In an historic vote Tuesday, the Rhode Island Senate approved legislation to legalize, tax and regulate marijuana.
It is the first time legislation to legalize cannabis for recreational use has reached the floor of either legislative chamber in Rhode Island, marking a major milestone in the 11-year effort of the its sponsor, Sen. Joshua Miller, a Cranston Democrat.
At the request of Senate President Dominick J. Ruggerio, Miller and Majority Leader Michael McCaffrey worked to craft legislation that creates a comprehensive tax and regulatory structure to legalize cannabis.
The bill would create a commission to oversee a competitive and accessible licensing structure that would generate tax revenue through a special marijuana sales tax, and a local sales tax that is remitted back to the community where the point of sale occurred.
“Cannabis legalization is a monumental shift in public policy that effectively creates a new economy,” Miller said. “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, although an investor could bankroll more than one endeavor. The legislation also would create a free expungement process for people with marijuana-related offenses.
“Cannabis legalization is as much about reconciliation as it is revenue,” McCaffrey said.
The vote passed 29-9. Jamestown’s senator, Dawn Euer, supported the measure.
The legislation legalizes the possession of up to 1 ounce of marijuana by people over the age of 21. It also allows for growing at home 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 3 percent, local sales tax and the state’s regular sales tax, a tax of 10 percent would apply. Licensing fees range from $100 for a small cultivator’s license, to $5,000 for manufacturers and testing entities’ licenses, and up to $20,000 for the largest cultivators and retailers. New licenses would be available after July 1, 2023.
If passed, the 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 20,000 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 referendums, in doing so they would forgo their opportunity to garner 3 percent local tax collected at point of sale. Communities could pass local ordinances to regulate the time, place, and manner of cannabis operators, but local communities could not impose any additional fees or contingencies.
“Under the status quo, with cannabis readily available, Rhode Island must address all the societal costs, but we have no regulatory framework and no associated revenue stream,” Ruggerio said. “The longer we wait to open a cannabis marketplace, the further behind we fall from a competitive standpoint.”