 We began yesterday walking through S54, focusing primarily on, or focusing exclusively on the changes that have been recommended to us since we last considered the bill, and in order to get a better understanding of the recommendations from natural resources and ag, we needed to have Michael O'Grady. So thank you for being with us and help us understand the recommendations. This is Michael O'Grady with Legislative Council. When S54, as it came out of your committee, was reviewed by the House Natural Resources and Fish and Wildlife Committee, they had the question of whether or not cannabis cultivation and manufacturing, as proposed, was farming. And that was an important question, because farming, as defined as I will walk you through in a second, is exempt from municipal land use, is exempt from state land use under Act 250, is presumed to be in compliance and not need a water permit if it's compliant with RAPs, does not need groundwater withdrawal permits if they're drawing more than 50,000 gallons of groundwater a day. And potentially it's exempt from property tax if it's enrolled in the use value appraisal program. So the Natural Resources Committee was concerned that because farming is defined as it is on the board, cannabis cultivation and production could be construed as farming, and they had questions including, is cannabis a horticultural crop? Well, horticulture is the science of plants and producing plants, and horticultural crops include flowers and seeds. And so it's a very good argument that cannabis would be a horticultural crop. The operation of the greenhouse in Vermont is farming. Well, greenhouse isn't defined by our state agriculture agency or the USDA, but EPA defines greenhouses basically as any building in which a plant is grown for commercial use. And so that would be a cannabis indoor cannabis production or cultivation facility. So with that and the potential that cannabis cultivation and production could be considered farming, the House Natural Resources Committee reviewed potentially how other states regulate cannabis and whether they regulate it as farming. And they recommended that consistent with some other states that cannabis not be considered farming, that cannabis be subject to all other applicable environmental laws. And you will find that on page 33 of your draft. In that chapter regarding the regulation of cannabis establishments, there would be a new section added that would say cannabis establishment shall not be regulated as farming under the RAPs, under six VSA chapter 215, which is water quality, agricultural water quality, or other state law. And cannabis produced from cultivation shall not be considered an agricultural product or agricultural crop. For the purposes of 32 VSA chapter 124, that is current use 32 VSA 9741, that is the sales tax or other relevant state law. Then goes on to say the cultivation processing and manufacturing of cannabis shall comply with all applicable state, federal, and local environmental energy or public health law, unless otherwise provided by the chapter or rules adopted under the chapter. And then because you do have limitations or you address municipal regulation of cannabis establishments, there is a specific provision regarding how much of that authority, municipal authority, can be utilized. And it says a cannabis establishment regulated under this chapter shall be subject to regulation under 24 VSA chapter 117, which is municipal land use authority, as authorized by the chapter. So you go on and say later that they can use 44 14, but only certain aspects of 22 91. And so you it's it's basically saying as as authorized the municipality can use its authority. And then the House Committee on Agriculture was concerned that cultivation, processing and manufacturing of cannabis should be subject to some review or oversight or criteria related to agriculture effectively kind of conditions, restrictions on the cultivation and processing of cannabis. And they referred to the required agricultural practices, which are practices that all farms in the state are subject to. And they said, Well, why shouldn't the RAPs apply to cultivation and processing? And it's a it's a valid point, except that the RAPs include things like exclusion of livestock from water. It includes how to compost your animal mortalities, things that really are relevant to a cannabis establishment. So instead of saying that they shall be subject or follow the RAPs, it says that the cultivation, processing and manufacturing shall comply with the following sections of the RAPs, those that are that are really applicable to a cannabis establishment, including conditions, restrictions and operating standards. That section really is about managing your water quality. Section eight regarding groundwater quality and groundwater quality investigations, that's about if you are doing something, manure application, nutrient application, pesticide application, you need to take certain measures to avoid contamination of groundwater. And if there is potential groundwater contamination, the agency of agriculture has some authority to investigate. And then section 12, that's regarding subsurface tile drainage. Does everyone know what subsurface tile drainage is? It's actually not a tile, but it is a drain. What is used commonly is perforated plastic piping. You may see it in the fields driving around. It's often coiled. And what it does is they cut a ditch in a field that is wet. They lay the perforated plastic pipe in that ditch. It usually has gravel or some sort of stabilizer in the bed. And that then allows water to be siphoned off or drain off of the field, makes the cultivation conditions better. So if there's going to be outdoor cultivation, there might be subsurface tile drainage. And basically what the RAPs require is you don't have a subsurface tile drainage that has a surface that comes up to the surface because anything that would go into that now becomes a point source. You put a rodent cover on any kind of thing that comes to the surface, so rodents don't make it their home. And so there are some basic requirements for subsurface tile drainage. If there's going to be outdoor cultivation and if outdoor cultivation and cannabis uses subsurface tile drainage, it would be subject to that. But the RAPs are often a trigger for some of the environmental permitting exemptions or environmental permitting compliances. And remember, you said all applicable state environmental law, so you have to be clear that that application of the compliance with the RAPs, those sections, should not be construed to provide a presumption of compliance with or exemption to any applicable state, federal and local environmental energy public health or land use law. So yes, they have to follow those RAPs, but they also have to maintain compliance with all other applicable environmental law. Is everyone following right now? Okay, moving on. The next change is in the previous draft or the version that you reported out, there was a report from the Executive Director of the Cannabis Control Board regarding what environmental standards should apply. Well, you've just said that all environmental standards, applicable environmental standards will apply. So that report needs to change and House Natural said, hey, we recognize that there may be some scenarios, conditions where certain environmental conditions should not apply or there may need to be additional requirements. And so instead of the board reporting back on what should be required, the board is going to recommend exemptions, specific criteria or additional requirements under applicable state or local environmental or land use law for cannabis establishments. And the committee was really specific about groundwater because they heard that hemp and legal cannabis are a crop that require significant irrigation when grown outside and potentially when grown inside. And they were concerned about the effect on groundwater. So they want the recommendation to address whether additional groundwater quality requirements or regulation are required for the cultivation of cannabis in order to protect the groundwater resources of the state. Groundwater has been declared a public trust resource in Vermont, which means that it's supposed to be managed for the benefit of all the people. So this is partly where the committee's concern is coming from. And they want a recommendation from the board regarding that. Now you have recognized that there might be tiers or types or categories of cultivation. And so the recommendations may address that as well. And that's really my two major things to report on. There is one other issue and it's on page 38. The rules concerning cultivators were supposed to include pesticides or classifications of pesticides that are not deleterious or harmful. I don't remember the exact language to humans. At this time, EPA has not approved the use of a pesticide for cannabis. So the way that it was reading, there couldn't really be rules that there's nothing that's actually been approved. So instead of having that standard about being harmful or not, just have the rules include pesticides or classes of pesticides that may not be used by cultivators. Carrie Jiguerre, the person that runs the pesticide program, he's aware of certain pesticides that either when sprayed on this type of a plant or when used in the way that this type of plant is used can create harmful byproducts or are harmful of themselves. And so he proposes to get rid of that. And then you don't need the qualifying clause, the including clause for standards for indoor cultivation about environmental protection requirements because you've stated what they are. Thanks, Mike. If you go back to page 34, I just want to make sure I understand the amendments in this area. You say in C on line seven, a cannabis establishment, it's got to comply with 24 BSA or could be subject to 2117. So I just, in layman's terms, does that mean that if a town has zoning and an area is not regulated or is not zoned for something that would allow commercial or agriculture, then this, the town zone would not be superseded because of our right to farm loss. Maybe I'm asking this in a fact. No, 44 14 includes the ability to establish agricultural districts under zoning. And so that authority would apply. Yeah. So if it was cultivation, then they could say cultivation of cannabis should only apply in the agricultural district. Yeah. Remember, this isn't farming, so they can regulate it like any other commercial or industrial. So if they have a residential zoning, unless they specifically say that you can cultivate cannabis, then I would assume from this language that the town would be not allowing that. It really all depends on each municipal's zoning bylaw and what it says is allowed in each district that it creates. For example, I'll just use Charlotte. I just looked at Charlotte's the other day and they say that certain uses are uses as of right. Like a squirt, a squirt school is a use as of right. You can put a school in whatever part of Charlotte. Okay. You want to put it in. This isn't that type of activity, in my opinion, but I would have to look at every zoning bylaw and tell you whether or not it was a use as of right. Or if it was a if every district allowed a commercial activity. I think what that subsection C gives is the ability for the municipality to say we don't want this activity in this district. I think that that is so they could clarify that if it wasn't clear. If it wasn't clear, it's up. They have. They don't have their full authority because you say later in the bill that they can't regulate them away, right? You can't prohibit them in the municipality. Okay. That's later on in the bill. That was nothing that I have changed. Okay. Or how it's natural has changed. You could not set up your zoning so that no areas of the town. Right. You cannot prohibit them. You cannot regulate them away. But you can let it. But you can say we approve it in this district or not in that district. I think you have that authority. Okay. And you also later on say that the municipality can use its sign authority and nuisance authority under the enumerated municipal authorities. So that they have that ability as well. If if a establishment is creating a nuisance, they have that. I'm bringing this up because you said our right to farm laws. Our right to farm laws only apply to farming and its nuisance protection. You're saying that the municipality has nuisance authority later on in the bill. Okay. So Jim was on line seven and I'm on line five. I'm sorry. What page? 34. Okay. It's obscure. But it infers that you have to comply with all applicable state and federal and local unless otherwise we have the ability in some district to modify federal. No, you don't. But this is a product that has is currently listed as a controlled substance. But the processing or the operation of the facility may trigger federal requirements. The thing I visited a medical marijuana dispensary this summer fall. There there are are in use at that dispensary certain chemicals or substances that would trigger what's called the emergency planning and community right to know act, which requires notification of local public safety officials of the presence of that substance on the property so that if there is a need to respond that they have, they know what they have to do or what they may be facing. So you you want to you want to reference that I think or that type of of law. You can't change the federal law. But you want to be clear that the establishment needs to comply with that. Yeah. Yes. This language seems like we somehow have the ability to go around it. Okay, sure. If I understand you correctly, this growing of this will be a non agricultural process. It becomes commercial and commercial only. I think it could be viewed as commercial or industrial, depending on the nature of the processing or manufacturing. I'm just a lot of towns, small towns, mine being one of them has clearly made a lot of areas open for agriculture. But commercial is a very small that usually very located in a civic place very small thinking of the type commercial businesses that you think of this being of the nature that it is. In my town right now, unless they change zoning, it's locked out many farmers doing it. Well, I think it's up to the municipality. I think they they have that ability to to rezone and allow or say in what was once an agricultural district that it's agricultural and maybe used for cannabis. I think that that's now the municipal's authority, which basically puts it to the municipality to decide whether or not they want any grown in town. Any that they have the ability to say yay or nay for where this product could be grown. But in reality, if there is no place in town that meets that requirement today when they change the zoning, they can actually lock it out by the vote of not allowing any zoning for that area. I do think that that that is basically unchanged from 54 as it came out of your committee previously that that was this is just clarifying that that cannabis is not farming. That reference to 44 14 and the municipal authority to to zone that way that was that was in 54 as you previously passed it out. And I thought was it was agriculture. Okay. Thank you. Do you need me to stick around or what is your availability after the lunch? Find schedule in here until three o'clock. Well, I presume we won't need quite that long. Okay. But please do come back. Okay. So committee, we're going to have a an hour here for lunch. And then my intention is for us to go back through the bill. I think you'll notice that we've got some gray highlighted new language, which is grates language. We've got some yellow highlighted new language that that Michelle has worked on that incorporates the date changes. And is there other highlighted language that I saw because they're a couple of the yellow is what I went over with you yesterday with that incorporated all of the health care and the new regular board structure. There's blue, which is to try to save you from having to go back through a reading all the yellow again. So the blue is the stuff that I've made sense yesterday afternoon. And so that is addressing the advisory committee, small cultivators and testing labs and some kind of just jiggering around the date to go to make the timeline work. Okay. So we will come back to that at one. So this is a question for Michelle, but reading through the bill last night, the very last section was the cannabinoid language that we put in as a request. And it's my understanding you would know better that it passed on some other bill last year. Oh, I don't know. It might have and nobody told me, but it may have been on the bill reform legislation, which I wouldn't look for it there either. But it was my understanding from a conversation last night that it's no longer needed. Okay, I will check on that. And if it if that doesn't need to be any more, I'll pull it out and just make the bill a little shorter.