Rhode Island Makes 19

On the strength of collaboration between legislative chambers as well as with the state’s governor, Rhode Island crossed the adult-use cannabis legalization finish line May 25 and is positioned to launch commercial sales later this year.

The reform momentum comes after state Sen. Joshua Miller and Rep. Scott Slater—both Democrats—advanced identical bills in their respective chambers, with lawmakers from each body passing the Rhode Island Cannabis Act behind overwhelming majorities on May 24.

The House passed the legislation on a 55-16 vote, while the Senate approved it on a 32-6 vote, sending the bill to Gov. Dan McKee’s desk. The Democratic executive signed the act May 25, officially making Rhode Island the 19th state to legalize adult-use cannabis in the U.S.

“The bill I signed today into law ensures that legalization is equitable, controlled and safe,” McKee said during a press conference the afternoon he signed the bill. “Those were three things that were very important to all of us who were negotiating this final agreement as Rhode Island begins this new chapter. It also establishes a framework for common-sense regulation with a strong emphasis on public health and public safety.”

Slater outlined the joint efforts it took to propel adult-use legalization across the finish line this session while he addressed his House colleagues during final debate May 24.

“The act before us was introduced after months of collaboration between the House and the Senate, as well as numerous stakeholders,” Slater said on the House floor. “We did this in collaboration with the governor’s office, the courts, the attorney general, the Office of Cannabis Regulation and the Department of Health.”

Slater and Miller first introduced the act in March but then unveiled a key amendment May 17, after considering written and verbal testimonies during the committee hearing process.

The underlying proposal did not change. The legislation still includes provisions to legalize the sale and possession of up to 1 ounce of cannabis by adults 21 and older, with no more than 10 ounces for personal use kept in a primary residence; to allow the home cultivation of up to six plants (three mature); and to regulate a licensed industry. But the amendment offered a new provision to provide automatic expungement of records for those with previous cannabis convictions.

Specifically, those with any prior civil violation, misdemeanor, or felony conviction for possession of cannabis now decriminalized by the bill will receive expungement free of charge and without a hearing by July 1, 2024. Any person who wishes to receive expungement of his or her records earlier can petition the court to do so under the bill.

“Social equity was a major focus for us throughout the development of this bill,” Miller said May 24. “We strove to address the past wrongs in a couple of ways, including through automatic expungement and by reserving half of the new licenses for impacted communities. Following testimony and months of discussion with advocates, stakeholders and the judiciary, the bill has been amended to provide for automatic expungement.”

Furthermore, the legislation sets a Dec. 1, 2022, launch date for commercial adult-use sales. The state’s nine compassionate care centers already licensed in the medical cannabis program will have the first go in the adult-use retail market but would need to pay a $125,000 fee—to be deposited in a social equity fund—to become a “hybrid” cannabis retailer.

In addition to those nine retail establishments, the legislation includes 24 new adult-use licenses, which will be distributed equally among six geographic zones. One retail license in each zone will be reserved for a social equity applicant and another in each zone for a workers’ cooperative applicant.

The act also includes provisions for reinvesting tax revenue from cannabis sales into communities that were most harmed by prohibition, as well as including the use of licensing fees and penalties to fund assistance and grants for qualifying social equity applications seeking to enter the market.

Jax James, the state policy manager at advocacy group NORML, pointed to the significance of those provisions in a public statement following the General Assembly’s May 24 passage.

“Ending the prohibition of cannabis is about more than tax revenue,” James said. “The human consequences of cannabis prohibition have lasting ramifications. This long-awaited legislation will work to rectify past wrongs while also moving Rhode Island forward toward a brighter future.”

Under the legislation, a 10% cannabis excise tax will be levied on retail sales, as well as the state’s 7% sales tax and a 3% local tax for the municipalities where cannabis sales take place.

While the legislation provides for local control for city or town officials to adopt ordinances or bylaws that impose reasonable safeguards on public consumption and the operations of cannabis establishments, or the ability to opt out from participating in the state’s program altogether, existing medical operators would be grandfathered in and allowed to continue their current business practices.

In addition, a three-member Cannabis Control Commission will be appointed by the governor with input from the Speaker of the House and approval of the Senate. That commission will be assisted by a 19-member cannabis advisory board that will be comprised of state department heads, industry experts, law enforcement officials, and a chief equity officer.

Earlier in the floor debate, Slater recognized that the bill was “not going to please everyone or meet everyone’s needs,” and a big priority for him was to protect and preserve the medical program and patients it serves. Specifically, the passed legislation will eliminate the registration fees charged to patients and caregivers in Rhode Island’s medical cannabis program.

Slater also recognized that no bill is perfect, and the current legislation will likely take on some additional legislative acts down the road.

“In the many years that it has taken to get this bill to this point, we have learned from other states that legalized cannabis,” he said. “And we know they too must address issues each year and modify the original statute to address new issues that occur. We will be no different.”

In the Senate, Republican Minority Whip Jessica de la Cruz pointed to thriving illicit markets in states that have already legalized adult-use cannabis, such as California, as part of her reason for opposing the Rhode Island Cannabis Act.

“One of the main goals of legalizing marijuana is to reduce the black market for marijuana. But we know that black markets still persist even in states where the drug is legalized,” she said. “One major problem with the presence of illegal markets in a state where marijuana is legalized is that law enforcement has no way of knowing where the consumer purchased the marijuana. This ambiguity in a product’s origin has allowed for illegal farms to thrive by offering a lower price than the premium rate for legalized marijuana.”

The illegal market already exists in Rhode Island, Miller said, pointing out that state residents who want cannabis can purchase it “easily on the illicit market” or just across the state border in Massachusetts, where adult-use sales launched in November 2018.

Miller said Rhode Island already has all of the challenges of cannabis but none of the safeguards and none of the resources that come with its legalization.

“A hundred years ago, Rhode Island was one of two states not to ratify the Volstead Act, the 18th Amendment that prohibited the sale of alcoholic beverages,” he said. “We may have anticipated that prohibition could do more harm than good, especially to minorities, including Italians, the Irish and the other recently arrived immigrants. Although it may be too late for Rhode Island to be a pioneer with cannabis, it is not too late to do what is right and begin to repair damage caused by prohibition of cannabis.”

With McKee’s gubernatorial ink, Rhode Island is the first state to legalize adult-use cannabis in 2022.

Tony Lange is associate editor for Cannabis Business Times. This article was originally published online on Cannabis Business Times.