Gov. Albert Bryan Jr. has unveiled legislation broadening the territory’s new medical cannabis law, with new taxes directed mostly to the failing Government Employees Retirement System, and new rights for Rastafarians and other changes.
He is calling a special session Dec. 18 for the Legislature to consider and act on his proposal.
At a press conference in Christiansted Tuesday afternoon, Bryan emphasized the need to find ways to finance the failing pension plan, saying it is projected to cease being able to pay full pensions by 2024.
“The reality is that we have come to a time when we must take action. … a time when we can no longer kick the can down the road,” Bryan said.
Before going into the details of the cannabis law proposal, he said the administration’s goal for the Government Employee Retirement System, was first to find a way to avoid reductions in pension payments to those currently retired and depending on GERS. Then, for current employees, perhaps the system could move to “some type of mix of an annuity and a 401K.” A 401k is a retirement savings plan invested directly in the market, with each employee having their own savings total and specific investments.
“But before that, we have two major problems to solve: One is a funding stream to secure an amount of borrowing that would stabilize the system. And two: someone willing to lend $600 million to a billion dollars,” Bryan said.
The new cannabis taxes would be a part of that, along with other areas he discussed during his 2018 campaign, possibly including online gaming and making sure of federal rum tax revenues through the Caribbean Basin Initiative. These funds from federal alcohol excise taxes on liquor imported to the United States from other nations has not been adjusted to reflect increased local production from the Diageo distillery, depriving the USVI of millions of dollars per year.
Fees to get on the cannabis registry and grow or sell cannabis, along with taxes on the sale of cannabis are another potential revenue stream, he said.
The existing law needs to be amended because “the current bill or law is unlikely to generate much tax revenues for the Virgin Islands,” Bryan said. To secure a $600 million pension bond will require a steady source of $40 to $45 million per year, he said.
His proposal would put “a 30 percent tax on all cannabis sales,” he said. It would also enable Rastafarians to be registered to purchase cannabis for sacramental use. The governor met with Rastafarian representatives in October, which may have informed some of those proposed changes.
It would also allow cruise ship passengers to buy day passes for local use. Three quarters of those tax revenues would go to shore up GERS; 20 percent for services for senior citizens and five percent to fund cannabis regulation.
Asked if these changes amounted to legalized recreational use, Bryan said no. But it would allow for both prescription and non-prescription use. Those under age 21 would not be able to purchase, but if prescribed cannabis by a medical practitioner for an allowed ailment, the minor patient’s parent or guardian could acquire medicinal cannabis on behalf of the minor, “just like any other medication,” he said.
As for non-medicinal use, “we look at it as non-prescribed marijuana,” he said, adding that they believe the potential for revenue from cruise passengers is substantial.
“At our peak we saw 2.1 million visitors in a year. With a $10 pass and say, 10 percent who smoke, that’s $2 million alone in just day passes,” Bryan said. “Because the market really isn’t’ here. The market is abroad.”
The cannabis taxes are unlikely to be enough and are “just a start,” he said.
His proposal also would give incentives for those doing cannabis research to set up in the territory, enabling them to get 90 percent tax breaks through the University of the Virgin Islands Research and Technology Park.
“I would prefer 80 percent (tax benefit) but the RTPark is set up with their system. There are not a lot of research companies in the park so we are trying to boost that too,” Bryan said.
The plan also changes how dispensaries are regulated, so that they would have to be at least 51 percent locally owned, and stringent long-term residency requirements to qualify as local.
Significantly, the bill would also allow for the expungement of existing criminal records for possession of less than one pound of cannabis. And it would allow small producers to be licensed to sell to dispensaries, “creating jobs and tax revenue,” Bryan said.
The Source has urged several of these measures in past editorials, including taxing cannabis and devoting the revenues to GERS and putting in measures to ensure production is local. The Source endorses full legalization.
Bryan also urged the Legislature to approve Cannabis Board nominees who have already been approved in committee, to speed up the process of establishing a V.I. medical cannabis industry.
The bill itself was not yet available for review as of 9 p.m. Tuesday evening.
In 2016 Ken Phillips, a consultant for the St. Thomas-St. John Chamber, endorsed legalized “adult use” of marijuana during a senate hearing on medical marijuana legislation.
“When considering trends in other Caribbean jurisdictions and the mainland U.S., we believe the legalization of adult-use cannabis is timely and would provide numerous benefits to the USVI, both financially and socially,” Phillips said, adding that “increased local business ownership opportunities, net new job creation and related employment opportunities, and meaningful tax revenues that do not cannibalize existing revenue sources are just a few of the many benefits.”
Philips told senators a Chamber study suggested legal adult use sales to cruise passengers could generate upwards of $10 million per year in tax revenues and up to $75 million to $100 million to the territory’s gross domestic product.
At the time, the Source did a quick, rough analysis based on published national usage rates and a much larger, 100 percent tax and calculated somewhat smaller net tax revenues, perhaps in the $4 million to $8 million per year range. But many factors, including marijuana tourism and the price of marijuana could inflate those numbers.
Original Source: https://stjohnsource.com/2019/12/04/bryan-expand-cannabis-law-send-taxes-to-gers/