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No. 178. An act relating to miscellaneous agricultural subjects.
                                     (S.323)
It is hereby enacted by the General Assembly of the State of Vermont:
                           * * * Milk Producers * * *
Sec. 1. 6 V.S.A. § 2752 is amended to read:
§ 2752. REFUSAL TO PURCHASE; HEARING; SECRETARY’S ORDER
   (a) A handler doing business in this State who has a contract either verbal
or written with a producer residing in this State for the purchase of the
producer’s dairy products shall not refuse to purchase them from the producer
except for violations of the sanitary rules or standards applicable to the market
in which the dairy product is sold or marketed, without being deemed guilty of
unfair discrimination. In the event that the refusal is to be based upon reasons
of oversupply or other reasonable grounds, the refusal shall not become
operative until the purchaser has given the producer at least 90 days’ notice of
intention to refuse the producer’s product on these grounds, which shall be
particularly set forth in writing so that the producer may be fully appraised of
the refusal.
   (b) If the producer desires to question the existence or validity of such
grounds of refusal, he or she the producer may do so within 90 days after
receiving the notice or refusal by requesting the Secretary of Agriculture, Food
and Markets for a hearing, and the Secretary is hereby given jurisdiction to
hear and determine the question. The producer shall make complaints of such
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contemplated refusal in writing to the Secretary, setting forth the substance of
the refusal notice and requesting to be heard thereon. The Secretary shall then
notify both the producer and the purchaser in writing, sent to them by
registered mail, of the time and place of hearing thereon. The time of the
hearing shall not be less than 10 nor more than 30 days from the date of the
notice. Hearing shall be informal. Both parties shall have an opportunity to
produce evidence.
                                      ***
   (d) If a request for a hearing is made by a purchaser producer, refusal of the
purchaser shall not become operative until hearing and decision in the
purchaser’s favor by the Secretary.
                                      ***
                * * * Farm-to-School Program Contracts * * *
Sec. 2. 6 V.S.A. § 4721 is amended to read:
§ 4721. LOCAL FOODS GRANT PROGRAM
   (a) There is created in the Agency of Agriculture, Food and Markets the
Rozo McLaughlin Farm-to-School Program to execute, administer, and award
provide local grants or contracts for the purpose of helping Vermont schools
develop farm-to-school programs that will sustain relationships with local
farmers and producers, enrich the educational experience of students, improve
the health of Vermont children, and enhance Vermont’s agricultural economy.
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   (b) A school, a school district, a consortium of schools, a consortium of
school districts, a registered or licensed child care provider, or an organization
administering or assisting the development of farm-to-school programs may
apply to the Secretary of Agriculture, Food and Markets for a grant award or
contract to:
                                      ***
   (c) The Secretaries of Agriculture, Food and Markets and of Education and
the Commissioner of Health, in consultation with farmers, child nutrition staff,
educators, organizations administering or assisting the development of farm-to-
school programs, and farm-to-school technical service providers, jointly shall
adopt procedures relating to the content of the grant application applications or
contract bids and the criteria for making awards.
                                      ***
   (e) No award individual grant or contract shall be greater than 20 percent of
the total annual amount funds available for granting except that a grant an
award to the following entities may, at the discretion of the Secretary of
Agriculture, Food and Markets, exceed the cap:
      (1) Farm-to-School service providers; or
      (2) school districts or consortiums of school districts that completed
merger under 2010 Acts and Resolves No. 153, 2012 Acts and Resolves No.
156, or 2015 Acts and Resolves No. 46 on or before July 1, 2019, provided
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that the grant is funds are used for the purpose of expanding Farm-to-School
projects to additional schools within the new school district.
 * * * Pest Control Compact Repeal and Pesticide Exam Requirements * * *
Sec. 3. REPEAL
   6 V.S.A. chapter 83 (Pest Control Compact) is repealed on July 1, 2026.
Sec. 4. 6 V.S.A. § 1112 is amended to read:
§ 1112. LICENSING PESTICIDE APPLICATORS; PESTICIDE
          COMPANIES; DEALERS
   (a) The Secretary may adopt rules requiring persons selling Class A and B
pesticides to be licensed under this chapter. In addition, the Secretary may
adopt rules requiring companies that hire applicators or conduct pesticide
applications to be licensed and applicators who use pesticides to be certified
under this chapter. The Secretary may establish reasonable requirements for
obtaining licenses and certificates. The fees for dealers, licensed companies,
and applicator certificates under this chapter shall be as follows:
      (1) Class A Dealer License—$50.00;
      (2) Class B Dealer License—$50.00;
      (3) Pesticide Company License—$75.00;
      (4) Commercial and, Noncommercial, and Government Applicator
Certification fee—$30.00 per category or subcategory with a maximum of
$120.00;
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      (5) second and third time examination Examination fee for dealer
licenses and applicator certification—$25.00; and
      (6) Private Applicator—$25.00; and
      (7) State Government, Municipal, and Public Education Institution
Applicators—$30.00.
                                      ***
   (e) There shall be no limitation on the frequency for retaking examinations
for private, commercial, noncommercial, or government applicator
certifications or dealer licenses.
                          * * * Seed Law Changes * * *
Sec. 5. 6 V.S.A. § 641 is amended to read:
§ 641. DEFINITIONS
   (a) As used in this chapter:
      (1) “Agricultural seed” includes grass, forage, cereal, oil, fiber, and
other kinds of crop seeds commonly recognized as agricultural seeds, lawn
seeds, and combinations of such seeds, and may include noxious weed seeds
used as agricultural seed.
      (2) “Secretary” means the Secretary of Agriculture, Food and Markets
or his or her the Secretary’s designee.
      (3) “Agency” means the Agency of Agriculture, Food and Markets.
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      (4) “Flower seed” includes seed of herbaceous plants grown for their
blooms, ornamental foliage, or other ornamental parts and commonly known
and sold under the name of flower or wildflower seed in this State.
                                      ***
Sec. 6. 6 V.S.A. § 644 is amended to read:
§ 644. LABEL REQUIREMENTS FOR AGRICULTURAL, FLOWER, AND
       VEGETABLE SEEDS
   (a) Each container of agricultural, flower, and vegetable seeds that is sold
in this State for sowing purposes shall be labeled.
      (1) All labels shall include:
                                      ***
      (5) All bins and other bulk displays of agricultural, flower, grass, and
vegetable seeds, or mixtures of the described seeds, shall be labeled with the
same information that is required to be on containers of agricultural, flower, or
vegetable seeds as applicable.
                                      ***
Sec. 7. 6 V.S.A. § 647 is amended to read:
§ 647. ADMINISTRATIVE PENALTIES
   (a) The Secretary may assess administrative penalties, not to exceed
$250.00 for each offense, in any case he or she the Secretary determines that a
person has committed any of the following violations:
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      (1) sold seed products without paying the seed inspection fees for
hundredweight tonnage or seed registration fee under section 648 of this title;
      (2) sold seed products within the State of Vermont found deficient in
guarantee analysis and labeling as defined by rule; or
      (3) violated a stop sale order.
                                        ***
                   * * * Consolidate VACP within VEDA * * *
Sec. 8. TRANSFER OF VERMONT AGRICULTURAL CREDIT
          PROGRAM
   10 V.S.A. chapter 16A (Vermont Agricultural Credit Program) is repealed
for the purpose of redesignation as 10 V.S.A. chapter 12, subchapter 16.
Sec. 9. 10 V.S.A. chapter 12, subchapter 16 is added to read:
              Subchapter 16. Vermont Agricultural Credit Program
§ 280hh. DEFINITIONS
   As used in this subchapter:
      (1) “Agricultural facility” means land and rights in land, buildings,
structures, machinery, and equipment that is used for, or will be used for,
producing, processing, preparing, packaging, storing, distributing, marketing,
or transporting agricultural or forest products that have been at least partially
produced in this State, and working capital reasonably required to operate an
agricultural facility.
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      (2) “Agricultural land” means real estate capable of supporting
commercial farming or forestry, or both.
      (3) “Agricultural products” means crops, livestock, forest products, and
other farm or forest commodities produced as a result of farming or forestry
activities.
      (4) “Authority” means the Vermont Economic Development Authority
established under section 213 of this title.
      (5) “Cash flow” means, on an annual basis, all income, receipts, and
revenues of the applicant or borrower from all sources and all expenses of the
applicant or borrower, including all debt service and other expenses.
      (6) “Farm operation” means the cultivation of land or other uses of land
for the production of food, fiber, horticultural crops, silvicultural products,
orchard crops, maple syrup, Christmas trees, forest products, or forest crops;
the raising, boarding, and training of equines, and the raising of livestock; or
any combination of the foregoing activities. “Farm operation” also means the
storage, preparation, retail sale, and transportation of agricultural or forest
commodities accessory to the cultivation or use of such land. “Farm
operation” also means the operation of an agritourism business on a farm
subject to regulation under the Required Agricultural Practices. “Farm
operation” also means a business that provides specialty services to farmers,
such as foresters, farriers, hoof trimmers, or large animal veterinarians
operating or proposing to operate mobile units.
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      (7) “Farm ownership loan” means a loan to acquire or enlarge a farm or
agricultural facility; to make capital improvements, including construction,
purchase, and improvement of farm and agricultural facility buildings, farm
worker housing, or farmer housing that can be made fixtures to the real estate;
to promote soil and water conservation and protection or provide housing; and
to refinance indebtedness incurred for farm ownership or operating loan
purposes, or both.
      (8) “Farmer” means an individual directly engaged in the management
or operation of an agricultural facility or farm operation for whom the
agricultural facility or farm operation constitutes two or more of the following:
          (A) is or is expected to become a significant source of the farmer’s
income;
          (B) the majority of the farmer’s assets; and
          (C) an occupation in which the farmer is actively engaged, either on a
seasonal or year-round basis.
      (9) “Forest products business” means an enterprise that is engaged in
managing, harvesting, trucking, processing, manufacturing, crafting, or
distributing forest products at least partially derived from Vermont forests.
      (10) “Livestock” includes cattle, sheep, goats, equines, fallow deer, red
deer, reindeer, American bison, swine, poultry, pheasant, chukar partridge,
coturnix quail, ferrets, camelids and ratites, cultured trout propagated by
commercial trout farms, and bees.
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      (11) “Loan” means an operating loan or farm ownership loan, including
a financing lease, provided that such lease transfers the ownership of the leased
property to each lessee following the payment of all required lease payments as
specified in each lease agreement.
      (12) “Operating loan” means a loan to purchase livestock, farm or
forestry equipment, or fixtures to pay annual operating expenses of a farm
operation or agricultural facility; to pay loan closing costs; and to refinance
indebtedness incurred for farm ownership or operating loan purposes, or both.
      (13) “Program” means the Vermont Agricultural Credit Program
established by this subchapter.
      (14) “Project” or “agricultural project” means the creation,
establishment, acquisition, construction, expansion, improvement,
strengthening, reclamation, operation, or renovation of an agricultural facility
or farm operation.
§ 280ii. VERMONT AGRICULTURAL CREDIT PROGRAM
   (a) The Vermont Agricultural Credit Program provides an alternative
source of sound and constructive credit to farmers and forest products
businesses who are not having their credit needs fully met by conventional
agricultural credit sources at reasonable rates and terms; or, in the alternative,
the granting of the loan shall serve as a substantial inducement for the
establishment or expansion of an eligible agricultural or forestry project within
the State. The Program is intended to meet, either in whole or in part, the
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credit needs of eligible agricultural facilities and farm and forest operations in
fulfillment of one or more of the purposes listed in this subsection by making
direct loans and participating in loans made by other agricultural credit
providers:
      (1) to encourage diversification, cooperative farming, and the
development of innovative techniques for farming and forest products
businesses;
      (2) to increase energy efficiency and reduce energy consumption in
agricultural facilities, including the construction of water pollution control
facilities that implement best management practices for farm waste abatement
pursuant to 6 V.S.A. chapter 215;
      (3) to encourage innovative and diversified processing, marketing, and
distribution of Vermont agricultural products;
      (4) to assist beginning farmers to start new farms and new agricultural
facilities to commence or strengthen their operations;
      (5) to assist or financially strengthen existing farms; and
      (6) to refinance loans incurred by eligible borrowers for any of the
purposes enumerated in subdivisions (1)–(5) of this subsection.
   (b) No borrower shall be approved for a loan from the Authority that would
result in the aggregate principal balances outstanding of all loans to that
borrower exceeding $5,000,000.00.
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§ 280jj. GENERAL POWERS
   (a) The Authority shall have the powers necessary to carry out the purposes
and provisions of this Program and subchapter, including those general powers
conferred on the Authority in section 216 of this title.
   (b) The Authority shall have the powers necessary to dissolve the Vermont
Agricultural Credit Corporation in accordance with 11B V.S.A. chapter 14.
Upon dissolution of the Vermont Agricultural Credit Corporation, title to all
property owned by the Vermont Agricultural Credit Corporation shall vest in
the Authority.
§ 280kk. LOAN ELIGIBILITY STANDARDS
   A farmer, forest products business, or a limited liability company,
partnership, corporation, or other business entity with a minimum 20 percent
ownership of which is vested in one or more farmers, forest products
businesses, or a nonprofit corporation, shall be eligible to apply for a farm
ownership or operating loan that shall be intended to expand the agricultural
economy or forest economy of the State, provided the applicant is:
         (1) an owner, prospective purchaser, or lessee of agricultural land in the
State or of depreciable machinery, equipment, or livestock to be used in the
State;
         (2) a person of sufficient education, training, or experience in the
operation and management of an agricultural facility or farm operation or
forest products business of the type for which the applicant requests the loan;
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      (3) an operator or proposed operator of an agricultural facility, farm
operation, or forest products business for whom the loan reduces investment
costs to an extent that offers the applicant a reasonable chance to succeed in
the operation and management of an agricultural facility or farm operation;
      (4) a creditworthy person under such standards as the Authority may
establish;
      (5) able to provide and maintain adequate security for the loan by a
mortgage on real property or a security agreement and perfected financing
statement on personal property;
      (6) able to demonstrate that the applicant is responsible and able to
manage responsibilities as owner or operator of the farm operation, agricultural
facility, or forest products business;
      (7) able to demonstrate that the applicant has made adequate provision
for insurance protection of the mortgaged or secured property while the loan is
outstanding;
      (8) a person who possesses the legal capacity to incur loan obligations;
      (9) in compliance with such other reasonable eligibility standards as the
Authority may establish;
      (10) able to demonstrate that the project plans comply with all
regulations of the municipality where it is to be located and of the State of
Vermont;
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      (11) able to demonstrate that the making of the loan will be of public
use and benefit;
      (12) able to demonstrate that the proposed loan will be adequately
secured by a mortgage on real property or by a security agreement on personal
property; and
      (13) able to demonstrate that there will be sufficient projected cash flow
to service a reasonable level of debt, including the loan or loans, being
considered by the Authority.
Sec. 10. 10 V.S.A. § 211(c) is amended to read:
   (c) Therefore, the general public advantage requires:
                                      ***
      (7) low-cost capital to assist Vermont family farmers to farm as
provided in subdivision 272(3) of this title;
                                      ***
Sec. 11. 10 V.S.A. § 212 is amended to read:
§ 212. DEFINITIONS
   As used in this chapter, with the exception of subchapter 16:
                                      ***
Sec. 12. 10 V.S.A. § 216 is amended to read:
§ 216. AUTHORITY; GENERAL POWERS
   The Authority is hereby authorized:
                                      ***
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      (17) To contribute to the capital of the Vermont Agricultural Credit
Corporation Program established pursuant to chapter 16A subchapter 16 of this
title chapter in an amount the Authority determines is necessary and
appropriate.
                                       ***
Sec. 13. 10 V.S.A. § 220a is amended to read:
§ 220a. THE VERMONT JOBS FUND
   (a) There is hereby created the Vermont Jobs Fund, hereinafter called the
Fund, which shall be used by the Authority as a nonlapsing fund for the
purposes of this chapter. To it shall be charged all operating expenses of the
Authority not otherwise provided for and all payments of interest and principal
required to be made by the Authority under this subchapter. To it shall be
credited any appropriations made by the General Assembly for the purposes of
this chapter and all payments required to be made to the Authority under this
chapter, it being the intent of this section that the Fund shall operate as a
revolving fund whereby all appropriations and payments made thereto may be
applied and reapplied for the purposes of this chapter. Monies in the Fund may
be loaned at interest rates to be set by the Authority for the following:
                                       ***
   (b) Monies in the Fund may be loaned to the Vermont Agricultural Credit
Program to support its lending operations as established in chapter 16A of this
title at interest rates and on terms and conditions to be set by the Authority to
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establish a line of credit in an amount not to exceed $100,000,000.00 to be
advanced to the Vermont Agricultural Credit Program to support its lending
operations as established in chapter 16A of this title.
   (c)(b) Monies in the Fund may be loaned to the Vermont Small Business
Development Corporation to support its lending operations as established
pursuant to subdivision 216(14) of this title at interest rates and on terms and
conditions to be set by the Authority.
   (d)(c) Monies in the Fund may be loaned to the Vermont 504 Corporation
to support its lending operations as established pursuant to subdivision 216(13)
of this title at interest rates and on terms and conditions to be set by the
Authority.
   (e)(d) The Authority may loan money from the Fund to the Vermont
Sustainable Energy Loan Fund established under subchapter 13 of this chapter
at interest rates and on terms and conditions set by the Authority.
Sec. 14. 10 V.S.A. § 280a is amended to read:
§ 280a. ELIGIBLE PROJECTS; AUTHORIZED FINANCING PROGRAMS
   (a) The Authority may develop, modify, and implement any existing or
new financing program, provided that any specific project that benefits from
such program shall meet the criteria contained in the Vermont Sustainable Jobs
Strategy outlined in section 280b of this title. These programs may include:
                                         ***
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      (12) loans to agricultural enterprises or endeavors administered by the
Authority under chapter 16A subchapter 16 of this title chapter and any
programs created thereunder.
                                     ***
                          * * * Hemp Oversight * * *
Sec. 15. TRANSITION OF HEMP PROCESSOR OVERSIGHT
   6 V.S.A. chapter 34 (hemp) is repealed.
Sec. 16. 7 V.S.A. chapter 31, subchapter 3 is added to read:
                               Subchapter 3. Hemp
§ 851. FINDINGS; PURPOSE
   (a) Findings. The General Assembly finds that the federal legal status of
most hemp products will be contingent upon an amendment to 7 U.S.C.
§ 1639o, to take effect in November 2026, pursuant to the Continuing
Appropriations, Agriculture, Legislative Branch, Military Construction and
Veterans Affairs, and Extensions Act of 2026, Pub. L. No. 119-37. The
legality of hemp and hemp products in interstate commerce is unsettled and
continues to evolve.
   (b) Purpose. The purpose of this subchapter is to unify oversight of
cannabis and hemp-derived cannabinoids under the Cannabis Control Board to
more effectively prohibit illicit cannabis and cannabis product trade while
positioning growers and processors of nonintoxicating hemp products to take
advantage of national market opportunities that may exist. The purpose of this
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subchapter is also to support small-business hemp producers and processors in
taking advantage of opportunities for the cultivation and sale of hemp and
hemp products.
§ 852. DEFINITIONS
   As used in this subchapter:
      (1)(A) “Grow” means:
            (i) planting, cultivating, harvesting, or drying of hemp; and
            (ii) selling, storing, and transporting of hemp grown by a grower.
          (B) “Grow” also means to produce.
      (2) “Grower” means a person who is registered with the Board and the
U.S. Department of Agriculture to produce hemp. “Grower” also means
producer.
      (3) “Hemp” means the plant Cannabis sativa L. and any part of the
plant, including the seeds and all derivatives, extracts, cannabinoids, acids,
salts, isomers, and salts of isomers, whether growing or not, with the federally
defined tetrahydrocannabinol concentration level of hemp. Hemp is
considered an agricultural commodity.
      (4)(A) “Hemp product” or “hemp-infused product” means any product
with the federally defined tetrahydrocannabinol concentration level for hemp
derived from, or made by, processing hemp plants or plant parts, that is
prepared in a form available for commercial sale, including cosmetics,
personal care products, food intended for animal or human consumption, cloth,
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cordage, fiber, fuel, paint, paper, construction materials, plastics, and any
product containing one or more hemp-derived cannabinoids, such as
cannabidiol.
          (B) Notwithstanding subdivision (A) of this subdivision (4), “hemp
product” and “hemp-infused product” do not include any substance,
manufacturing intermediary, or product that:
            (i) is prohibited or deemed a regulated cannabis product by
administrative rule of the Board; or
            (ii) is not lawful in interstate commerce.
          (C) A hemp-derived product or substance that is excluded from the
definition of “hemp product” or “hemp-infused product” pursuant to
subdivision (B) of this subdivision (4) is considered a cannabis product as
defined by subdivision 831(3) of this title; provided, however, that a person
duly licensed or registered by the Board lawfully may possess such products in
conformity with the person’s active hemp processor license.
      (5) “Process” means the storing, drying, trimming, handling,
compounding, or converting of hemp by a processor for a single grower or
multiple growers into hemp products or hemp-infused products. “Process”
includes:
          (A) transporting, aggregating, or packaging hemp from a single
grower or multiple growers; or
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          (B) manufacturing hemp products or hemp-infused products from
hemp concentrate.
      (6) “Processor” means a person who is licensed by the Board to process
hemp. A retail establishment selling hemp products or hemp-infused products
is not a processor.
§ 853. HEMP; AN AGRICULTURAL PRODUCT
   (a) Hemp is an agricultural product that may be grown as a crop produced,
possessed, marketed, and commercially traded in Vermont pursuant to the
provisions of this chapter and administrative rules of the Cannabis Control
Board.
   (b) The cultivation of hemp shall be subject to and comply with the
Required Agricultural Practices adopted under 6 V.S.A. § 4810, as amended.
§ 854. HEMP REGISTRATION AND LICENSURE
   (a) Producers. All persons engaged in the production of hemp shall register
with the Board as growers and shall provide their location, the nature of their
activities, and evidence that those activities conform to the requirements of
federal law and regulation. A person shall apply for registration or renewal of
registration on a form provided by the Board. The application shall be
accompanied by the fee required under section 858 of this subchapter.
   (b) Processors. All persons engaged in the processing of hemp, including
trade in hemp-derived cannabinoids and process intermediaries, shall be
licensed by the Board. A person shall apply for a license or renewal of a
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license on a form provided by the Board. The application shall be
accompanied by the fee required under section 858 of this subchapter.
   (c) Products. All hemp-derived products containing or reasonably expected
to contain more than 0.4 mg tetrahydrocannabinol shall be registered with the
Board prior to sale to any person within this State. A person shall apply for
registration or renewal of registration on a form provided by the Board. The
application shall be accompanied by the fee required under section 858 of this
subchapter.
   (d) All applicants. The Board may deny an application for licensure,
registration, or renewal if the applicant:
      (1) fails to establish that its activities comply with State and federal law;
      (2) refuses the Board or its lawful designees entry upon its premises to
inspect and confirm compliance, including by sampling hemp and hemp
products for potency testing;
      (3) fails to submit information requested by the Board; or
      (4) fails to submit the fee required under section 858 of this subchapter.
§ 855. RULEMAKING AUTHORITY
   (a) The Board may adopt rules to provide for the implementation of this
subchapter, which may include rules to:
      (1) require hemp to be tested during growth for tetrahydrocannabinol
levels;
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      (2) authorize or specify the method or methods of testing hemp,
including, where appropriate, the ratio of cannabidiol to tetrahydrocannabinol
levels or a taxonomic determination using genetic testing;
      (3) require inspection and supervision of hemp during sowing, growing
season, harvest, storage, processing, and distribution;
      (4) require labels or label information for hemp products in order to
provide consumers with transparent and accurate product content or source
information, to be free of false or misleading claims and claims contrary to the
Federal Food, Drug, and Cosmetic Act, 21 U.S.C. §§ 301–399i, or to conform
with federal requirements;
      (5) establish sanitary requirements for licensed processing facilities;
      (6) establish registration requirements for hemp-derived products sold or
distributed in the State, including requirements that each product be sampled
and tested by a laboratory recognized by the Board;
      (7) require disclosure or labeling of the amount of cannabinoids known
to be present in hemp products sold or distributed in the State;
      (8) require that licensees and registrants, including out-of-state
purveyors of registered hemp products, obtain and maintain commercially
reasonable insurance, which for producers of consumer products in final form
shall include product liability insurance;
      (9) prohibit hazardous additives to hemp products, or specify additive
limits, relative to substances that are toxic, not generally recognized as safe, or
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designed to make the product more addictive or more appealing to persons
under 21 years of age or to mislead consumers;
      (10) specify when a registered hemp product that contains more than 0.4
mg tetrahydrocannabinol must be restricted for sale to persons 21 years of age
or older or restricted for sale in specified settings, or both;
      (11) define “craft processors” as a class of small businesses with
different needs and risks and exempt craft processor licensees from the
requirements of this subchapter that the Board finds to be unnecessary to
protect the public health, safety, and welfare;
      (12) waive or reduce licensing fees for craft processor applicants
pursuant to rule or readily accessible policy;
      (13) exempt certain product categories from the requirement to register
under this chapter;
      (14) establish requirements for the consumer sale of any product
containing tetrahydrocannabinol or other cannabinoids; or
      (15) prohibit any person from making false, misleading, or
unsubstantiated claims for cannabinoid-containing products.
   (b) The Board shall adopt rules to:
      (1) establish requirements for the licensure of processors of hemp,
hemp-derived process intermediaries, and hemp products; and
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      (2) regulate the use of processing facilities and equipment to permit
processors to use the same equipment for hemp and cannabis processing and to
prevent cross contamination between hemp and cannabis.
§ 856. TEST RESULTS; ENFORCEMENT
   (a) When notified that hemp, a hemp product, or a hemp-infused product
has a tetrahydrocannabinol concentration exceeding the applicable federally
defined tetrahydrocannabinol concentration level of hemp, the person licensed
or registered with the Board to grow or process the hemp shall arrange for
disposal, remediation, or destruction of the hemp, hemp product, or hemp-
infused product in a manner consistent with applicable State and federal law.
   (b) To enforce the provisions of this subchapter, the Board, upon
presenting appropriate credentials, may conduct one or more of the following:
      (1) Enter upon any premises where hemp is grown or processed and
inspect premises, machinery, equipment and facilities, all hemp during any
growth phase, or any hemp product or hemp-infused product during processing
or storage. Inspection under this section may include taking samples,
inspecting records, and inspecting equipment or vehicles used to grow,
process, or transport hemp, hemp products, or hemp-infused products.
      (2) Inspect any retail location offering hemp products or hemp-infused
products. Inspection under this section may include taking samples of such
products.
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         (3) Issue and enforce a written or printed “stop sale” order to the owner
or custodian of any hemp, hemp product, or hemp-infused product subject to
the requirements of this subchapter or rules adopted under this subchapter that
the Board finds is in violation of any of the provisions of this subchapter or
rules adopted under this subchapter. An order may prohibit further sale,
processing, and movement of the hemp, hemp product, or hemp-infused
product until the Board has approved and issued a release from the “stop sale”
order.
            (A) This order shall include the reason for issuance, a description of
the hemp or hemp products at issue, instructions to separate all hemp or hemp
products subject to the order, and any recommended measures to remedy the
basis or bases for the order.
            (B) A person issued a “stop sale” order may appeal that order to the
Board within 15 days after receipt. The person shall file any appeal by serving
a letter on the Board, which shall state all grounds for the appeal and identify
the hemp or hemp products affected by the appeal.
§ 857. ADMINISTRATIVE PENALTIES
   (a) The Board may assess violations and administrative penalties against
persons licensed or registered pursuant to this subchapter, as well as persons
required to be licensed or registered pursuant to this subchapter who fail to
obtain or maintain required credentials.
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   (b) The compliance and enforcement authorities and procedures applicable
to cannabis establishments shall apply to persons licensed or registered under
this subchapter.
   (c) The Board may enforce a final administrative penalty by filing a civil
collection action in any Superior Court.
§ 858. FEES
   (a) The following fees shall apply to each license or registration application
or each annual license or registration renewal under this subchapter:
      (1) Producer: $50.00.
      (2) Processor: $500.00.
      (3) Product: $75.00.
   (b) Notwithstanding subsection (a) of this section, the Board may issue
longer 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.
Sec. 16a. HEMP FEES REPORTING
   On or before January 15, 2027, the Cannabis Control Board shall submit to
the House Committees on Agriculture, Food Resiliency, and Forestry, on
Ways and Means, and on Government Operations and Military Affairs and the
Senate Committees on Agriculture, on Finance, and on Economic
Development, Housing and General Affairs a report that includes the following
information:
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      (1) a summary of all hemp fees in effect in fiscal year 2027, including
any waivers, reductions, or alterations to the hemp fee schedule as set forth in
7 V.S.A. § 858;
      (2) a summary of the revenue derived from each fee in fiscal year 2026;
      (3) a comparison of fees in other jurisdictions;
      (4) an analysis of policies or trends that might affect the viability of the
fee amount; and
      (5) a recommendation regarding how the hemp fee schedule as set forth
in 7 V.S.A. § 858 may be adjusted to better promote the intent of the General
Assembly to better support small-business hemp producers and processors.
Sec. 16b. REPEAL
   7 V.S.A. § 855(a)(12) (waiving or reducing licensing fees for craft
processors) is repealed on January 1, 2028.
Sec. 17. 18 V.S.A. § 4201(15) is amended to read:
      (15)(A) “Cannabis” means all parts of the plant Cannabis sativa L.,
except as provided by subdivision (B) of this subdivision (15), whether
growing or harvested, and includes:
             (i) the seeds of the plant;
             (ii) the resin extracted from any part of the plant; and
             (iii) any compound, manufacture, salt, derivative, mixture, or
preparation of the plant, its seeds, or resin.
          (B) “Cannabis” does not include:
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              (i) the mature stalks of the plant and fiber produced from the
stalks;
              (ii) oil or cake made from the seeds of the plant;
              (iii) any compound, manufacture, salt, derivative, mixture, or
preparation of the mature stalks, fiber, oil, or cake;
              (iv) the sterilized seed of the plant that is incapable of
germination; or
              (v) hemp or hemp products, as defined in 6 V.S.A. § 562 7 V.S.A.
§ 852.
Sec. 18. 32 V.S.A. § 7811(b) is amended to read:
   (b) The tax established in this section shall not be imposed on:
      (1) cannabis-related supplies sold by a dispensary registered under
7 V.S.A. chapter 37 to registered patients and registered caregivers, as those
terms are defined in 7 V.S.A. § 972;
      (2) cannabis products, as defined in 7 V.S.A. § 831, that do not contain
tobacco; or
      (3) hemp or hemp products, as defined in 6 V.S.A. § 562 7 V.S.A.
§ 852, that do not contain tobacco.
Sec. 19. 7 V.S.A. § 845 is amended to read:
§ 845. CANNABIS REGULATION FUND
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   (a) There is established the Cannabis Regulation Fund, which shall be
managed in accordance with 32 V.S.A. chapter 7, subchapter 5. The Fund
shall be maintained by the Cannabis Control Board.
   (b) The Fund shall be composed of:
      (1) all State application fees, annual license fees, renewal fees, and civil
penalties collected by the Board pursuant to chapters chapter 31 (cannabis);
chapter 33 (cannabis establishments); and chapter 37 (medical cannabis
dispensaries) of this title;
                                       ***
Sec. 20. 7 V.S.A. § 834 is added to read:
§ 834. SALES RESTRICTIONS
   (a) As used in this section, “unregistered hemp” or “unregistered cannabis”
means a product required by State law or rule of the Cannabis Control Board to
be registered with the Cannabis Control Board, including a product derived
from the unregistered hemp or unregistered cannabis, that is not registered on
the date a transaction occurs.
   (b) No person shall cause unregistered hemp or unregistered cannabis
purchased by mail or through a computer network, telephonic network, or
other electronic network to be shipped to anyone other than a licensed cannabis
laboratory in this State.
   (c) No person shall, with knowledge or reason to know of the violation,
provide substantial assistance to a person in violation of this section.
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   (d) A violation of this section is punishable as follows:
      (1) A knowing or intentional violation of this section shall be punishable
by imprisonment for not more than five years or a fine of not more than
$5,000.00, or both.
      (2) In addition to or in lieu of any other civil or criminal remedy
provided by law, upon a determination that a person has violated this section,
the Attorney General may impose a civil penalty in an amount not to exceed
$5,000.00 for each violation. For purposes of this subsection, each shipment
or transport of unregistered hemp or unregistered cannabis shall constitute a
separate violation.
      (3) The Attorney General may seek an injunction to restrain a threatened
or actual violation of this section.
      (4) In any action brought pursuant to this section, the State shall be
entitled to recover the costs of investigation, expert witness fees, the action,
and reasonable attorney’s fees.
      (5) A person who violates this section engages in an unfair and
deceptive trade practice in violation of the State’s Consumer Protection Act,
9 V.S.A. §§ 2451 et seq.
      (6) If a court determines that a person has violated the provisions of this
section, the court shall order any profits, gain, gross receipts, or other benefit
from the violation to be disgorged and paid to the State Treasurer for deposit in
the General Fund.
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      (7) Unless otherwise expressly provided, the penalties or remedies, or
both, under this section are in addition to any other penalties and remedies
available under any other law of this State.
        * * * Natural Resources Conservation Council Mortgages * * *
Sec. 21. 10 V.S.A. § 723 is amended to read:
§ 723. POWERS OF SUPERVISORS
   The supervisors shall have the following powers:
                                      ***
      (5) To obtain options upon and to acquire by purchase, exchange, lease,
gift, grant, or bequest, any property, real or personal; to maintain, administer
and improve any properties acquired; to receive income from the properties
and to expend the income in carrying out the purposes and provisions of this
chapter; and to borrow money, mortgage, sell, lease, or otherwise dispose of
any of its property or interests in property in furtherance of the purposes and
the provisions of this chapter, provided however, that real estate shall not be
mortgaged, and provided however, that the sale, lease, or other disposition of
real property of the district is approved by the written consent of the governor;
                                      ***
                   * * * CAFO Permit Working Group * * *
Sec. 22. 10 V.S.A. § 1354 is added to read:
§ 1354. CONCENTRATED ANIMAL FEEDING OPERATION PERMIT
          PROGRAM WORKING GROUP
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  (a) Creation. The Secretary of Natural Resources, in coordination with the
Secretary of Agriculture, Food and Markets, shall convene a working group of
interested parties to provide advice and recommendations on the
implementation of and transition to the Concentrated Animal Feeding
Operation (CAFO) permit required under section 1353 of this title.
  (b) Membership. The working group shall be composed of the following:
     (1) five livestock farmers who are in good standing, appointed by the
Speaker of the House as follows:
          (A) one representative of the Champlain Valley Farmer Coalition;
          (B) one representative of the Franklin and Grand Isle Farmers
Watershed Alliance;
          (C) one representative of the Connecticut River Watershed Farmers
Alliance;
          (D) one representative of the Vermont Dairy Producers Alliance; and
          (E) one representative of farmers from the Northeast Kingdom;
     (2) three agricultural technical service providers, appointed by the
Governor;
     (3) three representatives from the environmental advocate community,
appointed by the Committee on Committees; and
     (4) the executive director or designee from the Vermont Association of
Conservation Districts.
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   (c) Assistance. The Agency of Natural Resources and the Agency of
Agriculture, Food and Markets shall participate in the working group on an
advisory and administrative capacity but shall not have appointed members on
the working group and shall not be required to submit reports to the General
Assembly. The working group shall have the administrative, technical, and
legal assistance of the Agency of Natural Resources.
   (d) Meetings.
      (1) The Secretary of Natural Resources shall call the first meeting of the
working group to occur on or before November 1, 2026.
      (2) The working group shall select co-chairs from among its members at
the first meeting. One of the co-chairs shall represent livestock farmers, and
one co-chair shall represent the environmental advocate community.
      (3) A majority of the membership of the working group shall constitute
a quorum.
      (4) The working group shall meet at least quarterly, or more frequently
at the request of the co-chairs or at the request of the Secretary of Natural
Resources.
      (5) The working group’s meetings shall be open to the public in
accordance with 1 V.S.A. chapter 5, subchapter 2. Notwithstanding 1 V.S.A.
§ 313, the working group may go into executive session in order to discuss a
circumstance or an event regarding a specific farm or regarding a possible
CAFO permit violation by a specific farm.
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   (e) Report. The working group annually shall report to the House
Committees on Agriculture, Food Resiliency, and Forestry and on
Environment and the Senate Committees on Agriculture and on Natural
Resources and Energy. The report may take the form of testimony to
committees from members of the working group.
   (f) Definition. As used in this section, “good standing” means a farmer
subject to the requirement of this subchapter or to the requirements of 6 V.S.A.
chapter 215 and who:
      (1) does not have an active enforcement violation that has reached a
final order with the Secretary of Natural Resources or the Secretary of
Agriculture, Food and Markets; and
      (2) is in compliance with the terms of any current grant agreement or
contract with the Agency of Natural Resources or the Agency of Agriculture,
Food and Markets.
Sec. 23. CONCENTRATED ANIMAL FEEDING OPERATION;
          TRAINING ON INSPECTION
   (a) On or before March 1, 2027, the Secretary of Natural Resources shall
contract with a third-party consultant to:
      (1) assist the Secretary in the development of standards and procedures
to be used by the Agency of Natural Resources and the Agency of Agriculture,
Food and Markets when inspecting Concentrated Animal Feeding Operations
(CAFOs) as required by 10 V.S.A. chapter 47, subchapter 3A; and
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      (2) provide training to the Agency of Natural Resources and Agency of
Agriculture, Food and Markets staff on implementation of inspection of
CAFOs. Farmers who qualify for a CAFO permit may voluntarily attend
training sessions.
   (b) When the Secretary of Natural Resources and the Secretary of
Agriculture, Food and Markets commence inspections of CAFOs under
10 V.S.A. chapter 47, subchapter 3A, the third-party consultant shall
accompany the Agency of Natural Resources’ inspectors on 10 inspections to
ensure compliance with the inspection standards developed under subsection
(a) of this section.
Sec. 24. CONTINGENCY OF FUNDING
   The duty to implement Sec. 23 of this act (Concentrated Animal Feeding
Operation; training on inspection) is contingent upon an appropriation of funds
in fiscal year 2027 from the General Fund to the Agency of Natural Resources
for the specific purposes described in Sec. 23 of this act.
        * * * Farm and Forestry Operations Security Special Fund * * *
Sec. 24a. 6 V.S.A. § 4643(e) is amended to read:
   (e) All administratively complete applications shall be evaluated by the
Review Board. Within 15 days following receipt of an administratively
complete application, the Review Board by majority vote shall recommend to
the Secretary whether to issue a payment to the applicant. If the Review Board
recommends an award under this section, the The Secretary shall issue the
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award make a final award determination within 15 days following the date of
the Review Board’s recommendation.
          * * * Permitting Large and Medium Farm Operations * * *
Sec. 24b. 6 V.S.A. § 4851(i) is amended to read:
   (i) A Beginning on July 1, 2026, a person required to obtain a permit under
this section shall submit not be required to pay an annual operating fee of
$2,500.00 to the Secretary. During any calendar year in which a person has an
active Large Concentrated Animal Feeding Operation permit issued by the
Agency of Natural Resources pursuant to the federal Clean Water Act and pays
the required associated fee, that person shall not be required to pay the
$2,500.00 annual operating fee described in this section. The fees collected
under this section shall be deposited in the Agricultural Water Quality Special
Fund under section 4803 of this title.
Sec. 24c. 6 V.S.A. § 4858(e) is amended to read:
   (e) Operating fee. A Beginning on July 1, 2026, a person required to
obtain a permit or coverage under this section shall submit not be required to
pay an annual operating fee of $1,500.00 to the Secretary. The fees collected
under this section shall be deposited in the Agricultural Water Quality Special
Fund under section 4803 of this title.
                           * * * Effective Dates * * *
Sec. 25. EFFECTIVE DATES
   (a) Secs. 15–20 (hemp oversight) shall take effect on passage.
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  (b) All other sections shall take effect on July 1, 2026.
Date Governor signed bill: June 18, 2026
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