Senator Joshua Miller and Senate Majority Leader Michael J. McCaffrey today unveiled legislation to create a comprehensive tax and regulatory structure that legalizes cannabis in the State of Rhode Island. If enacted, a Cannabis Control Commission would oversee a competitive and accessible licensing structure that would generate tax revenue through the sales tax, a special sales tax, and a local sales tax.
“Cannabis legalization is a monumental shift in public policy that effectively creates a new economy,” said Senator Josh Miller, who also chairs the Senate Committee on Health and Human Services. “We want to ensure as many Rhode Islanders as possible have the opportunity to participate in this new economy. That is why we set low, tiered licensing fees and we are also calling for the creation of a Cannabis Equity Fund to help individuals who have been directly and indirectly impacted by our past policy of prohibition.”
The Commission would be a five-member, full-time board tasked with overseeing the licensing of four aspects of the cannabis supply chain: cultivation, manufacturing, retail, and testing. To prevent monopolization of the new market, no business entity would be allowed to possess more than one license. The legislation also creates the Cannabis Equity Fund to provide technical and grant assistance to qualified individuals and a fee-free mandatory expungement process for individuals with marijuana related offenses.
“Cannabis legalization is as much about reconciliation as it is revenue,” said Senate Majority Leader Michael J. McCaffrey. “The Justice Reinvestment prison reform initiative showed that policies of prohibition have disproportionately impacted communities of color, and I believe we must ensure any effort to legalize cannabis recognizes and rectifies those wrongs. Low barriers to entry, expungement reform, and broad access to programs designed to increase access for individuals and communities impacted by the failed War on Drugs are an important and necessary component.”
The legislation, which will be vetted in the Senate Judiciary Committee, legalizes the possession of up to one ounce of marijuana by individuals over the age of 21. It also allows for home grow comparable to neighboring Massachusetts. Cannabis consumption would be prohibited in public places, and unsealed containers would be prohibited from the passenger areas of a car.
In addition to the three percent local sales tax and the state’s regular sales tax, a cannabis sales tax of 10 percent would apply. Licensing fees range from as low as $100 for a small cultivator’s license, $5,000 for manufacturers and testing entities’ licenses, and up to $20,000 for the largest cultivators and retailers.
Once passed, the Cannabis Control Commission would be empowered to establish rules and regulations for the state’s cannabis market and tasked to vet applicants. Retail licenses would be capped at one license per 10,000 residents per municipality, but every community would be eligible for at least three retail licenses. While cities and towns would have the opportunity to opt-out through voter referendum, in doing so they would forgo their opportunity to garner a three percent local tax collected at point of sale. Communities could pass local ordinances to regulate the time, place, and manner of cannabis operators; however, local communities could not impose any additional fees or contingencies.
“We want to provide cities and towns with the ability to opt-out, but we cannot allow an overly burdensome patchwork of regulation throughout our state,” said Leader McCaffrey. “We know from experiences in other states that less parochialism and lower fees leads to greater transparency and a more competitive market. If a community wants to opt-out and forgo tax revenue that is one thing, but we also need to make sure the process is open and transparent.”
“We have worked for many years to develop and improve legislation that implements a cannabis tax and regulatory structure,” said Senator Miller. “Over the years, I have sponsored legislation and led commissions, and we have all learned from the experiences in other states. The approach we are taking is not just about tax revenue. It’s about rectifying past wrongs and opening new opportunities. And it’s about smarter drug policy. Prohibition clearly didn’t work, and is next to impossible with the availability legal cannabis just over the state border. I’m excited to be introducing this legislation today and look forward to the hearing process.”
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