While its neighbor to the east continues to face stiff headwinds from the governor’s mansion, Vermont is carefully moving forward with expanding adult-use legalization measures. Vermont’s state Senate passed legislation late last week that would allow for retail sales of cannabis across the Green Mountain State if approved by the House and Governor. And that is a big “if” for Vermont, where in both 2016 and 2017 similar bills were passed by the Senate only to die in the House. But in the rapidly evolving landscape of cannabis legalization, a lot has changed in New England since 2017. Let’s take a look at what has changed, and how Vermont could be laying a roadmap for other small states to emulate.

Vermont Legalization Has Growing Impetus Due to Neighboring States

We don’t need to tell you about the success that Massachusetts has seen in only its first quarter of legalized adult sales, but similar to what we described with Wisconsin in the Midwest; Vermont faces a risk of falling very far behind from a revenue and competition standpoint to neighbors such as Massachusetts (and eventually New York). Just as the Badger State faces a sandwich effect from its neighbors, Vermont risks losing out on in-state sales tax for cannabis sales, in addition to tourists spending cash on cannabis while in Vermont.

Vermont won’t ever compete on a similar revenue scale as New York, but the avoidable complexity and risk of out-of-towners (or Vermont residents) coming into the state with retail goods from a neighboring state can be avoided with passage of a rec-use sales bill. This is also known as passing a forward-thinking and revenue-increasing bill to assist in cutting down on interstate trafficking.

Vermont’s Adult-Use Plan Is Sized For Vermont (and MAYBE Other Small States)

You read the headline at the top of the page, Vermont’s plan is brilliant in its modesty and in how manageable it could be for any small state. Here’s a quick recap of the bill’s provisions:

• Licensing priority to Vermont businesses, including existing medical marijuana dispensaries and businesses that are environmentally sustainable and/or owned by minorities or women.
• Preference to small cultivators during the initial licensing round in an effort to support small, local farmers.
• A limit of one license of any type, at one location, for each applicant.
• A retail sales tax of 10%. Municipalities that allow retail stores could establish a separate 1% sales tax.

Prioritizing local, minority-owned, environmentally-conscious businesses? Check. Preference towards small-scale cultivators and farmers to support small and in-state operations? Check. One license, one location for each applicant? Check. A retail tax of 10% across the board with municipalities afforded the option to tack on a 1% sales tax? Check and check.

These stipulations afford Vermont all the power to keep cannabis manageable in the state and also, if you hadn’t done the math, these all stand as very strong deterrents to multi-state operators. MSO’s have become a bit of a boogeyman for the mom ‘n pop sector, and Vermont has an earned reputation of keeping major corporations out. [Fun fact: Montpelier is the only state capital without a McDonald’s. –Ed.] So it makes sense for the state to be leery of multi-state operators which may not have a town or the state’s best interest in mind.

What the bill calls for could be readily emulated in other states with small populations and small boundaries, but are still eager to get into the cannabis game. It’s a win-win and is definitely worth the consideration of Vermont’s House of Legislatures and its Governor.