 I'm going to start recording. Okay, and Savon's here. And we're recording. Okay, great. So thank you all for making the time today. This is just for the record. James Pepper, chair of the cannabis control board. Today is November 19, 2021. And this is our meeting of the full cannabis advisory panel. And today what we're going to do is review the rules that we've, that Brian and David have drafted in the, and they're largely a reflection of all of the incredible work that this advisory panel did over there since September, which by our count is over 70 meetings, that's seven zero meetings of the advisory committee and the subcommittees. So really just, you all went above and beyond, which, you know, I think you all signed up for, but we have a path forward now. I think Nellie has sent around the minutes. And if we could maybe someone from the advisory committee, if you've had a chance to review them, give us a motion to approve the minutes. Motion to approve minutes. So Chris Walsh and Jim seconded. Okay. All in favor? Hi. Hi. Great. All right. Well, then I'm going to turn things over to Bryn and David. In addition to kind of reviewing some of our rules, they also are going to give you kind of what the next phase of the cannabis work is going to look like. Okay. Thank you everyone for the record. Bryn here from the cannabis control board executive director. So thank you for the introduction. This is the purpose of this meeting today is really to do a high level review of the rules. So I just wanted to start out by thanking the advisory committee for the incredible work that you've done and supporting the board's work and just reiterate how appreciative the board is of all of the time you've committed to this project. So as I mentioned, we are going to do a high level review of the rules today. As everyone's aware, the board has had to work really quickly to achieve the deadlines that have been set out in statute. So to that end, we've developed two of what will be probably five rules. And the purpose today is to preview those drafts with you but not to take any formal action on the rules. They're still in draft format. And as I'm sure you'll hear emphasized over and over today, they are subject to change before we pre-file them. So to start out, David's going to give the advisory committee kind of an update on where the board is and the process of rulemaking. All right. So this is a little overview of the next steps and where we've been. I know that this was designed for general public consumption. So some of this stuff I know that folks on this advisory committee are quite familiar with. So I'll run through it quickly. But as you know, a couple of different statutory laws gave the board the obligation to write administrative rules. And a lot of the work that the remarkable work you've all been doing over the last few months has really been geared towards allowing us and allowing the board to make those decisions and making those rules. For those who aren't familiar with the terminology, administrative rules are similar to laws. The legislature passes anybody who engages in activities that are regulated by a state agency have to follow those agency rules, just like they would have to follow the law. And the board, of course, also has to follow its own rules that it puts out. And as I just mentioned and as others have mentioned, a lot of the work that's been going on is really geared towards the rule-reading process. I won't get into the nitty-gritty of everything that goes into the rule-reading process and the various steps that we're going to have to follow before these rules actually become official and become enforceable. But if you are interested, you can go to that link. I'd say most importantly is the notice and comment period, which is going to be coming up in a few weeks here, depending on exactly when we get the rules filed. Notice and comment period has to last about 40 days. The rules will be publicly available. They'll be prominently displayed on our website, or I should say the proposed rules. And the notice and comment period will include public hearings. I know the board's planning on doing that. And the board, by law, has to consider all written and oral submissions in terms of comment. So there is a lot more. I think as the chair pointed out and as Brian pointed out, this has already been a very robust process in terms of public input. This board, of course, being a big part of that, but also the public comment periods during the subcommittee meetings and all the public comment periods in addition to that and the board's interactions with people. But there's going to be still more in the notice and comment period. And the board may make changes to the proposed rules on the basis of those comments. So there is another opportunity for people to weigh in. This is what the board rules are likely to look like at a very high level view. There's going to be five rules, most likely. The board, of course, hasn't voted on this yet. So these decisions are not final, but this is the likely outline of what things are going to look like. Rule one will be the licensing of cannabis establishments. Rule two will be how those cannabis establishments are regulated. Rule three will have everything to do with medical cannabis and dispensaries and so forth. Rule four will be the compliance and enforcement piece of it. And rule five, which doesn't quite fit in anywhere else, is the board removal rule. And that's a fact. That's because this board, unlike most boards, the governor does not have the power to remove board members. There's only a power that's given to the other board members. So we have to write a special rule to accommodate that. And this is where we're going in the next, really, in the next few weeks. Rules one and two will likely be prefiled, which is just the term we use to describe the beginning of the process for becoming official rule within about five or six business days, keeping in mind, of course, that the state of Vermont and state government, the Friday after Thanksgiving is not a business day. I will say we've been aiming and operating as though we will get rules one and two filed just before Thanksgiving, but it is certainly possible as we are trying to fit all the final pieces together that gets pushed out to early in the following week after Thanksgiving. But that is our goal and what we've, the way we've been working and operating is to get it filed really fairly soon. And then as a result of that, the notice in common period will take place from a round late, mid to late December through late January. I think we're expecting to do the public hearings in January. And of course the board will consider and respond to comments and may make changes accordingly. And then the final three rules will be likely be prefiled in early January and of course the notice in common period will follow that probably in the, approximately the month following that first notice in common period. And the final piece after that, once we're through notice and comment, once the board assimilates all the comments and puts them, responds to them, makes changes or notifies, you know, has some discussion about what they want to do with them, then the legislature gets a turn and there's a legislative committee that will review the proposed rule and give input and then once they're done, the rule will become final. And that legislative review process takes, it's hard to say exactly because it's, to some degree, up to them as to what they, how they want to run their schedule, but within a couple months, I would say after the end of the notice and comment, that final piece should be complete as well. And so that's a little overview and I'll turn it back to Brayn. Okay. So before I start giving an overview of the rules, are there any questions about the process? Okay. So as mentioned several times, this is a draft, very much a work in progress. So this is rule one of the two rules that we're going to be talking about today. As Brayn mentioned, we're going through the licensing of cannabis establishments rule and the regulation of cannabis establishments rule, that's rule two. And then the remaining rules are yet to come. So we start out in rule one with some general provisions, which includes the definition section, which I'm going to talk about briefly, and then just some general provisions that apply throughout the rule. Section two is the license application format and the fees associated with license applications. Section three are the licensing tiers and the different license types that are tiered, which are the cultivation, the retail and the manufacturing license types. Section four includes the license application requirements that apply to all of the licensing types. So these are just sort of general application requirements. Section five is the requirements that are applied specifically to the different cultivation types. Section six, so the next three, four sections are the specific requirements for applications for the different license types, so manufacturers, retailers, testing labs and integrated, different requirements for applications for them. Section 10 is the application acceptance periods. Section 11 is the suitability determinations, and that includes the criminal record checks and what are presumptively qualifying criminal history records and then how to overcome those presumptive disqualifications. Section 12 is issuance of licenses. Section 13 applies specifically to those provisional licenses which are the kind of preliminary licenses that an applicant can get before they've got all of their ducks in a row. Section 14 are considerations that the board is going to make for prioritizing application, license applications. And I'm just going to note here that there is, the board has been discussing the priority of their consideration of applications and they talked about that this morning in their board meeting, they have not voted on that, so what they discussed this morning in the board meeting does not appear here in the rule. Section 15 are license renewal procedures section 16 is the cannabis identification cards and the requirements for those cards. Section 17 is applicants ongoing duty to disclose information to the board and then section 18 is confidentiality. So obviously I'm not going to go through the entire rule, but I am going to direct your attention to a couple of different places and the first is the definition section. So it's important to note that all of those terms that are defined in Title 7 Chapter 31 apply to the rule. So just as an example some of what's covered there are the definitions of cannabis, definition of cannabis products, characterizing flavor, advertisement child resistant packaging those are just examples of the terms that are defined in statute and they do not appear here in the definition section because they already apply in statute and they've kind of been incorporated by reference in this sort of opening sentence to the definition section. What we've done so far is to capitalize words that are defined in statute so it's clear that there is a definition associated with them. Although not every defined term is capitalized but frequently used ones are capitalized. Thanks for that. So the other thing that I'd like to note is that social equity applicant is defined here and this is the definition that is based on the recommendation that came from the social equity subcommittee that the board approved the recommendation that the board approved. The board hasn't voted on this particular definition. I would just like to point out. So the definition here is whether it is an applicant who's either socially disadvantaged or who has been arrested convicted or incarcerated for a cannabis related offense or who has a family member who has been. And then that socially disadvantaged is also a defined term which you can see here in subsection F. And that socially disadvantaged is presumed to include black and Hispanic Americans and other individuals that the board determines are going to qualify in accordance with a portion of the Code of Federal Regulations. And it also includes individuals that the board determines have been disproportionately impacted sorry, includes people that can demonstrate that they have been disproportionately impacted by cannabis prohibition. So that is the definition that I wanted to point out because it is new and the board will review it and vote on it when they need next week. And the other... It is subject to change. The board hasn't been able to vote on it. So just noting that, that is one of the pieces. Any of these pieces that you're looking at are subject to change because the board has not voted on the rules as a whole and that particular piece they haven't voted on. So I wanted to note that. Thank you. And the other piece that the board hasn't voted on is the lab standards piece that they did review it this morning but have not voted on it. So the second rule is the regulation of cannabis establishments. So again, I'm just going to go through the index here to give you an overview of what's included. So again, we've got the general provisions which includes the definition section and again, we're incorporating those statutory definitions by reference. Also, section 2 is the regulations that are applicable to all cannabis establishments and this is sort of a big portion that includes all of those records that are required, insurance requirements, background check requirements and obligations of continuing disclosure, health safety and sanitation requirements, employment and training, tracking of cannabis and cannabis products, transportation of cannabis and cannabis products, waste disposal, packaging, warning labels, advertising, composition presumptions for advertising, visitors to cannabis establishments, inspections, inversion and diversion from the legal market, how that is prohibited, compliance and other jurisdictions, reporting theft or loss and colocation. And then 2.3 moves into regulations that are applicable specifically to cultivators and that includes all of the pesticide requirements, visitors, testing, adulterated cannabis, packaging, inspection requirements, sanitation, cultivation and operations information that has to be on hand and vendor and employee samples. And then we've got some specific regulations that are applicable to outdoor cultivators and that includes outdoor security management, minimum security management practices, requirements for visibility from a public road and then security for drying, curing and storage and allowance for winter indoor storage. 2.5 moves into regulations that are applicable to indoor cultivators and then we've got again the security requirements and then energy standards and then reporting and reduction efforts that indoor cultivators are required to meet. And then regulations applicable to manufacturers and that includes the safety requirements, security requirements, testing requirements, packaging and then additives, records and sampling for vendors and employees. 2.7 is regulations applicable to wholesalers and that includes security requirements, processing and packaging and then 2.8 is regulations applicable to retailers and that includes language on buffer zones, retail security, age verification, packaging, standard operating procedures, samples and the safety information flyer. 2.9 is the regulations that apply to testing labs, cultivators and manufacturers so that includes the testing requirements and potency parameters, the moisture parameters, microbiological parameters, metal parameters, pesticides, residual solvents and then language about new tests, records and other parameters in testing methods and this is also a language that the board has reviewed but has not yet voted on. 2.10 are the regulations that apply to the integrated licenses and then 2.11 are the licensees ongoing duty to disclose information to the board which includes disclosure for changes in control and then again 2.12 is the confidentiality requirements and 2.13 is the regulatory waiver. Was there anything else that I could draw attention to? I heard in the lab noting the lab hasn't been voted on lab standards I think that was it. So that is the high level overview of these regulations. I am going to send out a PDF of these drafts to all of the advisory committee members for your review. So that will give you time to review them and get back to the board before they meet on these drafts next week. So I would be happy to take questions or to hone in on any areas that are of particular interest to the advisory committee. We will be to review like can we get hard copies of this review? Yep. Yes, Sivan. Really this is a question back to you which is are there any specific sections that you folks of the board and staff particularly want us to delve into with more of a fine-tooth comb? Obviously we'll need some time to go through the whole thing. Are there certain parts that you're especially looking for feedback or do you feel that all of it is still not something that jumps out to us? So I can start out by saying that obviously all of these all of the language here is based on the recommendations that came from the various subcommittees. So each advisory committee member like as a subcommittee member is more than welcome to review the parts of the rules that apply to their various subcommittees and we would very much appreciate your feedback whether you think it appropriately captures what was recommended by the subcommittee. But apart from that I'm not sure that there are specific areas that the board is looking for feedback on but I'll let them weigh in on that. You know I would just take the advisory committee back to what we've determined as the legislative intent of the cannabis market here in Vermont which is really to prioritize small scale cultivation, environmental stewardship, social equity embedding social equity not just by way of license holders but throughout the industry and so the rules that apply to those areas and the accommodations that we can make to those licensees while still maintaining kind of our commitment to environmental sustainability are areas where you know especially people that are in the industry that understand kind of the practices and the kind of how the market works whether it's a corollary, savante alcohol or you know or not like would be very helpful if you kind of put your eyes on it and say hey this is not going to work or this is not worked on the kind of liquor side of things that stuff is very helpful to us or this is unnecessary or this is overly intrusive we still have to deal with federal illegality of cannabis but so there's a lot in here that's probably overly intrusive but you know if you can kind of think about where we can make an accommodation for small cultivators and the like I think that's particularly helpful for us. The only thing I'd add real quick very much along those lines is obviously these rules cover a huge volume of subjects and so feel free to assign yourselves to areas where you feel like you have expertise and dig in on those because it'll be really helpful to have tight focus on areas that you know well and I think that'll benefit us on the board working for the board. Siobhan, Chris another one that we talked about today as a board is the idea of co-location both kind of from a vertical integration standpoint of kind of one license holder but also as a kind of landlord licensee and kind of tenant licensees co-locating in a single physical address you know that's an area where certain states allow it other states don't allow it and we walk through what I kind of thought were the pros and cons of co-location today but it's an area where you know it's new to us and if you have thoughts on that as well I would point you there to that section that's a well-worn subject to alcohol so I'll definitely take a look. Great anyone have any questions from a process standpoint you know we laid out a very high level overview of what our next steps are from a rulemaking perspective of course we still need a fee bill so we still have a few aspects that we're going to have to rely on the legislature for and we need kind of a compliance enforcement team we need a licensing portal which is a tech project so our agency of digital services is in the process of kind laying out a schedule for us on the kind of go live date for our licensing portal and we need the licensing review staff resources as well so there are certain while we may have our rules in time for the timelines that are laid out in our legislation a lot needs to fall into place for us to actually be able to go live on May 1st as the legislation directs us to and then of course there's the medical program we have kind of a plan in place to assume the medical program on January 1st, 2022 we have as part of kind of our condition of licensure we have a plan in place to maintain the continuity of services and products for that program during this transition and beyond but those rules are set to expire in statutes next year we're going to be working on kind of replacement rules and statutes for that that will require legislative action as well so there's a lot of moving pieces and the rules are one part of it you know we don't want to overly burden this advisory committee more than we already have but we do kind of want to continue the relationship with you all as we move forward through these major kind of milestones and that's why we called you here together today is you know we put our kind of we're putting our final touches on this and we really appreciate any feedback you can that you have you know think about your area of expertise why you were selected to be a part of the advisory committee and really if you can I know it's asking a lot but to drill down on the areas that you see here where you feel most capable of kind of giving us advice giving us recommendations you know pointing out unintended consequences and red flags Meg has her hand raised sorry Bryn I know you said this but you'll be sending out this draft to all of us when did you need our feedback by so the board the goal right now is for the board to meet on Tuesday to review the rules and vote on them that is the plan right now so if possible before the board meeting on Tuesday which right now is scheduled for 10 o'clock okay great thank you there are ways for us to modify later than Tuesday of course so please I mean that is the the cleanest way is for us to give recommendations and make changes on Tuesday but that's not the kind of drop dead date for changes to these rules no by all means and this is you know I think David went over this in the process the rule making process is a public process so there will be multiple opportunities for feedback as we move through that process so even after we pre-file the rules there will be they will change we will be responsive to all of the feedback that we get during that time as well so does anyone just have any last kind of thoughts right now I know we kind of dropped a lot of information on you and we didn't go you know line by line through this going line by line would take a number of hours but you know if there are any kind of last concluding thoughts before we ask send you on your way please feel free to raise them now otherwise we'll turn to public comment okay well thank you all again it's been a real pleasure to work with all of you I know no one really asked this you got assigned this role or many of you did but it's been I think you know we really do have we're charting a new way forward in Vermont and it's different than any other state has done it and it's kind of has a Vermont ethos built into it so it's kind of an exciting document exciting group of rules and it's really again a reflection of the input and the work that you all did so thank you and I would just if anyone from the public would like to make a public comment please raise your virtual hands and we'll start with Dave Silverman thank you James I don't want you to receive this question as coming under 1VSA 317 is the draft that you are sending available to the public at this time and if not when can the public or me see a draft of these regulations so it is not available to the public yet but it will be available and posted on our website at our next board meeting which right now is going to be Tuesday at 10 o'clock so just to be clear and I'm sorry for falling up before the Tuesday 10 a.m. meeting adjourns the public will have access to these rules draft in some sort of downloadable format yes thank you very much we have Jen next hi this is Jen Daniels Maristow Farms can you hear me okay? yes great I have three comments that I will also submit in writing and I will just read them crafted ones on the co-ops which we mentioned before ones on outdoor cultivation and ones on access by out-of-state brands is it okay to read them there are a couple of points to each one sure I should be included in the licensing structure for the following reasons to strengthen competitiveness for small businesses which we are one provide an additional pathway for social equity benefits support market price stability protect growers from unfavorable distribution terms and then finally elevate Vermont's craft brand limiting wholesale licenses to co-ops would also be wise in the disperse nature of the adult use retail market the increased costs of which will exert downward pressure on prices paid to growers on outdoor cultivation we feel that it should be increased well beyond the current 20% share of supply recommended in the 10-15 report the 20% recommendation appears to result from erroneous assumptions the report assumes that harvest will hit the market during a period of low demand in fact we're experiencing right now October crop harvest are typically ready for retail just in time for the holidays the report overlooks the fact that flower is shelf stable for at least 6 to 12 months if it's stored properly and then finally the report does not sufficiently account for the importance of terror war for Vermont's brand given Vermont's excellent climate there are definitely issues with mold and where you are but that's pretty much writ large when you're farming and elevating the emerald triangle of the east as folks like to say indoor flower is certainly fine and it is both an art and a science but it shouldn't discount the unique flavors of outdoor grow especially when we're looking across the entire country and then finally about access by out of state brands to the Vermont market should be restricted or eliminated in order to support the Vermont brand and the diversified small business oriented character of Vermont's adult use program we have 3 points on that briefly major national brands exert undue influence over producers throughout all kinds of agricultural value chains even when they have no ownership stake the advantages obtained by producers licensing national brands not only in market access but also access to investor capital all in favorable terms for ancillary materials will enable them to dominate the retail market Vermont squeezing out many if not most local brands and then finally the dumplings of national brands on Vermont shelves will undermine Vermont's craft thank you for that lengthy comment and all the work you're doing thank you Jen any other public comments Ben Fischer thanks so much for everything you guys are doing I've written a number of comments to the I've written a comment section and I was just hoping for a chance to advocate for the ability of cultivators to do some small scale manufacturing of product development some long time hemp grower but growing hemp since 2016 and we're currently allowed to also obtain manufacturers permit and I just think that at least the lower tier and some product development should be allowed to cultivators otherwise really all the products that are going to be hitting the market I'm just not sure I see good reasoning as to why big growers themselves if you have cultivator permit wouldn't be allowed to develop their own products that's my comment thanks so much thank you do you mind if I wait till after the public comment period great next we have Jeff Rink as a total so I'm just looking at the October 15th report market structure license fees and whatnot and I'm seeing that the outdoor cultivation canopy size is the same as mixed light and indoor I'm assuming that's an oversight as we all know growing 1000 feet outside is not the same as growing 1000 feet inside in fact a standard has evolved in legal states over the years that adopts a cultivation ratio we propose for every 4000 square feet outside there is 2000 square feet mixed light and 1000 square feet indoor what's going to happen is if we roll forward with what we're proposing we will have an inequitable production from the full sun and mixed light categories so please keep this in mind I hope this was an oversight I look forward to continuing this conversation the coming days to clarify and make that correction in the canopy size thanks Jeffrey anyone else who's joined via the link would like to make a public comment please raise your virtual hands I see one person by phone if you join by phone and would like to make a comment you can hit star six to unmute yourself alright well then we'll close the public comment period Sivan any other members of the advisory committee would like to make can respond to any of those points or would like to have any last discussion before we adjourn Sivan yeah it was such a general question and perhaps this was covered in one of the subcommittees that wasn't subcommittees I was on perhaps maybe we'll see some of this in the rulemaking but is there anything that you folks can share with us at this point about any developments regarding financing specifically banks I know that federal federally chartered institutions aren't going to be able to work with any of our licensees but is there any progress with any remote chartered financial institutions that have expressed willingness to bank our licensees so I have not heard we've been having kind of financial roundtables and we incorporated a lot of the recommendations in the asks that those financial institutions in Vermont wanted into our recommendations into our rules around ownership and criminal history records and the kind of things that might kind of trigger a suspicious activity report for instance so I think that the financial institutions will feel comfortable with what is in our application process and maybe that will entice them in. It's my understanding that BSECU will be engaged in a small scale in banking certainly the licensees that they have current relationships with and a little bit beyond that is my understanding but we haven't heard any kind of large scale people jumping in but we do anecdotally from what I hear from other states there are banks that are willing to come to state charter banks willing to come into Vermont and do some banking with us so I think we're still kind of waiting waiting and seeing what that looks like we did require as part of our licensure a depository account or an attempt to make one demonstrate hardship so we are going to encourage people to have a relationship with a financial institution so we'll see how it goes honestly it's an experiment that we're running right now. Anything else from the advisory committee? Well I guess just thank you once again I don't want to be overly effusive but I really you know when we started this process with the advisory committee in September I really did think we had lost a whole year and it seems like we're because of the incredible work and the pace that you've all been working at it seems like we're having a path forward to be back on track which is an incredible feat so thank you all and I will adjourn this meeting