Proposed Cannabis Retail Revenue Share for Municipalities | Local news


BRATTLEBORO – Cities don’t yet know exactly what their share of retail cannabis revenues will be in Vermont, but a few proposals would make the prospect more attractive.

The subject has been covered in recent editorials and in an episode of “The Montpelier Happy Hour” in which host Olga Peters interviewed James Pepper, chairman of the Cannabis Control Board (CCB), and the state representative. Emilie Kornheiser, D-Windham-2, who is Deputy Chair of the House Ways and Means Committee. Kornheiser said cities must register through community votes to host cannabis retail stores, and enticing the prospect with more income would help attract more stores to the fold.

“This was hotly debated within the conference committee,” said Pepper. “It was the main point of friction between the House and the Senate.”

Pepper said the House felt the fee was enough to entice cities to host stores, but the Senate wanted to give cities a portion of the tax revenue. He described the board discussing whether roads should be repaved more often or whether law enforcement should respond to more incidents.

The board of directors was established under Law 164 for the purpose of safely and fairly implementing and administering the laws and regulations governing adult cannabis use in Vermont, according to Retail sales of cannabis are expected to begin in Vermont from October 2022.

Pepper said the CCB ultimately decided to recommend a maximum local administration fee of $ 100 or charge a flat fee based on time spent reviewing a retailer’s application. The CCB also suggests that the legislature allocate 1% to 2% of the state excise tax on retail sales to the municipalities where the retail sales have taken place.

Sales tax applies to almost everything purchased, and excise tax applies to specific goods and services. Some communities, including Brattleboro, apply a sales tax on local options of 1% in addition to state taxes.

State Senator Jeanette White, D-Windham, doesn’t think the CWB’s proposed revenue sharing with municipalities goes far enough.

“But at least they mentioned it somewhat,” she said.

White is working to introduce a bill whereby 10% of excise taxes on cannabis sales go to the state and 4% to municipalities.

“We see that it is the cities that are going to have to face the problems, not the state,” she said. “These are the cities that need the revenue and we should be doing more for the cities with revenue sharing. This is a new source of income, so now is the perfect time to do something because we will not have a new source of income for a long time.

White predicts the bill will be blocked by the House Ways and Means Committee, which she says is “keeping the money for the state.” She wondered why a city would agree to go after cannabis retail establishments without getting much.

Thirteen municipalities have a 1% local options sales tax, but “the rest of the cities won’t get anything,” White said.

“I work with the League [of Cities and Towns] to see if they can make a difference this year, because if we don’t do it now, it won’t happen, ”she said. “It is the cities that have to take care of zoning, bylaws, aqueduct extensions and sewage treatment.

Senator Dick Sears, D-Bennington, has said he fully supports White’s proposal.

“I absolutely support sharing some of the revenue with communities, especially through a sales tax,” Sears said. “I’m all for it.”

Sears said the Legislature should keep trying to generate revenue for cities.

Tim Wessel, Brattleboro Select board member appointed to the Cannabis Advisory Board where he represented municipal interests while working with the CCB to create a thriving market, said the CCB had listened to him, as well as the Vermont League of Cities and Towns, when they recommended asking the legislature to reconsider granting a portion of the excise tax to municipalities.

“I think it’s pretty important that everything is back on the table if Jeanette reintroduces this idea and can the House ignore her now?” he said.

Wessel only counted about 30 out of 257 municipalities in Vermont that have opted to retail cannabis through community votes.

“It’s a bit of a problem because all of this state revenue money is based on the assumption that there will be a lot of cities that will sell cannabis,” he said, noting that he was not making the case on behalf of Brattleboro because it is not his position as a member of the committee. “I think Brattleboro will be fine no matter what, because we have the local options sales tax, which I fought for.”

Wessel said the board’s recommendation for revenue sharing with municipalities is lower than any other state or states have it just as low, but with better fees.

Kornheiser said to support small businesses, “we really need to focus on low costs [and] decently low excise duties.

“We have to support these companies with a really positive regulatory structure, so I really appreciate the way the board has made recommendations in line with these policy goals,” she said on the radio show. .

Pepper told Peters he believed if retail cannabis in Vermont had a craft market similar to beer, maple syrup and cheese “then we’ll hit some pretty good revenue targets.” It projects annual revenues of around $ 40 million until neighboring states embrace the markets.

The board recommends that all of the 6% sales tax collected on cannabis sales be allocated to Vermont Afterschool programs and that 30% of excise tax revenue be allocated to prevention programs.

Greg Sukiennik contributed to this report.

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