Last week, Governor Scott signed Act 176 into law, making significant changes to Vermont’s cannabis regulations. The law increases limits for cannabis cultivation and possession, eliminates integrated licenses, creates a pilot program for event permits, lowers outdoor cannabis cultivator licensing fees by 50%, and changes rules for residential leases.
The bulk of the law goes into effect July 1, 2026 but the decreased fee schedule does not go into effect until July 1, 2027.
What does Act 176 do?
In addition to lowering fees, permitting cannabis cultivator cooperative corporations, paving a path toward interstate compacts with neighboring states, this law:
- Increases the amount of cannabis a retailer may sell in a single transaction from one ounce to two ounces.
- Increases the amount of cannabis a person may lawfully possess from one ounce to two ounces and increases the amount of hashish products a person may lawfully possess from five grams to ten grams.
- Establishes a pilot program allowing the Cannabis Control Board (“CCB”) to issue ten event permits over the next two years allowing for off-site retail sales of cannabis products. These permits require substantial coordination with local and state officials and prohibit sales at any event where alcohol is also consumed.
- Invalidates residential lease provisions which prohibits a tenant from possessing cannabis products within the rental premises but continues to allow provisions prohibiting the use of lighted or inhaled cannabis products.
- Extends the length of cannabis establishment employee licenses from one year to two years, requiring a $100 biennial fee per employee rather than an annual $50 fee.
- Allows the CCB to issue longer product registrations for products it deems low-risk and shelf-stable.
What is a Cannabis Cultivator Cooperative Corporation?
Act 176 gives licensed cannabis cultivators the right to form a cooperative corporation – similar to agricultural or housing co-ops, this allows cannabis growers to form associations under Vermont’s cooperative corporation law and entitles any such co-op corporations to the same benefits as other Vermont co-ops.
What is an Interstate Compact?
This law recognizes the growing medical and cannabis industry throughout the United States since Vermont legalized recreational cannabis in 2022. Anticipating future loosening of federal regulations on cannabis, Act 176 allows the Governor to enter into agreements on behalf of the state with other states with legal cannabis markets. While these compacts will only be effective once the federal government takes the next step toward re-scheduling/decriminalization, it paves the way toward a regional interstate compact with other New England states which could lead to more competition, lower costs, and better products.
What didn’t make it into the law?
Initially, the first drafts of the law would have also increased THC limits for cannabis products, created a pilot program allowing for delivery permits, permitted on-site consumption permits, and changed permissible tax deductions. These proposals are likely to reappear in the next omnibus cannabis bill, likely after 2028.
How would this impact businesses?
Cannabis businesses in Vermont will be significantly impacted by enactment of Act 176. Not only would they have more opportunities for business growth, they would also have additional compliance requirements and regulations to navigate throughout that growth period. However, if federal cannabis regulations are relaxed, this bill gives Vermont the chance to adopt a similar regulatory landscape as those in Maine, Massachusetts, and New York. The Vermont Growers Association previously characterized the bill as “a positive step and a welcome change from previous legislative sessions.”
Please contact Catherine A. Burke (cburke@gravelshea.com) or Chris M. Bohorquez (cbohorquez@gravelshea.com) at Gravel & Shea PC if you have questions or would like assistance.
