Rhode Island Legalizes Adult-Use Cannabis

Rhode Island Legalizes Adult-Use Cannabis

On Wednesday, May 25, 2022, Rhode Island became the nineteenth state to legalize adult-use cannabis.

Democrat Governor Daniel J. McKee signed into law S.B. 2430 and companion act H.B. 7593, or the Rhode Island Cannabis Act, after both bills were approved by their respective state legislatures. The Rhode Island Cannabis Act regulates and taxes the sale of adult-use or recreational cannabis within the state. The Act also incorporates social equity provisions via grants, expungement of prior cannabis possession convictions, and technical industry assistance and knowledge.

Under the Act, Governor McKee is additionally empowered to appoint a three-person cannabis commission to oversee the industry. The commission will have the authority to license twenty-four dispensaries among six geographic zones.  Six of the licenses, one per zone, are required to be awarded to a social equity applicant.

The Act establishes a local sales tax of 3% and a retail excise tax of 10%. These taxes are in addition to the state’s existing sales tax of 7%. The Act also creates a new social equity assistance fund financed by initial licensing fees. Existing medical marijuana dispensaries can apply to convert their licenses into general adult-use retail licenses later in the year by paying into the fund.

The Rhode Island Cannabis Act is just the latest example of the rapidly expanding adult-use cannabis market. As the trend continues, and as more states continue to legalize cannabis, companies and industry participants can expect to see a growing patchwork of piecemeal state laws, each imposing unique compliance obligations.

Walter (Chad) Blackham

With a practical approach, Chad provides compliance guidance and litigation defense on matters related to cannabis, advertising and marketing, teleservices, and other consumer protection issues.

1200 798 Walter (Chad) Blackham
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