AG Donovan wary of marijuana municipal veto, taxation

Attorney General TJ Donovan tell pro-legalization podcast he’s concerned VT cities and towns might veto local marijuana operations, but welcomes convicted offenders to participate in legal industry. Photo from 2017 UVM conference, credit Wikiwand.

By Guy Page

November 29, 2019 – Vermont should legalize ‘tax and regulate’ commercial marijuana, and municipalities shouldn’t get much authority to veto or tax, Vermont Attorney General TJ Donovan said in a November 27 interview.

Donovan told pro-legalization advocate and journalist Eli Harrington he strongly supports legalizing commercial cultivation, production, and retail sale marijuana. But he would limit municipal taxation and decision-making. He also would prefer “in a perfect world” to have a proven test for driver impairment, which he concedes does not exist.

Donovan made these comments on a Nov. 27 Vermontijuana.com podcast interview. He’ll have more to say Dec. 5, at the “Cannabis Conversations” public meeting planned by his office for Dec. 5 at Burlington City Hall. A tax and regulate bill, S54, passed the Senate this year and is likely to be considered in the House next year.

Oversupply occurs when commodity growers supply more than the market demands. As with milk and maple syrup, marijuana oversupply means less profit for growers and less revenue for government. Unlike milk and maple syrup, it also means more dumping on the black market. That’s what’s happening in California.

Yet Donovan blames Golden State oversupply on its Legislature allowing municipalities to veto marijuana operations: “California has oversupply, because they allow their cities and towns to essentially veto legalization, which has created an oversupply.” He doesn’t explain how municipal veto leads to oversupply. “It’s really complex,” he admits. The municipal veto isn’t blamed for oversupply by the California press, who merely say the industry produces more weed than legal buyers want.

Municipal tax: Donovan worries municipal taxation will push retail prices so high, buyers will stay on the black market. “How do you hit that price point?,” he asks Harrington. “If you’re going to tax from a statewide perspective, that’s fine….how are you going to do it from a municipal perspective? Is that going to create a price point that is too high, that is going to allow the black market to grow?”

Donovan also told Vermontijuana:

Vermont’s 2018 personal cultivation and consumption legalization has increased demand for marijuana. It has moved “the invisible hand of the marketplace,” Donovan said. “The market is not going away, it is only going to expand, especially if you say it is legal to possess it.”

Vermont should require legal industry to track marijuana from ‘seed to sale’ with ‘block chain’ technology, to monitor product quality and prevent black market dumping of unsold marijuana.

Convicted drug offenders should be allowed to open a legal marijuana business. Donovan wants “a low barrier of access into the marketplace. I don’t think anybody should not be allowed into the market because of an old conviction.” He added, “I hope it’s not some big out of state corporate entity that comes into the state and buys up the marketplace. I wouldn’t be surprised if there are those entities that are looking at this, whether they are tobacco, or others. We want to give everyone a shot who wants to be willing to get into this.” Just as his office now helps ‘mom and pop’ small businesses comply with tax and employment law, it would do so for small marijuana operators, he said.

Better test for driver impairment is needed, Donovan cautioned: “I’m not sold on the saliva test. If we’re going to use a test that just tests presence and not impairment, I’m not sure that’s what we’re looking for….Why would we invest in a test that doesn’t prove legally that impairment has occurred?” He hopes technology will deliver an effective impairment test.

“I respect the work of the DREs and the work they do, the drug recognition experts, but I do think that in a perfect world that we have a test that works,” Donovan said. “A standard gives people something to comport their behavior to. It provides clarity to consumers.” So that people can determine, Harrington suggested, “how many of these can I consume before I drive?” Donovan replied, “Right.”

Donovan also seems skeptical that legalization has made Vermont highways less safe. “Show me that data that in the last 15-20 months we have had an increase due to cannabis…..Let’s go with the facts,” he said. Vermont data is admittedly sketchy – personal possession has only been legal since July 2018. For the record: in several pot-legal states, insurance claims and highway deaths are up about six percent since legalization. A nationwide trucking lobby wants government to require the marijuana industry to support a victims’ compensation fund for pot-related accident, injury and death on U.S. highways.

Categories: Legislation

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