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No. 176. An act relating to cannabis.
                                     (S.278)
It is hereby enacted by the General Assembly of the State of Vermont:
                          * * * Packaging Limit * * *
Sec. 1. [Deleted.]
                         * * * Transaction Limit * * *
Sec. 2. 7 V.S.A. § 907 is amended to read:
§ 907. RETAILER LICENSE
                                      ***
   (b) In a single transaction, a retailer may provide one ounce two ounces of
cannabis or the equivalent in cannabis products, or a combination thereof, to a
person 21 years of age or older upon verification of a valid government-issued
photograph identification card.
                                      ***
Sec. 3. 18 V.S.A. § 4230 is amended to read:
§ 4230. CANNABIS
   (a) Possession and cultivation.
      (1) No person shall knowingly and unlawfully possess more than one
ounce two ounces of cannabis or more than five 10 grams of hashish or
cultivate more than two mature cannabis plants or four immature cannabis
plants. A person who violates this subdivision shall be assessed a civil penalty
as follows:
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                                      ***
      (2)(A) No person shall knowingly and unlawfully possess more than
two ounces or more of cannabis or ten 10 grams or more of hashish or more
than three mature cannabis plants or six immature cannabis plants. For a first
offense under this subdivision (2), a person shall be provided the opportunity
to participate in the Court Diversion Program unless the prosecutor states on
the record why a referral to the Court Diversion Program would not serve the
ends of justice. A person convicted of a first offense under this subdivision
shall be imprisoned not more than six months or fined not more than $500.00,
or both.
                                      ***
Sec. 4. 18 V.S.A. § 4230a is amended to read:
§ 4230a. CANNABIS POSSESSION BY A PERSON 21 YEARS OF AGE
           OR OLDER
   (a)(1) Except as otherwise provided in this section, a person 21 years of age
or older who possesses one ounce two ounces or less of cannabis or five 10
grams or less of hashish and two mature cannabis plants or fewer or four
immature cannabis plants or fewer or who possesses paraphernalia for
cannabis use shall not be penalized or sanctioned in any manner by the State or
any of its political subdivisions or denied any right or privilege under State
law. The one-ounce two-ounce limit of cannabis or five 10 grams of hashish
that may be possessed by a person 21 years of age or older shall not include
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cannabis cultivated, harvested, and stored in accordance with section 4230e of
this title.
                                      ***
                     * * * Event Permit; Pilot Program * * *
Sec. 5. 7 V.S.A. § 912 is added to read:
§ 912. EVENT PERMIT
   (a) Authorization. The Board may grant event permits to licensed cannabis
retail establishments in good standing. The holder of an event permit is
authorized to oversee and administer a commercial event pursuant to this
section and procedures adopted by the Board. No cannabis or cannabis
products shall be consumed at an event authorized by this section.
   (b) Eligibility. A licensed cannabis retail establishment is eligible to apply
for an event permit, provided that the establishment submits a fee and
application demonstrating to the Board’s satisfaction:
       (1) that the establishment has received written approval from the local
cannabis control commission created pursuant to 7 V.S.A. § 863, or the
municipal legislative body if no local cannabis control commission exists,
which may include conditions and limitations appropriate to protect the public,
manage traffic, and abate nuisance;
       (2) a security plan to ensure that intoxicated persons or persons under
21 years of age cannot access the space subject to the permit, that the premises
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are secured from diversion or inversion, and that the premises lawfully may be
used for the purpose intended;
      (3) a product sale plan that describes quantities and types of cannabis
and cannabis products that will be offered for sale and how the cannabis will
be transported, monitored, secured, displayed, and sold in conformity with
State law and Board rule;
      (4) capacity to administer and enforce the required plans, and
confirmation that the applicant has secured the services of a county law
enforcement agency or private security provider licensed pursuant to 26 V.S.A.
chapter 59, if required by the Board;
      (5) proof of commercially reasonable insurance for the proposed event;
and
      (6) compliance with any other health and safety requirements that the
Board may prescribe for the particular event or event location, including limits
on attendees.
   (c) Restrictions. Annually, the Board shall issue not more than ten permits
for public events. An event permit shall be issued only for events being held at
locations within a municipality that has voted affirmatively to permit the
operation of cannabis retail establishments. An event permit shall be valid for
a single event not to exceed 24 hours held at a single access-controlled
location. An event permit shall not be issued for a location at which alcoholic
beverages are sold or furnished for on-premises consumption. A cannabis
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retailer that holds an event permit shall not conduct sales at the licensed retail
location and the permitted event contemporaneously, except for sales
conducted from a permitted event location that is contiguous with the licensed
retail location. The holder of an event permit shall sell only registered adult-
use cannabis and cannabis products at the event.
   (d) Noncompliance; penalties. Deviation from security and sales plans,
product tracking and taxation requirements, or permit terms shall be a violation
subject to adverse licensing action consistent with Board rules.
   (e) Fee. Cannabis retail establishments shall be assessed a fee of $500.00
to apply for an event permit, of which 50 percent shall be distributed to the
host municipality and 50 percent shall be deposited in the Cannabis Regulation
Fund.
   (f) Procedures. The Board shall adopt procedures pursuant to 3 V.S.A.
§ 835 to govern the event permits issued pursuant to this section, including
application procedures and associated forms, the permittee selection process,
security requirements, and event site restrictions.
        (1) For each procedure proposed to be adopted or amended pursuant to
this section, the Board shall publish the proposed procedure on the Board’s
website and hold not fewer than two public hearings at which members of the
public may seek additional information or submit oral or written comments
concerning the proposed procedure.
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      (2) The Board shall not be required to initiate rulemaking pursuant to
3 V.S.A. § 831(c) in relation to a procedure adopted pursuant to this section. A
procedure adopted pursuant to this section shall have the force of law and be
binding on all persons who apply for and hold an event permit pursuant to this
section.
Sec. 6. [Deleted.]
Sec. 7. 32 V.S.A. § 7902 is amended to read:
§ 7902. CANNABIS EXCISE TAX
                                      ***
   (b) The tax imposed by this section shall be paid by the purchaser to the
retailer or integrated licensee holder of an event permit. Each retailer or
integrated licensee permit holder shall collect from the purchaser the full
amount of the tax payable on each taxable sale.
                                      ***
Sec. 8. 32 V.S.A. § 7904 is amended to read:
§ 7904. RETURNS; RECORDS
   (a) Any retailer or integrated licensee holder of an event permit required to
collect the tax imposed by this chapter shall, on or before the 25th day of every
month, return to the Department of Taxes, under oath of a person with legal
authority to bind the retailer or integrated licensee permit holder, a statement
containing its name and place of business, the total amount of sales subject to
the cannabis excise tax made in the preceding month, and any information
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required by the Department of Taxes, along with the total tax due. Retailers
and integrated licensees permit holders shall not remit the tax collected to the
Department of Taxes in cash absent the issuance of a waiver by the
Commissioner of Taxes, and the Commissioner may require that returns be
submitted electronically.
   (b) Every retailer and integrated licensee permit holder shall maintain, for
not less than three years, accurate records showing all transactions subject to
tax liability under this chapter. The records are subject to inspection by the
Department of Taxes at all reasonable times during normal business hours.
Sec. 9. 32 V.S.A. § 7906 is amended to read:
§ 7906. LICENSE
   (a) Any retailer or integrated licensee holder of an event permit required to
collect tax imposed by this chapter must apply for and receive a cannabis retail
tax license from the Commissioner for each place of business within the State
where he or she the retailer or permit holder sells cannabis or cannabis
products prior to commencing business. The Commissioner shall issue
without charge a license, or licenses, empowering the retailer or integrated
licensee permit holder to collect the cannabis excise tax, provided that a
retailer’s or integrated licensee’s permit holder’s application is properly
submitted and the retailer or integrated licensee permit holder is otherwise in
compliance with applicable laws, rules, and provisions.
                                      ***
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Sec. 10. CANNABIS CONTROL BOARD; RULES AND REPORT
   (a) On or before July 1, 2027, the Cannabis Control Board shall initiate
rulemaking pursuant to 3 V.S.A. chapter 25 to adopt rules governing the event
permit established in Sec. 5 of this act.
   (b) On or before November 15, 2027, the Cannabis Control Board shall
submit a written report to the House Committee on Government Operations
and Military Affairs and the Senate Committee on Economic Development,
Housing and General Affairs concerning the event permit established in Sec. 5
of this act. The report shall include a concise assessment of the benefits,
challenges, and administrative viability of the event permit program. The
Board may recommend best practices for security, inventory tracking, tax
enforcement, permit administration, local government coordination, and
optimizing market access for small cultivators. The Board shall recommend
updates to the statute governing event permits, including whether the statute
should be repealed on the date set by this act.
                         * * * Outdoor Cultivator Fees * * *
Sec. 10a. 7 V.S.A. § 910 is amended to read:
§ 910. CANNABIS ESTABLISHMENT FEE SCHEDULE
   The following fees shall apply to each person or product licensed by the
Board:
      (1) Cultivators.
          (A) Outdoor cultivators.
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            (i) Outdoor cultivator tier 1. Outdoor cultivators with up to 1,000
square feet of plant canopy or fewer than 125 cannabis plants in an outdoor
cultivation space shall be assessed an annual licensing fee of $750.00 $375.00.
            (ii) Outdoor cultivator tier 2. Outdoor cultivators with up to 2,500
square feet of plant canopy in an outdoor cultivation space shall be assessed an
annual licensing fee of $1,875.00 $925.00.
            (iii) Outdoor cultivator tier 3. Outdoor cultivators with up to
5,000 square feet of plant canopy in an outdoor cultivation space shall be
assessed an annual licensing fee of $4,000.00 $2,000.00.
            (iv) Outdoor cultivator tier 4. Outdoor cultivators with up to
10,000 square feet of plant canopy in an outdoor cultivation space shall be
assessed an annual licensing fee of $8,000.00 $4,000.00.
            (v) Outdoor cultivator tier 5. Outdoor cultivators with up to
20,000 square feet of plant canopy in an outdoor cultivation space shall be
assessed an annual licensing fee of $18,000.00 $9,000.00.
            (vi) Outdoor cultivator tier 6. Outdoor cultivators with up to
37,500 square feet of plant canopy in an outdoor cultivation space shall be
assessed an annual licensing fee of $34,000.00.
                                      ***
                        * * * Municipal Authority * * *
Sec. 11. 7 V.S.A. § 863 is amended to read:
§ 863. REGULATION BY LOCAL GOVERNMENT
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   (a)(1) Prior to a cannabis retailer or the retail portion of an integrated
licensee operating within a municipality, the municipality shall affirmatively
permit the operation of such cannabis establishments by majority vote of those
present and voting by Australian ballot at an annual or special meeting warned
for that purpose. A municipality may place retailers or integrated licensees, or
both, on the ballot for approval.
      (2) A vote to permit the operation of a licensed cannabis retailer or
integrated licensee within the municipality shall remain in effect until
rescinded by majority vote of those present and voting by Australian ballot at a
subsequent annual or special meeting warned for that purpose. A rescission of
the permission to operate a licensed cannabis retailer or integrated licensee
within the municipality under this subdivision shall not apply to a licensed
cannabis retailer or integrated licensee that is operating within the municipality
at the time of the vote.
                                       ***
        * * * Distribution of Local License Fees to Municipalities * * *
Sec. 12. 7 V.S.A. § 846 is amended to read:
§ 846. FEES; AUTHORITY
                                       ***
   (c) Distribution to municipalities. After reduction for costs of
administration and collection, the Board shall pay local license fees on a
quarterly an annual basis to the municipality for which the fees were collected.
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Sec. 12a. 7 V.S.A. § 847 is amended to read:
§ 847. APPEALS
                                      ***
   (e) The Board may enforce a final administrative penalty by filing a civil
collection action in any Superior Court.
             * * * Two-Year Employee Identification Cards * * *
Sec. 13. 7 V.S.A. § 910 is amended to read:
§ 910. CANNABIS ESTABLISHMENT FEE SCHEDULE
   The following fees shall apply to each person or product licensed by the
Board:
                                      ***
      (8) Employees. Cannabis establishments licensed by the Board shall be
assessed an annual a biennial licensing fee of $50.00 $100.00 for each
employee. Employee licenses shall be valid for two years.
      (9) Products. Cannabis establishments licensed by the Board shall be
assessed an annual product licensing fee of $50.00 for every type of cannabis
and cannabis product that is sold in accordance with this chapter. The Board
may issue longer product registrations, prorated at the same cost per year, for
products it deems low-risk and shelf-stable. The products may be defined and
distinguished in readily accessible published guidance.
                                      ***
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              * * * Repeal of Integrated License Provisions * * *
Sec. 14. 7 V.S.A. § 861 is amended to read:
§ 861. DEFINITIONS
   As used in this chapter:
                                       ***
      (8) “Cannabis establishment” means a cannabis cultivator, propagation
cultivator, wholesaler, product manufacturer, retailer, or testing laboratory, or
integrated licensee licensed by the Board to engage in commercial cannabis
activity in accordance with this chapter.
                                       ***
      (24) “Integrated licensee” means a person licensed by the Board to
engage in the activities of a cultivator, wholesaler, product manufacturer,
retailer, and testing laboratory in accordance with this chapter. [Repealed.]
                                       ***
Sec. 15. 7 V.S.A. § 866 is amended to read:
§ 866. YOUTH
                                       ***
   (c) The Board, in consultation with the Department of Health, shall adopt
rules in accordance with section 881 of this title to:
                                       ***
      (3) require that cannabis products sold by licensed retailers and
integrated licensees are contained in child-resistant packaging; and
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      (4) require that cannabis and cannabis products sold by licensed retailers
and integrated licensees are packaged with labels that clearly indicate that the
contents of the package contain cannabis and should be kept away from
persons under 21 years of age.
                                      ***
Sec. 16. 7 V.S.A. § 881 is amended to read:
§ 881. RULEMAKING; CANNABIS ESTABLISHMENTS
   (a) The Board shall adopt rules to implement and administer this chapter in
accordance with subdivisions (1)–(8) of this subsection.
                                      ***
      (2)(A) Rules concerning cultivators shall include:
                                      ***
            (v) labeling requirements for cannabis sold to retailers and
integrated licensees, including health warnings developed in consultation with
the Department of Health;
                                      ***
      (7) Rules concerning integrated licensees shall include the provisions
provided in subdivisions (1)-(6) of this subsection and any additional
provisions the Board deems appropriate for safe regulation of integrated
licensees in accordance with this chapter. [Repealed.]
      (8) Rules concerning propagators shall include:
                                      ***
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          (E) labeling requirements for cannabis sold to retailers and integrated
licensees;
                                        ***
Sec. 17. 7 V.S.A. § 901 is amended to read:
§ 901. GENERAL PROVISIONS
                                        ***
   (d)(1) There shall be seven six types of licenses available:
                                        ***
          (E) a retailer license; and
          (F) a testing laboratory license; and
          (G) an integrated license.
                                        ***
      (3)(A) Except as provided in subdivisions (B) and (C) of this
subdivision (3), an applicant and its affiliates may obtain a maximum of one
type of each type of license as provided in subdivisions (1)(A)–(F) of this
subsection (d). Each license shall permit only one location of the
establishment.
          (B) An applicant and its affiliates that control a dispensary registered
on April 1, 2022 may obtain one integrated license provided in subdivision
(1)(G) of this subsection (d) or a maximum of one of each type of license
provided in subdivisions (1)(A)–(F) of this subsection (d). An integrated
licensee may not hold a separate cultivator, propagator, wholesaler, product
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manufacturer, retailer, or testing laboratory license, and no applicant or its
affiliates that control a dispensary shall hold more than one integrated license.
An integrated license shall permit only one location for each of the types of
activities permitted by the license: cultivation, propagator, wholesale
operations, product manufacturing, retail sales, and testing. [Repealed.]
                                       ***
   (e) A dispensary that obtains a retailer license or an integrated license
pursuant to this chapter shall maintain the dispensary and retail operations in a
manner that protects patient and caregiver privacy in accordance with rules
adopted by the Board.
                                       ***
Sec. 18. 7 V.S.A. § 904 is amended to read:
§ 904. CULTIVATOR LICENSE
   (a) A cultivator licensed under this chapter may:
      (1) cultivate, process, package, label, transport, test, and sell cannabis to
a licensed wholesaler, product manufacturer, retailer, integrated licensee, and
dispensary;
                                       ***
      (3) possess and sell cannabis products to a licensed wholesaler, product
manufacturer, retailer, integrated licensee, and dispensary.
                                       ***
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Sec. 19. 7 V.S.A. § 904a is amended to read:
§ 904a. SMALL CULTIVATORS
                                       ***
   (d) Upon licensing, a small cultivator may sell cannabis to a licensed
dispensary at any time for sale to patients and caregivers pursuant to the
dispensary license or to the public pursuant to an integrated license, including
the time period before retail sales are permitted for licensed cannabis retailers.
Sec. 20. 7 V.S.A. § 910 is amended to read:
§ 910. CANNABIS ESTABLISHMENT FEE SCHEDULE
   The following fees shall apply to each person or product licensed by the
Board:
                                       ***
      (6) Integrated licensees. Integrated licensees shall be assessed an annual
licensing fee of $100,000.00. [Repealed.]
                                       ***
Sec. 21. 7 V.S.A. § 974 is amended to read:
§ 974. RULEMAKING
   (a)(1) The Board shall adopt rules to implement and administer this
chapter. In adoption of rules, the Board shall strive for consistency with rules
adopted for cannabis establishments pursuant to chapter 33 of this title where
appropriate.
      (2) Rules shall include:
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                                      ***
          (U) labeling requirements for cannabis sold to retailers and integrated
licensees, including health warnings developed in consultation with the
Department of Health;
                                      ***
Sec. 22. 7 V.S.A. § 987 is amended to read:
§ 987. CANNABIS BUSINESS DEVELOPMENT FUND
  (a) There is established the Cannabis Business Development Fund, which
shall be managed in accordance with 32 V.S.A. chapter 7, subchapter 5.
  (b) The Fund shall comprise:
     (1) a one-time contribution of $50,000.00 per integrated license to be
made on or before October 15, 2022; and [Repealed.]
                                      ***
Sec. 23. [Deleted.]
    * * * Household Income; Cannabis Business Expenses Deduction * * *
Sec. 24. 32 V.S.A. § 6061 is amended to read:
§ 6061. DEFINITIONS
  As used in this chapter unless the context requires otherwise:
                                      ***
     (5) “Modified adjusted gross income” means “federal adjusted gross
income”:
                                      ***
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            (F) With the inclusion of any federal deduction or credit that the
claimant would have been allowed for the cultivation, testing, processing, or
sale of cannabis or cannabis products as authorized under 7 V.S.A. chapter 33
or 37, but for 26 U.S.C. § 280E.
                                      ***
   * * * Outdoor Cannabis Cultivation; Use Value Appraisal Program * * *
Sec. 25. 7 V.S.A. § 869 is amended to read:
§ 869. CULTIVATION OF CANNABIS; ENVIRONMENTAL AND LAND
       USE STANDARDS; REGULATION OF CULTIVATION
                                      ***
   (f) Notwithstanding subsection (a) of this section, a cultivator licensed
under this chapter who initiates cultivation of cultivates cannabis outdoors on a
parcel of land as defined in rule by the Cannabis Control Board pursuant to
section 881 of this chapter shall:
                                      ***
      (3) be eligible to enroll in the Use Value Appraisal Program under
32 V.S.A. chapter 124 for the cultivation of cannabis;
      (4) be exempt under 32 V.S.A. § 9741(3), (25), and (50) from the tax on
retail sales imposed under 32 V.S.A. § 9771; and
                                      ***
Sec. 26. 32 V.S.A. § 3102 is amended to read:
§ 3102. CONFIDENTIALITY OF TAX RECORDS
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                                      ***
   (e) The Commissioner may, in the Commissioner’s discretion and subject
to such conditions and requirements as the Commissioner may provide,
including any confidentiality requirements of the Internal Revenue Service,
disclose a return or return information:
                                      ***
       (25) To the Cannabis Control Board for the purposes of administering
the cannabis excise tax under chapter 207 of this title, the sales and use tax
under chapter 233 of this title, and the exemptions to those taxes.
                                      ***
                 * * * Cannabis Cultivator Cooperatives * * *
Sec. 27. 7 V.S.A. § 904c is added to read:
§ 904c. CANNABIS CULTIVATOR COOPERATIVE CORPORATIONS
   Licensed cannabis cultivators may form a cannabis cultivator cooperative
corporation pursuant to 11 V.S.A. chapter 7 in the same manner as other
associations or persons engaged in the production of the agricultural or
handcraft products.
                      * * * Commercial Cannabis Compact * * *
Sec. 27a. COMMERCIAL CANNABIS COMPACT; INTENT
   The General Assembly finds that the medical and commercial cannabis
industry has grown significantly throughout the United States since Vermont
transitioned to a recreational cannabis market in 2022. The General Assembly
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further finds that recent statements from federal officials, including provisions
of Executive Order 14370, 90 F.R. 60541, “Increasing Medical Marijuana and
Cannabidiol Research,” indicate a shifting federal posture on regulated
cannabis markets. Accordingly, it is the intent of the General Assembly to
prepare for the possibility of regional or interstate cannabis markets by
authorizing the Governor to form agreements with other states that have
commercial cannabis markets.
Sec. 27b. 7 V.S.A. § 834 is added to read:
§ 834. COMMERCIAL CANNABIS COMPACT
   (a) As used in this section:
      (1) “Agreement” means an agreement relating to commercial cannabis
authorized pursuant to this section and entered into between this State and
another state or states.
      (2) “Contracting state” means a state of the United States, including a
district, commonwealth, territory, or possession subject to the legislative
authority of the United States, with which the Governor has entered into an
agreement pursuant to this section.
      (3) “Foreign licensee” means the holder of a cannabis license issued
pursuant to the laws of another state that has entered into an agreement
pursuant to this section.
      (4) “Vermont license” means a cannabis license issued by the Board.
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   (b) The Governor is authorized to enter into an agreement with another
state or states authorizing medical or commercial cannabis activity, or both,
between entities licensed under the laws of the contracting state and entities
operating with a Vermont license, provided that:
      (1) the commercial cannabis activities are lawful and subject to
licensure under the laws of the contracting state; and
      (2) with respect to the interstate transportation of cannabis or cannabis
products, the agreement prohibits the following:
          (A) the transportation of cannabis and cannabis products by any
means other than those authorized under the laws of the contracting state and
the regulations of the Board; and
          (B) the transportation of cannabis and cannabis products through the
jurisdiction of a state, district, commonwealth, territory, or possession of the
United States that does not authorize that transportation.
   (c) Notwithstanding any other law, a foreign licensee may engage in
commercial cannabis activity with a Vermont licensee and a Vermont licensee
may engage in commercial cannabis activity with a foreign licensee, subject to
the requirements and limitations set forth in this section.
   (d) A foreign licensee shall not engage in commercial cannabis activity
within the boundaries of this State without a Vermont license, or engage in
commercial cannabis activity within a local jurisdiction without proper
authorization issued by the local jurisdiction.
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   (e) An agreement shall require that the contracting state impose
requirements on foreign licensees with regard to cannabis and cannabis
products to be sold or otherwise transferred or distributed within this State that
meet or exceed the requirements applicable to Vermont licensees, including:
      (1) enforceable public health and safety standards that are equivalent to
the requirements of the Board;
      (2) mandatory participation in a system administered by this State to
regulate and track cultivation, manufacturing, distribution, transportation, sale,
and destruction of cannabis and cannabis products from seed to sale;
      (3) standards for testing of cannabis or cannabis products that meet or
exceed the standards applicable to testing laboratories licensed by the Board;
      (4) requirements for the packaging and labeling of cannabis and
cannabis products that meet or exceed the packaging and labeling requirements
established pursuant to Board rules;
      (5) requirements for quality assurance and inspection of cannabis or
cannabis products that meet or exceed the requirements applicable to cannabis
or cannabis products cultivated, manufactured, or sold by Vermont licensees;
      (6) restrictions on marketing, labeling, and advertising within this State
by foreign licensees that meet or exceed the restrictions of Vermont licensees
pursuant to this title; and
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      (7) a process for identification of adulterated or misbranded cannabis
products, and the destruction of those products, using standards that meet or
exceed the standards and procedures adopted by the Board.
   (f) An agreement shall require that the contracting state impose restrictions
upon advertising, marketing, labeling, or sale within the contracting state that
meet or exceed restrictions established pursuant to this title and the rules
adopted by the Board.
   (g) An agreement shall provide for collection of all taxes applicable to the
medical or commercial cannabis activity.
   (h) An agreement shall include provisions requiring the Board and any
other appropriate regulatory authorities of the contracting state to address
public health and welfare emergencies concerning cannabis or cannabis
products that are sold or intended for sale within this State, including for
prompt recall or embargo of adulterated or misbranded cannabis products.
   (i) An agreement shall include provisions requiring appropriate regulatory
authorities of each state to investigate instances of alleged noncompliance with
the commercial cannabis regulatory rules and regulations upon request by the
other state and in accordance with mutually agreed-upon procedures. An
agreement shall include provisions requiring the contracting state to reasonably
cooperate with this State’s investigations concerning foreign licensees and
requiring the Board to reasonably cooperate with investigations by the
contracting state concerning persons or entities holding Vermont licenses.
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   (j) An agreement shall include appropriate provisions reflecting Board
programs and efforts to promote the inclusion and support of individuals and
communities in the cannabis industry who are linked to populations and
neighborhoods that were negatively or disproportionately impacted by
cannabis criminalization.
   (k) Prior to the execution of an agreement or amendment to an agreement,
the Governor shall:
      (1) Submit the proposed agreement or amendments to the Board and the
Joint Fiscal Committee for review and comment. The Board and Committee
shall have 60 days to review the proposed agreement or amendment and to
submit written recommendations to the Governor. The Governor shall
consider all recommendations submitted by the Board and Committee and may
revise the proposed agreement or amendment to incorporate the
recommendations. If the Governor does not incorporate any recommendations,
the Governor shall set forth, in writing, the reasons for not incorporating the
recommendations.
      (2) Post the proposed agreement or amendment on the Governor’s and
Board’s internet websites for public comment for 30 days. The Governor shall
consider any comments received.
   (l) An agreement entered into pursuant to this section shall not take effect
unless one of the following occurs:
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      (1) federal law is amended to allow for the interstate transfer of cannabis
or cannabis products between authorized commercial cannabis businesses;
      (2) federal law is enacted that specifically prohibits the expenditure of
federal funds to prevent the interstate transfer of cannabis or cannabis products
between authorized commercial cannabis businesses;
      (3) the U.S. Department of Justice issues an opinion or memorandum
allowing or tolerating the interstate transfer of cannabis products between
authorized commercial cannabis businesses; or
      (4) the Attorney General issues a written opinion that implementation of
agreements entered into under this section will not result in significant legal
risk to this State based on review of federal judicial decisions and
administrative action.
   (m) The Board shall notify the Governor and the General Assembly upon
the occurrence of an event described in subsection (l) of this section and shall
post the notification on the Board’s website.
   (n) The Board may adopt emergency rules pursuant to 3 V.S.A. § 844
governing the procedures for admission of a foreign licensee to conduct
commercial cannabis activities within the State. Notwithstanding 3 V.S.A.
§ 844(b), the Board’s emergency rules shall be effective for one year from the
date of adoption. Within 90 days after adopting the emergency rules, the
Board shall report to the House Committee on Government Operations and
Military Affairs and the Senate Committee on Economic Development,
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Housing and General Affairs concerning its recommendations for necessary
updates to Vermont’s cannabis laws and a proposal for permanent rules
governing commercial cannabis activities subject to an agreement.
Sec. 28. [Deleted.]
                              * * * Repeals * * *
Sec. 29. REPEALS
   (a) 7 V.S.A. § 909 (integrated license) is repealed on July 1, 2026.
   (b) 7 V.S.A. § 862 (cannabis establishment chapter not applicable to hemp
or therapeutic use of cannabis) is repealed on July 1, 2026.
   (c) 7 V.S.A. § 912 (cannabis event permit) is repealed on July 1, 2028.
  * * * Residential Rental Agreements; Prohibiting Restrictions on Cannabis
                            Possession or Use * * *
Sec. 30. 9 V.S.A. § 4468b is added to read:
§ 4468b. RENTAL AGREEMENTS; CANNABIS RESTRICTIONS
          PROHIBITED
   A rental agreement shall not contain a provision that prohibits a tenant from
possessing cannabis or cannabis products within the rental premises or using
cannabis or cannabis products within a dwelling unit, except that a rental
agreement may prohibit the use of lighted cannabis or cannabis products
intended for inhalation within the rental premises. This section shall not apply
to any rental agreements that are required by federal law to prohibit the
possession or use of cannabis within the rental premises.
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Sec. 31. 18 V.S.A. § 4230a is amended to read:
§ 4230a. CANNABIS POSSESSION BY A PERSON 21 YEARS OF AGE
           OR OLDER
                                       ***
   (b)(1) Cannabis possessed or consumed in violation of State law is
contraband pursuant to subsection 4242(d) of this title and subject to seizure
and forfeiture.
      (2) This section does not:
                                       ***
           (E) prohibit a landlord from banning possession or use of lighted
cannabis or cannabis products intended for inhalation in a lease agreement; or
                                       ***
                            * * * Effective Dates * * *
Sec. 32. EFFECTIVE DATES
   (a) This section shall take effect on passage.
   (b) Notwithstanding 1 V.S.A. § 214, Sec. 24 (household income; cannabis
business expenses deduction) shall take effect retroactively on January 1, 2025,
for household income received beginning in the 2025 calendar year and shall
apply to property tax credit claims filed on and after January 1, 2026.
   (c) Sec. 10a (cannabis establishment fee schedule) shall take effect on July
1, 2027.
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  (d) Sec. 13 (cannabis establishment fee schedule) shall take effect on July
1, 2027.
  (e) All other sections shall take effect on July 1, 2026.
Date Governor signed bill: June 18, 2026
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