Rhode Island House Committee Takes Up Governor’s Cannabis Legalization Proposal
Lawmakers in Rhode Island are, once again, talking about cannabis legalization.
On Thursday, the House Finance Committee discussed Article 11 of Gov. Daniel McKee’s FY 2022 budget, which would legalize and regulate cannabis for adult use. Earlier this month, adult use saw its first hearing of the year in the legislature, as the Senate finance and judiciary committees took up both Article 11 and a completing proposal, Senate Bill 568, also known as the Cannabis Authorization, Regulation and Taxation Act, or CART Act, introduced in early March by Senate Majority Leader Michael J. McCaffrey and Senator Joshua Miller.
During that hearing, as Cannabis Wire reported, McCaffrey said, “Hopefully we’re able to work with the administration and all the parties involved to come up with a piece of legislation that will pass this year.”
Indeed, the debate in Rhode Island is not whether to legalize, but how. This is increasingly true elsewhere, as well. In neighboring Connecticut, for example, the “how” question is front and center as lawmakers consider Gov. Ned Lamont’s proposal alongside lawmakers’. And in New York, disagreements over the differences between Gov. Andrew Cuomo’s budget proposal and lawmakers’ bill held up the passage of adult use for years, though lawmakers’ bill ultimately passed last month.
Sharon Reynolds Ferland, the House fiscal advisor, gave an overview of Article 11 at the start of the discussion on Thursday. Two major differences between the two proposals are around home cultivation and local opt out. The governor’s proposal does not allow for home cultivation, while the CART Act does. Under the governor’s plan, localities can opt out of all cannabis license types by referendum. Under the Senate plan, they can only opt out of sales. The CART Act, as of now, is being “held for further study.”
Two topics came up repeatedly during the hearing: local control, and how adult use legalization would affect the state’s existing medical cannabis patients.
Referencing the Senate bill, Representative Alex Marszalkowski, the second vice chair of the committee, asked Matt Santacroce, the chief of the Office of Cannabis Regulation, “Why should we choose one proposal over the other? Can you speak about why you think yours is better, theirs is worse, stuff like that. Sell me on it.”
Santacroce responded first by saying, “There’s a lot of good stuff in that bill. And we’re very hopeful that we can get together and continue to have that conversation about where the shared areas of agreement are and to the extent that there are differences, how to potentially reconcile those.”
Then, Santacroce turned to what Marszalkowski was “probably driving at,” which is the fact that Article 11 would put an existing entity, the Department of Business Regulation, in charge of licensing, instead of creating a regulatory body, similar to the Massachusetts Cannabis Control Commission, as the Senate bill would.
Doing so, Santacroce said, “takes both time and money.” The current approach to medical cannabis, he said, allows for “regulators to be able to have kind of a candid and interactive relationship with these business owners and the folks driving this industry,” and “Article 11 really aims to leverage that existing governance infrastructure.”
Marszalkowski also asked about the “rationale” for increasing taxes on medical cannabis, and whether it was “penalizing” patients. (Medical use products, though, would be taxed less than those in the adult use market.)
“We fully envision that our existing cultivators are going to be growing product for both medical and adult use markets,” Santacroce said. “These are going to be plants that are grown side by side and being processed and trimmed and packaged in the same facilities. And, you know, it just makes sense as a principle of uniformity and efficiency of tax principles to apply the retail excise tax to both sides of the House, so to speak.”
Rep. Deb Ruggiero asked about the requirement that localities opt-out by referendum, which has emerged as a sticking point for cities and towns. The Rhode Island League of Cities and Towns has submitted written testimony about Article 11 calling instead for opt-out “by Council action.”
Ruggiero said that a special election would “cost cities and towns money” and also raises the possibility that “special interest dollars” will try to sway the outcome. “Why not leave the decision to the local communities on something like that?” she asked.
A major consideration in requiring a referendum, and imposing a deadline soon after adult use is legalized, Santacroce said, is “providing certainty and timely decision making to folks who are trying to set up shop here.” But, he added that the conversation with local leaders is ongoing and that their “points have been very well taken.”
No vote was held.