The Vermont House of Representatives on Wednesday gave initial approval to legislation that would legalize adult-use marijuana sales, paving the way for a potential $130 million-$160 million market within five years of launching, according to Marijuana Business Daily estimates.

The state House endorsed the measure by a vote of 90-54. The state Senate earlier passed the measure 23-5.

Gov. Phil Scott would need to sign the bill into law, which is not a sure bet.

A number of legislative steps remain before the bill goes to Scott, including a final House vote and resolving taxation and other differences between the House and Senate versions.



Final approval would make Vermont the third state in the Northeast to establish a full-fledged recreational marijuana program, after Massachusetts and Maine.

Pressure has been building for other states in the Northeast to legalize adult-use cannabis.

The Vermont measure calls for the state to license retail stores by July 2021.

Scott, a Republican, is a wild card.

The governor indicated he will sign the measure only if it addresses his concerns – such as protecting public safety.

The Senate bill calls for a 16% tax on retail sales, with an option for municipalities that host retailers to impose a 2% local tax. The House measure calls for a 20% tax on retail sales, with no special local option tax.

Proposed recreational marijuana taxes are comparable to Massachusetts and Oregon, and lower than in California and Washington state.

The legislation in general seeks to give licensing preference to Vermont residents, existing medical marijuana operators, women and minorities, and environmentally responsible businesses.

In 2018, Vermont became the first state in the country to legalize adult-use marijuana through its Legislature.

But that measure, which Scott reluctantly signed, was limited to home grow and didn’t permit retail sales. Thus, business opportunities were limited.

Here are some key business aspects to the House and Senate versions of the current measure:

  • A state Cannabis Control Board would regulate and license retailers, cultivators, manufacturers, wholesalers, testing labs and vertically integrated licenses. Lawmakers would restrict a business entity to just one license in each of the categories and just one location for each of those categories. This provision is designed to prevent market domination by a few companies.
  • Vermont would also limit existing medical marijuana operators to only one vertically integrated license.
  • Licensing priority would go to existing medical marijuana dispensaries, small growers, Vermont-controlled entities, women- and minority-owned businesses, applicants with environmentally sustainable plans, and businesses with plans to hire minorities. Some priority applicants could obtain technical and business assistance.
  • Vermont would cap cannabis flower at 30% THC, and solid concentrates at 60% THC. The state would not allow oils, apart from cartridges for vape pens. These restrictions wouldn’t apply to medical cannabis or home cultivation.
  • The state also would prohibit vape cartridges that contain flavors not naturally occurring in cannabis.

MJBizDaily Research Editor Eli McVey contributed to this report.

Jeff Smith can be reached at [email protected]