CASTLETON — There’s money to be made in the cannabis industry, but the disconnect between state and federal law needs fixing, according to speakers at Castleton University’s cannabis studies conference, held Friday.
About 100 people gathered in Hoff Hall to hear from Lt. Gov. David Zuckerman and half a dozen others with influence in the state’s cannabis scene at the conference. Dubbed “Cannabis: The Vermont Way,” the conference was hosted by the school’s new Cannabis Studies Certificate Program.
“It’s not a panacea, it’s not going to save the world to change our laws, but it is remarkable how many different aspects of our lives, our culture, of our society, that this plant has the opportunity to adjust,” Zuckerman said after thanking the school for taking the lead in this area.
Zuckerman was the event’s keynote speaker. He spoke about the benefits of a regulated cannabis market and suggested people be a source of good information for their local legislators.
“The big elephant in the room is the federal stumbling blocks regarding the scheduling and banking,” said audience member, Nancy Kaplan, owner of Poultney Meadows Farm in Poultney. “We have concerns about how it’s legal in Vermont, but in other states you heard about the feds saying ‘OK, we don’t care about the state laws, we’re gonna get ya.’”
She said her farm is exploring hemp and related products, and there are numerous questions about how to proceed.
“I think an important distinction to make, when we’re looking to add banking, specifically, to this industry, is hemp versus adult use,” said Tim Fair, of Vermont Cannabis Solutions, a Vermont law firm dedicated to cannabis-related issues. Fair was on the conference’s first panel addressing the financial side of cannabis and social justice.
He said hemp, defined as “the cannabis sativa plant containing less than 0.3 percent THC delta-9,” was made legal by the federal Farm Bill, which passed in January. He said it allows banks to work with funds made from hemp and hemp-derived CBD products.
“We’re starting to see banks like the Vermont State Employees Credit Union, which is kind of our No. 1 go-to, Brattleboro Savings and Loan, there are several banks who are now realizing that and taking advantage of it,” Fair said.
“Adult use” products are a more complicated matter, he said.
“We do still have a lot of those challenges,” Fair said. “We are still looking at federal illegality, we are still looking at classification as a controlled substance, a Schedule I controlled substance, and while there are routes by which banks can legally supply services to the adult-use industry, and the Department of the Treasury has put forth guidance, which allows banks to work with the adult-use industry, it’s so incredibly onerous and so incredibly expensive that it really is not very feasible as it stands right now.”
He said there’s some movement on this at the federal level with the proposed Fair Banking Act. “I think that will be a huge catalyst for the industry and will also alleviate a lot of the fears people who get into this industry have,” Fair said.
Most hemp being growing in Vermont right now is destined to be processed for the CBD market, said Andrew Subin, also of Vermont Cannabis Solutions. He said it’s legal in Vermont to extract CBD from hemp and add it to various products, but this isn’t the case in every state.
“This is a state-to-state thing, and so we would say if you’re getting into a business where you’re going to be doing business with another state, check on the laws in that state or call your attorney and have him check on the laws in that other state,” Subin said. “Thankfully our state, Vermont, and this gets to the Vermont way, we have one of the most supportive governments for doing CBD right now.”
He said Vermont makes it legal to send CBD products to other places. Whether its legal for whomever placed the order to receive it is another matter.
“We’re seeing a lot of companies now doing big CBD deals with California, doing CBD deals with Florida, doing international CBD tincture deals with South Africa, so it’s happening,” said Subin, “and these others states who are taking a let’s wait and see approach, they’re missing out on what’s happening here in Vermont right now.”
While he wasn’t a panel speaker, Gregory Huysman, director of business lending and services at VSECU, said the credit union has been banking the medical marijuana industry for a few years now, but growing with the cannabis industry has been stunted by the law.
“As was pointed out before, the friction between state law and federal law is really crimping our ability to continue to grow with the economy of the industry, because there’s no set rules on the federal side, there’s no straight guidance from the department of federal regs, and as a federally insured credit union it puts us in a tough position,” he said.
Besides banking and taxes, the business panel touched on tourism, politics, marketing, and state regulation. Other panels focused on cooking with cannabis, and cultivation.