic concept of that being included in the bill. It's going to be just a brief background john. So, this conference is Senate to ushery but in when the governor chose not to sign as 54 or act 164. One of the concerns he raised was the lack of a social equity. And so I think what the Senate was doing here was trying to address one of the concerns of the governor of creating a social equity fund, so that people who have been just disproportionately impacted by the cannabis prohibition would have a source of funding to get into the cannabis industry the regulated cannabis industry. And so that's what I think the background story is with respect to the social equity fund. Thank you. Is there any further discussion committee. Are we ready to vote this. Okay, so made it you want to call the roll. Okay, so the thank you so the motion before us is to support s 25 is recommended by House government operations and further amended by House ways and means. Are we ready. Representative Fagan. No. Representative Feltas. No representative Harrison. Yes. Representative helm. Not with us representative Jessup. Yes. Representative shy. Yes. Representative squirrel. Yes. Representative Tolino. Yes. Representative Townsend. Yes. Representative Yacoboni. Yes. Representative Hooper. Yes. Are we holding this open or until we get to the end of of our meeting we have one more group one more bill to hear so we'll, we'll wrap up. We'll close it up and show up and we'll close it. Our reporter, Madam chair, our reporter on this bill. Oh, who said, well I have the cannabis control board if that but there's also other other organized people that are involved but I don't know if that matters. Anybody volunteering other than Robin. The answers no. I think you just heard. Yeah, I'm happy to pass the baton if anybody else prefer to do it. Rep Ganon and Scott if you're still here you're not Michelle. Thank you all for joining us and I beg your pardon for my frustration. It's just been a long week. Thank you. I hope I hope you understand. Have a have a great evening. Yeah. Made up. Before everyone scatters to the four wins I wanted to double check with regard to s 25 please. Am I to close the vote on this. Yes, please we're done. Okay, so then our vote so that it's formal here on s 25 was 821. Okay, thank you 821 and we know and Robin was volunteered for that. Okay, and we know where we are with. We have a plan for how we're going to figure out as 62 and we'll see everybody. Monday afternoon at 330. Okay, any, any further. Before the sun goes down folks. Thank you very, very much. Really appreciate your time. Take us off live.