Rhode Island Budget Proposal Sees Legalization of Recreational Cannabis

The 2023 budget was recently proposed by the governor of Rhode Island, which aims to create a legal framework for legalizing recreational cannabis.

Rhode Island Gov. Dan McKee presented his fiscal 2023 budget proposal Jan. 20, which includes legalizing recreational cannabis. “Today, we know there are still many pandemic-related challenges that we must once again address together — with our top priority being the health and safety of Rhode Island residents. At the same time, we have an historic opportunity to write the next chapter of Rhode Island now, with $1.13 billion in federal funding and over $600 million in surplus available to invest in our state’s future,” wrote McKee in the introduction to his proposal. “The decisions we make this year have the potential to fuel Rhode Island’s economic comeback and propel our state into the next decade with strength.”

In a press presentation, he briefly touches on several issues included in his budget proposal. Included under “Miscellaneous items” is mention of adult-use cannabis, “allows for a controlled phased roll-out of retail licenses, will result in minimal net revenue in fiscal 2023.” A fuller summary, nearly 200 plan pages, details the proposed fiscal year 2023 budget , mentioning cannabis in some important passages.

“The governor recommends the creation of a tightly regulated legal market for adult-use cannabis in the state,” the abstract reads. “This proposal would create a weight-based excise tax on marijuana cultivation, an additional 10 percent retail excise tax, and a sales tax on cannabis transactions.” would. Another 15 percent would go to local governments, and the remaining 60 percent would go directly to the state general fund (a combination of cannabis cultivation excise taxes and retail sales taxes, in addition to the state’s 7 percent sales tax). The summary also states that after a full year of sales through fiscal 2024, the state projects it will raise up to $16.9 million in general revenue.

The legalization bill reflects analysis of similar states to combat illicit cannabis sales. “The ban on the possession, cultivation and sale of cannabis to adults has proven to be an ineffective policy for the state of Rhode Island,” it said. “In the absence of a legal, tightly regulated market, an illegal cannabis industry has thrived, undermining the public health, safety and well-being of Rhode Island residents.”

Legal cannabis would allow adults to purchase and possess up to one ounce of cannabis or store up to five ounces at home. The draft law is scheduled to come into force on April 1, 2023. As it stands, the proposal does not allow home growing and has consequences for those who may be illegally growing plants at home. In terms of licenses, 25 retailers must be licensed annually through a lottery system between 2023 and 2025. Five of those 25 licenses must be granted to a minority-owned company.

In the past, McKee and members of the House and Senate have disagreed on how to approach legalization in the state. For example, while McKee’s recent proposal assigns responsibility for maintaining a state cannabis program to the Department of Business Regulation, other proponents have previously believed that a new department should be created for the task.

At the start of the 2022 legislative session on January 4, Speaker K. Joseph Shekarchi mentioned that the Rhode Island Congress was actively working to develop a recreational cannabis program. “…We also spent months analyzing the complex issue of marijuana legalization. The House and Senate intend to soon have a bill ready that will serve as a framework to begin a robust public consultation process. We may not be the first state to legalize marijuana, but our goal is to do so in a way that is best for all Rhode Island residents.”