Draft report lays out plan to tax marijuana in Vermont

Published: Nov. 15, 2018 at 6:04 PM EST
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A draft report detailing the potential legal sale of marijuana in Vermont has been released.

The Governor's Subcommittee on Taxation and Regulation laid out an extensive plan covering costs, licensing and the effect on state departments.

According to the 90-page report, the goal of creating a regulatory system is to get rid of the underground sales market.

The subcommittee estimates once pot is legal, sales will be between $53 million and $83 million. And it recommends a 26 percent to 27 percent sales tax. Twenty percent of that is the marijuana tax. Six is the state's existing sales taxes. And for towns with a local option sales tax, buyers get to pay 1 percent more.

Lt. Gov. David Zuckerman is a long-time supporter of a tax-and-regulate market.

He says a 26 percent or 27 percent tax is close to what he expected but he acknowledges the added cost wouldn't completely eliminate the underground market. He says Vermonters want a quality product and for the most part want to follow the law.

"If we have an aboveground market, where you have choices, just as we do with beer, most people are going to go where those choices exist, where they know it's a clean product, where they know it doesn't have herbicides and pesticides on it," said Zuckerman, P/D-Vermont.

Eli Harrington is the co-founder of Heady Vermont, a cannabis advocacy group. He believes there are some Vermonters who would pay over street value for a product that is tested and nicely packaged.

While the retail tax is the headline, Harrington says there are real opportunities for Vermont to treat this as an entrepreneurial opportunity.

"If you want to discourage the illicit market and get everybody into a regulated market, you have to keep the realities in mind. It's tough enough to start a business here in Vermont-- Republican governor who's fiscally conservative-- this is a chance to not overregulate a huge potential industry in the state," Harrington said.

The report recommends the start date for retail sales to begin 18-24 months after recreational marijuana sales are legalized. Keep in mind, this report is just a draft and could change before it is submitted next month to the governor.

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