NEWFANE — Town residents will get to weigh in on Sept. 20 about whether to allow retail cannabis sales within Newfane.
On Tuesday night, the Select Board hosted an informational meeting to discuss the articles, two of the four that will be on the ballot for in-person voting only at 6 p.m. at NewBrook Fire Station.
The other two articles up for decision include appropriating $250 for the Windham Disaster Animal Response Team to focus on pet food distribution to food-insecure pet families, and whether to use surplus funds of $300,197 to cover a shortfall of taxes for the fiscal year 2023. The shortfall in the taxes was a result of a miscalculation of the town tax rate.
TO OPT IN OR NOTTo allow for retail cannabis sales, voters in each town in Vermont have to decide to “opt in.” If they don’t vote at all or vote no to opting in, no cannabis sales are allowed in their towns.
Article One asks Newfane voters if they want to opt in for retail sales.
Article Two asks voters if they want to prohibit the holders of integrated licenses, which include cultivating, manufacturing and testing, from being able to also sell their products in town.
“The only thing that we are voting on [in Article Two] is the retail portion,” said board member Katie Johnson-Aplin. “All of the other licenses, manufacturing, laboratory, growing ... they can all exist and we have no say on them. I want small businesses and local businesses to succeed. I’m not so interested in supporting large corporations who already have a foothold within our state.”
However, James Pepper, chairman of the Vermont Cannabis Control Board, told the Reformer on Wednesday, the way he reads the legislation, a town can’t prohibit an integrated license holder from selling cannabis.
“This is a Dillon’s Rule state where I don’t think the towns have the authority to limit the issuance of licenses in that way,” he said.
Under Dillon’s Rule, local governments possess only those powers specifically delegated to them by state law, or fairly implied from expressly granted powers.
Pepper also noted that he doesn’t expect that any of the three companies that have already received integrated licenses in Vermont will be setting up shop in small towns such as Newfane. He said Vermont law is written to prevent big corporations from monopolizing the market. One of the ways the law does that is prevent franchises from opening around the state.
“We made our business types kind of unattractive to the people that thrive on large economies of scale,” he said. “The existing medical dispensaries, there are three companies, they’re not allowed multiple locations. The thought of one of them opening in Jamaica or Newfane is probably not likely.”
The idea is to allow people to grow marijuana in small regulated facilities, sold through independent retail shops around the state, said Pepper.
“Why would any of these bigger players really want to come to Vermont if we’re going to be so focused on kind of small batch craft growers?” he asked.
A TAX BENEFIT?Folks at the Tuesday night informational meeting also wanted to know what happens with the tax proceeds from the sale of cannabis.
On all cannabis sales, the state will collect a 6 percent sales tax and a 14 percent excise tax.
As far as what kind of revenue will be returned to the towns that host retail facilities, Pepper told the Reformer a town will only get revenue if it has a 1 percent local option sales tax in place.
“Beyond that, the Legislature hasn’t really decided how it will spend the tax revenue,” he said. “It could be local re-investment.”
Newfane does not have a local option tax. If voters decided to adopt such a tax, it would have to be authorized by town vote and then approved by the Legislature.
Pepper said 30 percent of the revenue from the 14 percent excise tax will be spread across the state for prevention and education funding. That will be capped annually at $10 million.
All of the revenue from the 6 percent sales tax will go toward expanding access to after-school programming, Pepper said. That funding is not earmarked for any towns in particular.
RULES, REGULATIONS AND BENEFITSDuring the meeting, Johnson-Aplin noted that by state law, cannabis retailers have to abide by regulations that are stricter than the state’s alcohol laws.
Rules include having very strict security, to include all windows and doors are locked at all times, a security system that is installed by professionals, continuous video surveillance inside and outside the building, employees being 21 or older, visitor age verification and regular inspections by the Cannabis Control Board.
She also noted that retail sales are not restricted to commercial zones.
“They can have a home operation for retail cannabis,” she said, as a family farm cottage business, though the retail sales operation has to be separate from the residential portion.
Questions from those in attendance and online included if the town can “stack” regulations on top of state regulations and how will the town benefit from the cultivation and sales of cannabis.
“Cannabis cannot be considered any different than any other retail business,” said Cindy Hayford, the director of the Deerfield Valley Community Partnership in Wilmington. “You can’t create any additional ordinances or regulations or laws that are stricter than the state regulations.”
Meg Gonzalez, the director of West River Valley Thrives, said her organization is not taking a stand on whether Newfane approves the article in September, but she said Newfane doesn’t have to make the decision right away.
“We know that this is a big unknown in a lot of ways,” she said. “You can opt in anytime. You can opt in a year from now, five years from now. You can wait and see how it plays out in some of these other towns.”
David Ross said a benefit to the town might be bringing a new business to Newfane.
“People might want to shop there,” he said. “[But] does it bring people to town? Do they spend money here? Does that benefit all of us?”
While he is “nervous about the idea of a cannabis store” in Newfane, Ross said, “I also love the idea of having one because I might use it or my friends might use it or a bunch of people coming to our town and spending more money staying the weekend here, they might use it, too.”
Francis Janik, of Jamaica, a cannabis patient care coordinator and the owner of My Kind, a cannabis consulting corporation, has been attending meetings of the Cannabis Control Board, and said having more retail cannabis shops in Vermont would be a benefit for medical patients.
“We don’t have enough. People can’t travel as far as they need to go to get what they need,” said Janik. “So the small grower right now can become a dispensary for medical patients.”
ARTICLE FOUR DISCUSSIONVoters are being asked if they want to move a little more than $300,000 out of surplus into the town’s operating budget.
The tax rate was inaccurately set at 0.5501 instead of 0.6695. This resulted in the $300,000 shortfall, which is a little more than 15 percent of Newfane’s annual expenses.
The town had a larger than usual surplus this year, about $500,000, due to reimbursements from FEMA for work to repair damage from Tropical Storm Irene.
“Because the reimbursement was so long overdue, all the loans that Newfane had taken out for the repairs had been repaid in full,” states a letter from the Select Board. “The FEMA funds therefore represent a surplus to the town’s budget which can be spent in any way the town chooses.”
To reassign the funds, however, requires a vote by town residents.
The mistake in the tax rate was noticed after the tax bills were sent out.
One other option would be to send out corrected tax bills that would show an increase in $120 per $100,000 of home value. That would have cost the town about $3,000, not including staff time.