Rhode Island Senators Approve Revised Marijuana Legalization Bill, With House Action Expected Imminently

A key Rhode Island Senate committee approved a revised marijuana legalization bill on Wednesday, with a vote on the identical House companion version expected in a separate panel later this evening.

The Senate Judiciary Committee voted 9-1 to advance the bill to the floor, where it is expected to receive a vote by the full body on Tuesday. Meanwhile, the House Finance Committee is scheduled to consider a companion measure shortly, after which point it will also move to the floor of that chamber.

Sen. Joshua Miller (D) and Rep. Scott Slater (D) are sponsoring the proposal, a revised version of which was unveiled on Tuesday. The lawmakers worked for months with stakeholders and the office of Gov. Dan McKee (D), who released his own legalization measure as part of a budget proposal in January, to reach a deal on various provisions.

The basic components of the new substitute amendment are consistent with an earlier version of bill as introduced and considered during earlier committee hearings in March, but there were key changes made concerning issues such as expungements, regulatory appointments, licensing authority and the timeline for implementation.

Here’s what the revised marijuana legalization proposal would accomplish: 

Adults 21 and older could purchase and possess up to one ounce of cannabis and grow up to six plants (only three of which could be mature) for personal use.

The allowable possession limit for marijuana stored in a given household would be maxed out at 10 ounces.

The state would automatically expunge prior marijuana possession convictions for amounts now being made legal by July 1, 2024, but those who petition the court for relief would have their cases expedited.

Regulatory responsibility would be shared by a new independent Cannabis Control Commission (CCC) and a Cannabis Office under the Department of Business Regulation (DBR). A new advisory board would also assist.

The governor would be responsible for making appointments to the CCC.

Adult-use marijuana sales would be subject to the state’s seven percent sales tax, a 10 percent excise tax and a local three percent tax for municipalities that allow cannabis businesses to operate.

For the initial rollout, a total of 33 marijuana retailers could be licensed. Twenty-four of those licenses would be new standalone adult-use retailers, divided up equally between six geographic zones of the state, and nine other hybrid licenses could be approved for existing medical cannabis dispensaries if they pay a $125,000 fee for the privilege to add recreational sales.

Of the 24 standalone retailers, 25 percent would need to go to social equity applicants and another 25 percent would be for worker-owned cooperatives.

No single entity would be allowed to possess more than one business license, but people could invest in multiple companies.

Approved hybrid licensees could start to grow and manufacture marijuana for adult consumers starting August 1, 2022.

Adult-use sales would start on December 1, 2022.

Possession of more than one ounce but up to two ounces for adults 18 and older would be decriminalized, with people facing a civil penalty without the threat of jail time.

Part of the money collected from cannabis licensing fees would support a new “Social Equity Assistance Fund.”

The fund would “provide assistance to applicants from communities disproportionately impacted by prohibition of cannabis,” according to an earlier summary.

Equity business applicants would need to meet one of several criteria to qualify, including at least 51 percent ownership by people who have resided in a disproportionately impacted area for five of the past 10 years, 51 percent ownership by people who have faced arrests or convictions over offenses that would qualify for expungements under the law or having income that does not exceed 400 percent of the median income in a disproportionately impacted area for five of the past 10 years.

A business that has at least 10 employees, with at least 51 percent residing in disproportionally impacted areas or who have been arrested or convicted for an expungable offense offense under the bill would also qualify as would being able to demonstrate significant experience in types of businesses that promote economic development.

There would be a two-year moratorium on licensing additional cultivators beyond those that are already operating for the medical cannabis market.

Regulators would also be responsible for setting limits on “cannabis product serving sizes, doses, and potency, including, but not limited to, regulations which provide requirements for reasonable tetrahydrocannabinol (THC) potency limits for each type of cannabis product sold by a licensee and reasonable potency or dosing limits for cannabis concentrates and edible products, that shall apply for adult use cannabis only.”

Local municipalities could opt out of allowing marijuana retailers with voter approval via ballot referendums, but not if they currently have medical cannabis compassion centers operating in their jurisdiction. They could also set their own rules on public consumption through ordinances.

The bill also removes fees for medical cannabis plant tags and patient IDs once adult-use sales start.

Miller, who sponsored an earlier legalization proposal that was approved in the Senate last year, previously said that lawmakers “made our best attempt” to get the provisions right, and he stressed his openness to feedback from colleagues and stakeholders.

In a statement on Tuesday, the governor’s office thanked lawmakers for “their collaboration on this legislation.”

“While this bill is different than the Governor’s original proposal—it does accomplish his priorities of making sure legalization is equitable, controlled, and safe,” a McKee spokesperson said. “We look forward to reviewing the final bill that comes out of the General Assembly and signing legalization of adult use cannabis into law.”

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Both Senate President Dominick Ruggerio (D) and House Speaker Joseph Shekarchi (D) have said they are comfortable with the move toward legalization, and they’ve weighed in on various provisions related to issues like equity in the industry and the regulatory model for a cannabis market. But they’ve also said they’re comfortable with the gradual pace of the reform and don’t want to rush the legislative process.

Shekarchi said that while he feels reform is “inevitable” in Rhode Island and bound to happen “soon,” he wanted to take time to work with lawmakers on reaching a workable deal.

The governor is supportive of legalization and proposed his own reform plan this year as part of his requested budget. Some of the initial differences between the lawmaker-led legislation and the governor’s measure were resolved in the latest substitute amendment, and there were compromises made in other areas.

For example, McKee’s plan called for automatic expungements without a requirement for people to petition the court for relief. The compromise that lawmakers landed on was to provide automatic record sealing by a certain date while creating an expedited process for those who proactively petitioned for relief.

The governor also proposed having DBR be the sole regulatory body for the marijuana market. The agency would share that responsibility with an independent commission under the revised bill.

Lawmakers did not change their mind about permitting limited home cultivation for personal use, however, even though McKee’s measure would not allow home grow.

Under the governor’s plan, 25 percent of marijuana tax revenue and licensing fees would go to the “regulatory, public health, and public safety costs associated with adult-use cannabis.” Fifteen percent would go to local governments and 60 percent would go to the state general fund.

The executive summary of McKee’s budget proposal says that the state’s sales tax revenue would be “boosted by the proposed introduction of adult-use cannabis tax revenue in FY 2023.” The state is estimating that it will collect $1.2 million in general revenue for the 2023 fiscal year and $16.9, “with a full year of sales in FY 2024.”

The revenue projections and provisions largely reflect what the governor proposed in his last budget request, with the exception of the expungements language.

Not only does the governor’s plan not allow for home grow, it also sets out a series of fines and penalties for personal cultivation of any number of plants. For example, a person who unlawfully grows one to five plants would face a penalty of $2,000 per plant and an “order requiring forfeiture and/or destruction of said plants,” according to the text of the proposed legislation.

The bill also includes language to create a Cannabis Reinvestment Task Force that would be required to study and issue recommendations on using marijuana tax revenue for “job training, small business access to capital, affordable housing, health equity, and neighborhood and community development.”

The proposal calls for 25 marijuana retailers to be licensed each year for the first three years of implementation. Those would be awarded on a lottery basis, but at least five would be specifically given to minority-owned businesses, a category. Additional licenses would be issued in the future based on market demand.

The House Finance Committee discussed the governor’s proposal to end prohibition at an earlier hearing last year.

A coalition of 10 civil rights and drug policy reform advocacy groups—including the Rhode Island chapters of the ACLU and NAACP—had demanded that lawmakers move ahead with enacting marijuana reform in the state before the end of 2021. But that did not pan out.

Lawmakers have also noted that neighboring states like Connecticut and Massachusetts have enacted legalization, and that adds impetus for the legislature to pursue reform in the state.

Both the governor and the leaders’ legalization plans are notably different than the proposal that former Gov. Gina Raimondo (D) had included in her budget in 2020. Prior to leaving office to join the Biden administration as commerce secretary, she called for legalization through a state-run model.

McKee gave initial insights into his perspective on the reform last January, saying that “it’s time that [legalization] happens” and that he’s “more leaning towards an entrepreneurial strategy there to let that roll that way.”

Meanwhile, Rhode Island lawmakers introduced a pair of drug decriminalization bills in March—including one focused on psilocybin and buprenorphine that would authorize doctors to prescribe the psychedelic mushroom.

Last year, the governor also signed a historic bill to allow safe consumption sites where people could use illicit drugs under medical supervision and receive resources to enter treatment.

The Senate Judiciary Committee also held a hearing last year on legislation that would end criminal penalties for possessing small amounts of drugs and replace them with a $100 fine.

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Photo courtesy of Chris Wallis // Side Pocket Images.