Hi yall, we’ve been working on a bill.  We know we don’t have millions in lobby money backing us, but we’re doing it any way.  I’m trying to delude myself into thinking a bunch of regular people can make a difference against large corporate interests, and doing a good job of it.  So I wanted to share the ideas so far, and see what yall thought.

We want to learn from the mistakes of those states that have gone before us.  Included here for review and critique are the Tax and License system, and projected Tax Revenue.  What you do yall think?

A Bill To Create New State Tax Opportunity for North Carolina by Creating a Rational and Equitable Cannabis System

Taxes

6% Excise Tax on all Cannabis products over 1% Total THC by weight, plus State and Local Sales Tax.  Products under 1% Total THC (IE Full Spectrum CBD Products) will be defined as Low THC Cannabis and will not be subject to 6% Excise Tax.  Cannabinoid Beverages Excluded; all Cannabinoid Beverages with THC content >1mg subject to 6% Excise Tax.

Licenses

NC Cannabis Licence Tier System:  A tiered licensing system will allow local growers to continue to serve their communities as they have under the hemp system, allowing higher plant counts for Low THC Cannabis Plants, IE Cultivars that are high CBD, CBG and other Non-Intoxicating Cannabinoids while also allowing larger producers the freedom to conduct business.  We do not want the North Carolina Cannabis market to be monopolized by large, out of state corporations that secure limited licenses and then drive local growers, manufacturers and retailers out of business.  Smaller producers can consistently provide high-quality products that help their communities, and should be allowed space in the market.  Personal growing rights are also paramount, as rural communities may not have retail locations, and every citizen deserves the right to access.  The market should be guided by quality, accessibility, and consumer needs, not by artificial market manipulation like limited licences.  The end goal is to provide North Carolinians with the highest quality, safest products at the best price, while funding the administration of the program, and providing new tax revenue to the state.

Personal Grow, per Household; 10 Flowering plants, 10 Vegetative Plants, 24 Clones, No Sales, Citizens allowed to transport up to 8oz, above 8 oz requires a NC Cannabis Licence.

Applicable to all NC Cannabis Licence Tiers:

21 and Over Sales, Sales to Minors a Felony.

Safety Guidelines: Potency, Heavy Metals, Pesticides and Mold screenings required for all products.

Wholesale Allowed to Retailers and Manufacturers.

Processing or any step outside of the company is allowed, no Forced Vertical Integration.

There is no maximum number of licences for any Tier; Licence Fees are collected before any activities begin; the state is guaranteed to receive the funds necessary to administer the system which will grow in scale with the amount of licenses to administer.

All THC testing to be done using a Total THC standard, counting both Delta 9 THC and it’s Precursor THCA.

NC Cannabis Licence Tier System

Tier 1 Micro Grower/Producer/Retailer (Must be a grower, can also be Producer and Retailer)

$500 Licence, 50 THC Plants in Flower State at any point in time, 50 THC Plants in Vegetative State, 500 THC Cuttings/Clones, Maximum 1000 Low THC Plants in Flower State at any time, No limit to Cuttings/Clones of Low THC Cannabis Plants.  Temp Retail Locations Only (Farmer’s Markets, Festivals, etc following local jurisdiction and school buffer rules).

Tier 2 Medium Grower/Producer/Retailer (May be Grower, Producer, Retailer, or any combination of the 3)

$5000 Licence, Maximum of 500 THC Plants in Flower at any point in time, 500 THC Plants in Vegetative State, 1000 THC Cuttings/Clones, Maximum 5000 under 1% Total THC Plants in flower at any point in time, No Limit to Cuttings/Clones of Low THC Cannabis Plants.

Standalone Tier 2 Producer/Retail Licence, $5,000/Year, and any additional Retail Locations are Licensed at $1,000/Year per Physical Permanent Location.

Tier 3 Large Grower/Producer/Retailer (May be Grower, Producer, Retailer, or any combination of the 3)

$50,000 License, Maximum 5000 THC Plants in Flower, 5000 THC Plants in Veg, 10,000 Cuttings/Clones, 50,000 Under 1% Total THC Plants.

Note; we explored Revenue Caps to the Tiers, but in the end, the maximum allowed plant count controls the scale of the License as well as the Revenue Cap, without needing the administrative capacity.  It would also be unfair to Tier 1 Licence holders if they happen to make $100,001 and then have to pay 10x more for their license.  The approx. maximum yearly gross revenue projected is about $100,000 for Tier 1, $1,000,000 for Tier 2, and $10,000,000 for Tier 3.  I’m sure some MSOs will say that’s not enough, but I don’t think we need any one license growing more than 5000 plants at a time.

Projected System State Revenue

Assumptions; NC Cannabis Market Estimated at $3,000,000,000 Annually.  Assuming 100% Legal Market of Illicit Market Revenue is optimistic, for realistic numbers use 50% of Estimated Market, $1,500,000,000.

If $1.5B is sold in a year, at 6% Cannabis Excise Rate, North Carolina would receive $90,000,000 in new tax revenue, not including the additional $108,750,000 in collected sales tax.  The amount of Licensing Fees paid required to produce and sell $1.5B of Cannabis Products can be estimated by breaking down the total market by average legal market price per gram to consumers.  If we take the mid-range of a mature cannabis market (Colorado) price per gram of $6, the numbers roll out like this:

(222) Tier 3 Licences

$11,100,000

Or

(2,222) Tier 2 Licenses

$11,110,000

Or

(22,222) Tier 1 Licenses

$11,111,111

Of course the reality would be a combination of the 3 Tiers, but no matter how you split it, because of the fee structure, NC is guaranteed $11,000,000 a year to run the program.

This system could put over $200,000,000 A YEAR of new revenue into the NC State Budget, which can be used for Transportation Infrastructure, Education, Public Safety and Drug Education, etc, while not charging enough tax to keep folks in the illicit market.

What do yall think?  Are we missing any great ways to keep the playing field level for the future?  If you’ve read this far I’m impressed!!!  Thank you!!!

Sam