Summary of Article 11 of Gov. McKee’s FY 2023 Budget to legalize cannabis for adults’ use
In January 2022, Gov. Dan McKee unveiled a budget proposal for the 2023 Fiscal Year that includes legislation to legalize, regulate, and tax cannabis for adults’ use. The following is a summary.
Personal allowances and restrictions
Adults 21 or older may possess and purchase up to one ounce of cannabis flower (or an equivalent amount in other forms, as determined by a conversion system defined in regulations).
Individuals may possess up to five ounces of cannabis in their residence, provided it is stored in a secure, locked location.
Residences with multiple adult occupants may possess no more than 10 ounces.
Home cultivation is prohibited and subject to criminal penalties and fines.
Public consumption of cannabis is prohibited.
Smoking or vaporizing cannabis is not permitted in public housing buildings.
Landlords may prohibit smoking or vaporizing cannabis in their property. Occupants in multi-unit housing complexes must obtain written approval from the property owner to smoke or vaporize cannabis in their residence.
Restrictions on smoking or vaporizing in residences also apply to medical cannabis patients.
Any person who exceeds possession limits or violates any other provision of the law is subject to existing penalties in the Rhode Island Controlled Substances Act.
Personal possession allowances take effect on April 1, 2023.
Licensing and market regulations
The Department of Business Regulation is authorized to regulate and oversee all aspects of the adult-use market.
By April 1, 2024, the department is required to issue a report regarding the impact of adult-use legalization on the medical marijuana program.
A 15-member Cannabis Reinvestment Task Force is established to submit recommendations specifically relating to the long-term reinvestment of adult-use cannabis tax revenues in social welfare programs.
The department will issue 25 retail licenses per year for three years and may establish a license cap in the future.
Licenses are awarded through a lottery system.
20% of the retail licenses must be minority business enterprises (as defined in chapter 14.1 of title 37).
Existing medical cannabis compassion centers (which are not included in the 25 new licenses mentioned above) are permitted to obtain a hybrid license whereby they can operate in both the medical cannabis and adult-use markets.
Initially, only existing licensed medical cannabis cultivators and compassion centers are permitted to obtain an adult-use cultivation license.
No entity would be allowed to control more than one business license of any kind. (Vertical integration for entities other than compassion centers is not permitted.)
No one with a felony drug conviction is permitted to own or manage a cannabis business.
The department is authorized to issue additional classes of licenses, including craft cultivators, marijuana processors, transportation, social use licenses, etc.
No less than 50% of these licenses must be awarded to minority business enterprises.
Cannabis sold by a cultivator is subject to a $10 per ounce weight-based tax (trim is taxed at $3 per ounce).
Cannabis sold by a retailer to a consumer is subject to the normal 7% sales tax in addition to a 10% cannabis excise sales tax.
Cannabis taxes are deposited into a a restricted receipt account and distributed as follows:
25% is directed to regulatory agencies to implement the law;
15% is directed to municipalities pursuant to a formula that provides some revenue to all cities and towns, with another portion restricted only to cities and towns that permit cannabis establishments to operate within their jurisdictions; and
60% is directed to the state’s general fund.
Employers are permitted to fire employees who test positive for cannabis and are suspected of being “impaired by marijuana while in the workplace or during the performance of work.”
Anyone who transfers cannabis to a person under 21 years of age is subject to a felony charge and a $10,000 fine. (There are no age exceptions, which means a 20-year-old who shares marijuana with another 20-year old is subject to these penalties.)
Extracting cannabis with use of any solvent other than those explicitly listed is a felony offense.
Cannabis product regulations
Cannabis products that are considered to be attractive to children are not permitted.
All cannabis products must be sold in child-proof packaging.
Edible cannabis products are limited to five mg of THC per serving, with no more than 100 mg of THC in a single package.
The department is authorized to set additional potency limits on other cannabis products.
Local cities and towns are permitted to enact zoning and other rules to govern the manner of operation of cannabis businesses within their jurisdictions.
Municipalities may limit or ban any class of cannabis establishments, provided that such an ordinance is approved by a local referendum.
Any person with a prior conviction for misdemeanor or felony possession of a marijuana-related offense that has been decriminalized subsequent to the date of conviction is entitled to have the record automatically expunged.
The attorney general is authorized to promulgate regulations to carry out the expungement provisions.