Several cows graze in a Vermont pasture on an Autumn afternoon.

Sundar M

Vermont’s Cannabis Market Will Be Gray and We’re OK With That

We’re not expecting the Wild West in Vermont – think pre-legalization California with its semi-legal dispensaries and quasi-legal delivery services – but, as you might expect, we are expecting the law’s “loopholes” to be exploited by savvy industry enthusiasts.

Coming from a New York native (more or less), Vermont has been a green beacon for a decade – and not just for its lush Green Mountains. Growing up, we puffed on a lot of Vermont-grown cannabis; it wasn’t a secret that the state’s growers cultivated some of the best product you could get your hands on. The tiny state was our California – it had decriminalized cannabis possession before anyone in New England — yet, somehow, Vermont managed to fall behind Massachusetts and Maine with legalization and the new law does not create a taxed-and-regulated industry.

Come July 1, however, it will set in motion a thriving gray market.

What is a gray market?

On July 1, Vermonters can grow two mature and four immature plants-per-household – but we can’t sell it and we can’t publicly consume. The state’s licensed dispensaries will still only be allowed to sell cannabis to registered patients but a “gifting” culture is certain to emerge, as we’re seeing in Massachusetts and Maine as they move toward their own legalization dates. Gifting is nothing new. In California, shortly after the legalization vote, I gave a “donation” for a vape pen and cartridges after finding an ad on Craigslist. In Michigan, I acquired a “temporary” medical cannabis card to attend – and make purchases at – the 2016 Michigan cannabis cup.

An amateur cannabis grower’s seedling, bathed in the purple light of an LED-based grow closet. Photo credit: Cannabis Pictures

Kris Smith*, a Vermont native who owns an industrial hemp-related business in Vermont, temporarily moved to Maine following the legalization vote, hoping to cash in on the Green Rush. (*His name has been changed so he could speak openly about his experiences without fear of reprisal in either Maine or Vermont).

In Maine, Smith explained, a Craigslist culture emerged quickly where, for a donation, you could purchase flower, concentrates, vape pens, and infused-edibles.

“But another thing that immediately happened is people were growing more,” he explained. “People were like, ‘Well now I can grow my six rec and six medical and boom I have a fat basement grow with 12 plants in it growing at any time.’ That’s a money-maker.”

When voters passed the recreational cannabis initiative, Smith explained, there was nothing in the law that prevented people from doubling up on their plant counts and people started growing plants for people who didn’t even live with them or even smoke, such as relatives.

“Gifting was instantly a thing,” he said. “I’ve seen stuff as blatant as a delivery service with ‘donations.’ We’d find people through social media and you’d say ‘I’m a medical patient’ and you’d never show a card or anything. That’s not even allowed under the medical program but once rec was voted on it started happening all the time.”

While there were no “blatant” social-use clubs in Maine that Smith knew about, he said that, after hours, some bars would allow people to come in and consume cannabis on-site on an outdoor patio. However, he explained that because Maine is such a small market compared to other states such as California and Colorado – and the state’s “wide-open” medical cannabis program – that people didn’t necessarily need these gimmicks to operate in the state’s gray market. He said he was unaware of anyone who was arrested for gifting.

What does this mean, legally, come July 1 in Vermont?

Tim Fair, president of Vermont Cannabis Solutions and a lawyer specializing in cannabis law, explained that “as the law is written right now, it is not gray – it is black and white, clear letter law – it is legal to gift anything under 1 ounce to another adult 21-and-older.”

“The best example is the $100 Snickers bar,” he said. “You call up the delivery service, they deliver you a $100 Snickers bar and you get a free quarter-ounce of cannabis. As the law is written, that would be legal because the purchase you are making is for another object.”

The only way to close this loophole, Fair said, is by a legislative act. And if the Legislature is going to try and reign in the gray market, they would likely just pass tax-and-regulate legislation.

The personal stash harvested from a medical cannabis patient’s homegrown marijuana plant. Photo credit: Cannabis Pictures

Fair said that while the law allows for two mature and four immature plants, the policy makes it ripe for individuals to skirt the law and grow six mature plants at a time because there is no enforcement mechanism for law enforcement to ensure the plants meet those standards. Police would need probable cause to enter a citizen’s home and the only real way they could get such permission is if they were invited in, they were called to the residence for an unrelated crime, or someone were to tell them more than two mature plants were being cultivated at the residence – and even if law enforcement were to discover a six-plant grow, it would be hard for them to determine, in some cases, whether a plant is mature or immature.

Fair said that the new law has the potential to create a lot more legal questions that would need to be addressed, most likely, by the state Supreme Court; such as, whether the smell of cannabis emitting from someone’s home is probable cause.

“It’s legal – but, if you have quantities higher than the law allows, it could be a felony, right? As far as telling people what they can or can’t do is going to be a nightmare because we just don’t know yet,” he said. “We just don’t know what the courts are going to do.

At least one organization is planning a July 1 legalization party, which could raise the social-use question on the day the law takes effect. However, the party is being held on private property, which makes it near impossible that law enforcement could crack down on the event, so long as there are no cannabis sales or consumption by minors.

However, in a hypothetical, Fair said the proprietors of the property could be held liable if someone driving from that party gets into an accident – because they were allowing cannabis consumption at the party; but legally, Fair said, he believes the courts would have to hold cannabis to the same standard as alcohol in cases like this.

Neither Fair nor Smith expects local businesses to operate as “cannabis speakeasies,” as their livelihoods would most certainly be at risk.

The more things change, the more they stay the same

Look, as a New York transplant to Vermont, I can tell you that Vermont has always been viewed as the Northeast’s most liberal state when it comes to cannabis. I can tell you that I see people consuming cannabis in public parks. I can tell you that I puff on my vape pen while walking down Burlington’s Church Street and have consumed cannabis on statehouse property in Montpelier.

There is currently a bill to create a taxed-and-regulated industry in the Legislature, but lawmakers simply have no appetite to take up any more cannabis-related legislation this session – which was enough of a fight.

The legalization measure allows a gray market to exist and most advocates and stakeholders are happy with being able to operate without expensive and onerous licensing – it’s sorta the Vermont way.

At the end of the day, this might be the best form of legalization as other emerging state-sponsored markets, such as Maine and Massachusetts, are in limbo due to pushback from lawmakers and fear of federal interference. To some, this might seem like broad decriminalization rather than legalization, but now Vermonters can grow their own – or, if they can’t, they can buy an overpriced candy bar and possess up to an ounce without fear of penalty.

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