Governor will seek to make pot legal

PROVIDENCE — Facing the "inevitable" prospect of being encircled by states that have legalized recreational marijuana, Gov. Gina Raimondo will propose this week that Rhode Island do the same.

“I will say, I do this with reluctance,” she told The Journal last week. “I have resisted this for the four years I've been governor. ... Now, however, things have changed, mainly because all of our neighbors are moving forward” with legalization.

The proposal, included in her budget plan for the fiscal year beginning July 1, would create one of the most regulated recreational pot industries in the country, the governor said, aimed at reducing the health and safety problems experienced in some of the 10 other states that have approved recreational use in recent years.

For instance, it would prohibit home-growing of recreational pot, now allowed in Massachusetts, Maine and Vermont, and ban high-potency products from recreational store shelves, such as  "dabs," which are concentrated resins that are smoked.

The proposal would also require that single servings of popular pot edibles such as gummies, brownies or cookies contain no more than 5 milligrams of THC, the psychotropic compound in marijuana.

“We’re not an island, in fact,” said Raimondo. “Like it or not, we’re going to be incurring public safety and public health expenses because it’s legal in Massachusetts” and may soon be in Connecticut. New York and New Jersey are also considering legalization.  “And I think it is time for us to put together our own regulatory and taxing framework.”

If the proposal is approved by lawmakers, the first recreational stores could open by next January.

Those first stores, regulators say, will likely be the state’s three existing medical marijuana dispensaries, located in Providence, Warwick and Portsmouth, since they already have the state-approved infrastructure and licensing to grow and sell marijuana.

Perhaps 30 or 40 other stores would gradually open as they meet state licensing stipulations, regulators say.

The budget article calls for spending about $3.5 million to get the recreational business up and running.

Customers would see their pot taxed at about 17 percent. The licensed cultivators — the only marijuana growers permitted to supply product to the recreational market — would also be taxed for each ounce of flower, or “trim,” they produce.

Through these combined taxes, the state anticipates $14.3 million in gross revenue by the end of fiscal year 2020.

Twenty-five percent of that gross would be split among various state agencies and departments. For instance, the state Department of Health will get money for public-awareness campaigns and product testing, the Department of Public Safety for additional law enforcement, and the Department of Business Regulation to control distribution.

Another 15 percent of the gross would be split among all of Rhode Island’s 39 cities and towns — whether they host retail stores or not.

Communities that choose to have stores would get more of that split than those that don’t.

The final 60 percent of gross revenue would go into the state’s general fund.

Once all expenses are paid, the state anticipates a net profit of $6.5 million at the end of the first year, said Kevin Gallagher, Raimondo’s deputy chief of staff.

“We’re not doing this for the revenue,” Gallagher said. ”We’re going to be surrounded by [marijuana], and the only way we will be able to control the public health, to make sure we have safe products, control distribution, ensure proper enforcement, is if we take control of our own destiny and establish a framework here that has those significant protections.”

Rhode Island lawmakers first approved the use of medical marijuana in 2007. For almost a decade, the program operated with loose regulation, with some of the marijuana grown privately by patients and so-called “caregivers” ending up on the black market.

In February 2016, Raimondo tapped Norman Birenbaum, then 28 and one of her newer staffers, to tighten up the program by drafting more stringent requirements. Quickly, he became the state’s most knowledgeable medical marijuana regulator and is now helping direct the rollout of the proposed recreational market.

“Cities and towns would have the ability through referendum to opt out entirely of having retail pot shops in their communities or, through zoning, limit where the stores can be,” Birenbaum said.

“Our role here, whatever the cities and towns decide locally, is to have a robust licensing and regulatory structure in place so that these [marijuana] businesses are good local citizens and that we are limiting, as much as possible, any of the negative effects …”

Birenbaum said the state was banning recreational sale of high-potency marijuana products such as dabs because of the uncertainty about their safety.

“The public health aspects of those products are really unknown, and the data that has been coming out in the last year or two, since they’ve become more commonplace in the market, really don’t show good things.”

Studies have found that some of those products are abused at the same rate as alcohol and tobacco, he said, "so we want to take a really cautious approach.”

Under the proposal, medical marijuana dispensaries that sell recreational pot will have to ensure enough marijuana medicine to meet patients' needs. But at least one change may be coming for home-growing patients and their caregivers.

They will have to “meet a demonstration of need” to continue growing their own medicine, Birenbaum said. ”We will be putting in place some mechanism to make sure the growing that is going on in the medical program is really needed” and not ending up on the state's flourishing black market.

Birenbaum said the easiest part of the proposal has been recognizing its need.

“When you look at where we are and what’s all around us, we would functionally have adult-use marijuana in terms of easy access to neighboring states and communities” whether Rhode Island legalized recreational pot or not.

“And with that access comes these externalities in public health, public safety. And to address those, you need resources. So I think we want to control our own destiny. ... And the best way to do that is to do this ourselves.”

The hardest part of the proposal?

“Everything else.”

For several years, bills to legalize recreational use have stalled in the State House with General Assembly leaders never allowing the legislation forward for a vote.

Raimondo said she had briefed legislative leaders about her proposal. She wouldn't speak for them, but said, "I suspect at the end of the day they will probably come to the same conclusion that I have, which is: it’s here, it’s inevitable, so let’s do it right."

— tmooney@providencejournal.com

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On Twitter: @mooneyprojo