Cannabis legalization bill introduced
Bill includes social equity components
STATE HOUSE – Sen. Joshua Miller and Rep. Scott A. Slater today introduced a comprehensive bill to legalize, regulate and tax recreational cannabis sales in Rhode Island.
The legislation (2022-S 2430, 2022-H 7593) would legalize the sale and possession of up to 1 ounce of cannabis for those age 21 and up, with no more than 10 ounces for personal use kept in a primary residence, effective Oct. 1. It would also allow Rhode Islanders to grow a small amount of their own cannabis at home.
“The time for Rhode Island to move forward with cannabis legalization is now. This historic shift in public policy will create a vibrant new marketplace in our state and end the failed practice of prohibition, which has caused such harm to so many in our communities. To help address those past wrongs, and to ensure all Rhode Islanders have the opportunity to share the economic benefits associated with legalization, equity is a central focus of this legislation,” said Senator Miller (D-Dist. 28, Cranston, Providence), chairman of the Senate Health and Human Services Committee.
The bill establishes a 10% state cannabis excise tax in addition to the 7% sales tax, plus a 3% local tax for the municipality where the sale takes place. It creates an independent three-member cannabis control commission, which would eventually also assume oversight of medical marijuana, which is currently under the purview of the Department of Business Regulation (DBR). It also establishes a cannabis advisory board and a cannabis office within DBR.
It allows up to 33 retail licenses distributed in six zones statewide, including nine compassion centers that could potentially be hybrid recreational and medical retailers.
The legislation includes measures to address social equity to reduce barriers to participation for those communities that have long been disproportionately affected by cannabis prohibition. It uses licensing fees and penalties to fund technical assistance and grants to applicants and communities that have been impacted, and reserves one license in each of the six districts for a social equity licensee and another in each district for a co-op. The legislation also creates a process for individuals to request expungement of prior convictions for misdemeanor and felony cannabis possession for amounts that have been decriminalized.
“It is the right public policy for Rhode Island to make cannabis possession and sales legal. We have been studying legalization proposals here for many years, and we now can look to our neighboring states’ experiences and see that taxing and regulating cannabis makes sense,” said Representative Slater (D-Dist. 10, Providence). “I’m especially proud that we have made a very deliberate effort to address social equity through this bill. We have to recognize the harm that prohibition has done to communities, particularly minorities and poor, urban neighborhoods, and ensure that those communities get the support they need to benefit from legalization.”
Leaders emphasized that the proposal is only the starting point for the legislative process, during which the bill will doubtlessly undergo changes.
“I would like to thank Representative Scott Slater, who has worked tirelessly on this legislation,” said House Speaker K. Joseph Shekarchi. “I want to emphasize that the bill introduced today is not the final product – rather, it is the beginning of the public process of legalizing cannabis for recreational use in Rhode Island. We welcome input from the public as to whether or how we should implement recreational usage, and I expect robust discussions with House membership as well.”
The legislation was developed over the course of months of discussions among legislative leaders, the sponsors and stakeholders including health and community leaders, law enforcement, cultivators and more. The bill also draws on discussions held during hearings for previous legalization bills introduced by the sponsors over the course of years, including one that passed the Senate in 2021.
“We’ve been working hard since the end of last session to establish consensus on the details, but our efforts to address the issue have been going on for many years, during which time our neighboring states have already made this move ahead of us. Rhode Island is now behind them from a competitive standpoint, since it’s fairly easy for most Rhode Islanders to cross the state line to make a legal purchase,” said Senate Majority Leader Michael McCaffrey (D-Dist. 29, Warwick). “The truth is, legal cannabis is already widely available to Rhode Islanders, but the resulting revenue is not. With this bill, we will create jobs, revenue and control in our own state, and help address some of the inequities that have resulted from prohibition. I look forward to working with my colleagues, stakeholders and the public to ensure that we take the careful, nuanced and equitable approach we need to transform this economic sector.”
Cannabis Legalization & Regulation Legislation
March 1, 2022
• As of October 1, 2022 legalizes the purchase, possession, and use of 1 ounce or less of cannabis for Rhode Islanders age 21 and up; 10 oz for personal use in primary residence.
• Allows home grow: Maximum of 3 mature and 3 immature cannabis plants per residential dwelling unit.
• By written request, expungement for marijuana-related misdemeanor and felony possession only convictions for amounts that have been decriminalized.
Cannabis Control Commission
• Regulation, licensing and enforcement in an independent, 3-member Cannabis Control Commission.
• Commission includes chair (Governor’s appointee) and 1 appointee each from lists submitted to Governor by Speaker and Senate President for consideration.
• Commission responsible for establishing rules and regulations, awarding licenses, and implementation of law.
• Control of medical cannabis transferred from DBR to Commission within 6 months of final rules and regulations being issued.
Cannabis Advisory Board
• Commission assisted by Cannabis Advisory Board comprised of voting membership (11), which includes 5 Governor appointees and 3 each from Speaker and Senate President.
• 1 of Governor’s appointees to Advisory Board is Chair and Equity Officer; cannabis testing, cultivation, and retail industries will be represented by 1 member each; other appointed members will be discretionary appointed by Speaker (3), Senate President (3) and Governor (1), provided they have been impacted by past drug policies or represent the fields of drug policy, criminal justice, substance abuse treatment, public health, or homelessness.
• Board’s non-voting membership (8) includes representatives of Commerce, DLT, RIDOH, RIDE, Public Safety, DBR, EOHHS, and URI Pharmacy.
• The Board will advise and make recommendations to the Commission, including relative to the administration of the Social Equity Assistance Fund.
• Cannabis Office at DBR will serve as the administrative arm of the Commission.
Taxes & Medical Transition
• Tax structure will include the state sales tax (7%), a state cannabis excise tax of 10%, and a local cannabis excise tax of 3%. The local tax would be remitted to the municipality (where the point of sale occurred). Medical cannabis tax structure remains in place.
• Compassion centers allowed to sell recreational marijuana, provided they obtain hybrid retail license as of October 1, 2022.
• A primary goal of this legislation is to reduce barriers to participation in the cannabis industry for people adversely impacted by cannabis prohibition.
• The Social Equity Assistance Fund, funded through licensing fees and penalties, will be used to provide assistance to applicants from communities disproportionately impacted by prohibition of cannabis.
• The Cannabis Control Commission will administer the Social Equity Assistance Fund in consultation with Cannabis Advisory Board.
• Each of RI’s 6 zones will reserve a license opportunity for at least 1 co-op license and 1 social equity license.
• Co-op and social equity licenses must be maintained for those purposes (cannot be transferred to non-cooperative or non-social equity applicants).
License Types & Fees
• Different types of licenses depending on role in supply chain:
Cultivator, Cannabis Product Manufacturer (Wholesaler), Testing, Employee/Handler, Retail, Hybrid Retail (medical and recreational)
• Hybrid retail license fees (of $125,000) will provide seed funding for Social Equity Assistance Fund.
• Entities will be limited to possessing one license. However, investors can invest in more than one cannabis business.
• 2-year moratorium on cultivators’ licenses begins upon issuance of final rules and regulations; Commission to issue impact report prior to expiration or moratorium.
• 33 total (24 new; 9 potential hybrid retails).
• New licenses distributed based on "1:1:2" formula (1 co-op, 1 social equity, 2 other) in each of RI’s 6 zones.
• First licenses will issue after final rules and regulations.
• Initial license fee ($30,000) to finance Social Equity Assistance Fund.
• City and town councils may by resolution place question on November 22 ballot to opt out of issuing of licenses in city/town.
• If a city or town opts out, it will be ineligible for local cannabis tax revenue.
• To be eligible for revenue, municipalities cannot allow selective uses (ex: cannot ban retail but allow cultivation).