An act relating to miscellaneous agricultural subjects

Reproduced from the official legislative record. Confirm the current text and status at the official source.

No. 178 Page 1 of 37 2026 VT LEG #390271 v.1 No. 178. An act relating to miscellaneous agricultural subjects. (S.323) It is hereby enacted by the General Assembly of the State of Vermont: * * * Milk Producers * * * Sec. 1. 6 V.S.A. § 2752 is amended to read:

§ 2752. REFUSAL TO PURCHASE; HEARING; SECRETARY’S ORDER (a) A handler doing business in this State who has a contract either verbal or written with a producer residing in this State for the purchase of the producer’s dairy products shall not refuse to purchase them from the producer except for violations of the sanitary rules or standards applicable to the market in which the dairy product is sold or marketed, without being deemed guilty of unfair discrimination. In the event that the refusal is to be based upon reasons of oversupply or other reasonable grounds, the refusal shall not become operative until the purchaser has given the producer at least 90 days’ notice of intention to refuse the producer’s product on these grounds, which shall be particularly set forth in writing so that the producer may be fully appraised of the refusal. (b) If the producer desires to question the existence or validity of such grounds of refusal, he or she the producer may do so within 90 days after receiving the notice or refusal by requesting the Secretary of Agriculture, Food and Markets for a hearing, and the Secretary is hereby given jurisdiction to hear and determine the question. The producer shall make complaints of such No. 178 Page 2 of 37 2026 VT LEG #390271 v.1 contemplated refusal in writing to the Secretary, setting forth the substance of the refusal notice and requesting to be heard thereon. The Secretary shall then notify both the producer and the purchaser in writing, sent to them by registered mail, of the time and place of hearing thereon. The time of the hearing shall not be less than 10 nor more than 30 days from the date of the notice. Hearing shall be informal. Both parties shall have an opportunity to produce evidence. * * * (d) If a request for a hearing is made by a purchaser producer, refusal of the purchaser shall not become operative until hearing and decision in the purchaser’s favor by the Secretary. * * * * * * Farm-to-School Program Contracts * * *

Sec. 2. 6 V.S.A. § 4721 is amended to read:

§ 4721. LOCAL FOODS GRANT PROGRAM (a) There is created in the Agency of Agriculture, Food and Markets the Rozo McLaughlin Farm-to-School Program to execute, administer, and award provide local grants or contracts for the purpose of helping Vermont schools develop farm-to-school programs that will sustain relationships with local farmers and producers, enrich the educational experience of students, improve the health of Vermont children, and enhance Vermont’s agricultural economy. No. 178 Page 3 of 37 2026 VT LEG #390271 v.1 (b) A school, a school district, a consortium of schools, a consortium of school districts, a registered or licensed child care provider, or an organization administering or assisting the development of farm-to-school programs may apply to the Secretary of Agriculture, Food and Markets for a grant award or contract to: * * * (c) The Secretaries of Agriculture, Food and Markets and of Education and the Commissioner of Health, in consultation with farmers, child nutrition staff, educators, organizations administering or assisting the development of farm-to- school programs, and farm-to-school technical service providers, jointly shall adopt procedures relating to the content of the grant application applications or contract bids and the criteria for making awards. * * * (e) No award individual grant or contract shall be greater than 20 percent of the total annual amount funds available for granting except that a grant an award to the following entities may, at the discretion of the Secretary of Agriculture, Food and Markets, exceed the cap: (1) Farm-to-School service providers; or (2) school districts or consortiums of school districts that completed merger under 2010 Acts and Resolves No. 153, 2012 Acts and Resolves No. 156, or 2015 Acts and Resolves No. 46 on or before July 1, 2019, provided No. 178 Page 4 of 37 2026 VT LEG #390271 v.1 that the grant is funds are used for the purpose of expanding Farm-to-School projects to additional schools within the new school district. * * * Pest Control Compact Repeal and Pesticide Exam Requirements * * *

Sec. 3. REPEAL 6 V.S.A. chapter 83 (Pest Control Compact) is repealed on July 1, 2026. Sec. 4. 6 V.S.A. § 1112 is amended to read:

§ 1112. LICENSING PESTICIDE APPLICATORS; PESTICIDE COMPANIES; DEALERS (a) The Secretary may adopt rules requiring persons selling Class A and B pesticides to be licensed under this chapter. In addition, the Secretary may adopt rules requiring companies that hire applicators or conduct pesticide applications to be licensed and applicators who use pesticides to be certified under this chapter. The Secretary may establish reasonable requirements for obtaining licenses and certificates. The fees for dealers, licensed companies, and applicator certificates under this chapter shall be as follows: (1) Class A Dealer License—$50.00; (2) Class B Dealer License—$50.00; (3) Pesticide Company License—$75.00; (4) Commercial and, Noncommercial, and Government Applicator Certification fee—$30.00 per category or subcategory with a maximum of $120.00; No. 178 Page 5 of 37 2026 VT LEG #390271 v.1 (5) second and third time examination Examination fee for dealer licenses and applicator certification—$25.00; and (6) Private Applicator—$25.00; and (7) State Government, Municipal, and Public Education Institution Applicators—$30.00. * * * (e) There shall be no limitation on the frequency for retaking examinations for private, commercial, noncommercial, or government applicator certifications or dealer licenses. * * * Seed Law Changes * * *

Sec. 5. 6 V.S.A. § 641 is amended to read: § 641. DEFINITIONS (a) As used in this chapter: (1) “Agricultural seed” includes grass, forage, cereal, oil, fiber, and other kinds of crop seeds commonly recognized as agricultural seeds, lawn seeds, and combinations of such seeds, and may include noxious weed seeds used as agricultural seed. (2) “Secretary” means the Secretary of Agriculture, Food and Markets or his or her the Secretary’s designee. (3) “Agency” means the Agency of Agriculture, Food and Markets. No. 178 Page 6 of 37 2026 VT LEG #390271 v.1 (4) “Flower seed” includes seed of herbaceous plants grown for their blooms, ornamental foliage, or other ornamental parts and commonly known and sold under the name of flower or wildflower seed in this State. * * * Sec. 6. 6 V.S.A. § 644 is amended to read:

§ 644. LABEL REQUIREMENTS FOR AGRICULTURAL, FLOWER, AND VEGETABLE SEEDS (a) Each container of agricultural, flower, and vegetable seeds that is sold in this State for sowing purposes shall be labeled. (1) All labels shall include: * * * (5) All bins and other bulk displays of agricultural, flower, grass, and vegetable seeds, or mixtures of the described seeds, shall be labeled with the same information that is required to be on containers of agricultural, flower, or vegetable seeds as applicable. * * * Sec. 7. 6 V.S.A. § 647 is amended to read: § 647. ADMINISTRATIVE PENALTIES (a) The Secretary may assess administrative penalties, not to exceed $250.00 for each offense, in any case he or she the Secretary determines that a person has committed any of the following violations: No. 178 Page 7 of 37 2026 VT LEG #390271 v.1 (1) sold seed products without paying the seed inspection fees for hundredweight tonnage or seed registration fee under section 648 of this title; (2) sold seed products within the State of Vermont found deficient in guarantee analysis and labeling as defined by rule; or (3) violated a stop sale order. * * * * * * Consolidate VACP within VEDA * * *

Sec. 8. TRANSFER OF VERMONT AGRICULTURAL CREDIT PROGRAM 10 V.S.A. chapter 16A (Vermont Agricultural Credit Program) is repealed for the purpose of redesignation as 10 V.S.A. chapter 12, subchapter 16.

Sec. 9. 10 V.S.A. chapter 12, subchapter 16 is added to read: Subchapter 16. Vermont Agricultural Credit Program § 280hh. DEFINITIONS As used in this subchapter: (1) “Agricultural facility” means land and rights in land, buildings, structures, machinery, and equipment that is used for, or will be used for, producing, processing, preparing, packaging, storing, distributing, marketing, or transporting agricultural or forest products that have been at least partially produced in this State, and working capital reasonably required to operate an agricultural facility. No. 178 Page 8 of 37 2026 VT LEG #390271 v.1 (2) “Agricultural land” means real estate capable of supporting commercial farming or forestry, or both. (3) “Agricultural products” means crops, livestock, forest products, and other farm or forest commodities produced as a result of farming or forestry activities. (4) “Authority” means the Vermont Economic Development Authority established under section 213 of this title. (5) “Cash flow” means, on an annual basis, all income, receipts, and revenues of the applicant or borrower from all sources and all expenses of the applicant or borrower, including all debt service and other expenses. (6) “Farm operation” means the cultivation of land or other uses of land for the production of food, fiber, horticultural crops, silvicultural products, orchard crops, maple syrup, Christmas trees, forest products, or forest crops; the raising, boarding, and training of equines, and the raising of livestock; or any combination of the foregoing activities. “Farm operation” also means the storage, preparation, retail sale, and transportation of agricultural or forest commodities accessory to the cultivation or use of such land. “Farm operation” also means the operation of an agritourism business on a farm subject to regulation under the Required Agricultural Practices. “Farm operation” also means a business that provides specialty services to farmers, such as foresters, farriers, hoof trimmers, or large animal veterinarians operating or proposing to operate mobile units. No. 178 Page 9 of 37 2026 VT LEG #390271 v.1 (7) “Farm ownership loan” means a loan to acquire or enlarge a farm or agricultural facility; to make capital improvements, including construction, purchase, and improvement of farm and agricultural facility buildings, farm worker housing, or farmer housing that can be made fixtures to the real estate; to promote soil and water conservation and protection or provide housing; and to refinance indebtedness incurred for farm ownership or operating loan purposes, or both. (8) “Farmer” means an individual directly engaged in the management or operation of an agricultural facility or farm operation for whom the agricultural facility or farm operation constitutes two or more of the following: (A) is or is expected to become a significant source of the farmer’s income; (B) the majority of the farmer’s assets; and (C) an occupation in which the farmer is actively engaged, either on a seasonal or year-round basis. (9) “Forest products business” means an enterprise that is engaged in managing, harvesting, trucking, processing, manufacturing, crafting, or distributing forest products at least partially derived from Vermont forests. (10) “Livestock” includes cattle, sheep, goats, equines, fallow deer, red deer, reindeer, American bison, swine, poultry, pheasant, chukar partridge, coturnix quail, ferrets, camelids and ratites, cultured trout propagated by commercial trout farms, and bees. No. 178 Page 10 of 37 2026 VT LEG #390271 v.1 (11) “Loan” means an operating loan or farm ownership loan, including a financing lease, provided that such lease transfers the ownership of the leased property to each lessee following the payment of all required lease payments as specified in each lease agreement. (12) “Operating loan” means a loan to purchase livestock, farm or forestry equipment, or fixtures to pay annual operating expenses of a farm operation or agricultural facility; to pay loan closing costs; and to refinance indebtedness incurred for farm ownership or operating loan purposes, or both. (13) “Program” means the Vermont Agricultural Credit Program established by this subchapter. (14) “Project” or “agricultural project” means the creation, establishment, acquisition, construction, expansion, improvement, strengthening, reclamation, operation, or renovation of an agricultural facility or farm operation. § 280ii. VERMONT AGRICULTURAL CREDIT PROGRAM (a) The Vermont Agricultural Credit Program provides an alternative source of sound and constructive credit to farmers and forest products businesses who are not having their credit needs fully met by conventional agricultural credit sources at reasonable rates and terms; or, in the alternative, the granting of the loan shall serve as a substantial inducement for the establishment or expansion of an eligible agricultural or forestry project within the State. The Program is intended to meet, either in whole or in part, the No. 178 Page 11 of 37 2026 VT LEG #390271 v.1 credit needs of eligible agricultural facilities and farm and forest operations in fulfillment of one or more of the purposes listed in this subsection by making direct loans and participating in loans made by other agricultural credit providers: (1) to encourage diversification, cooperative farming, and the development of innovative techniques for farming and forest products businesses; (2) to increase energy efficiency and reduce energy consumption in agricultural facilities, including the construction of water pollution control facilities that implement best management practices for farm waste abatement pursuant to 6 V.S.A. chapter 215; (3) to encourage innovative and diversified processing, marketing, and distribution of Vermont agricultural products; (4) to assist beginning farmers to start new farms and new agricultural facilities to commence or strengthen their operations; (5) to assist or financially strengthen existing farms; and (6) to refinance loans incurred by eligible borrowers for any of the purposes enumerated in subdivisions (1)–(5) of this subsection. (b) No borrower shall be approved for a loan from the Authority that would result in the aggregate principal balances outstanding of all loans to that borrower exceeding $5,000,000.00. No. 178 Page 12 of 37 2026 VT LEG #390271 v.1 § 280jj. GENERAL POWERS (a) The Authority shall have the powers necessary to carry out the purposes and provisions of this Program and subchapter, including those general powers conferred on the Authority in section 216 of this title. (b) The Authority shall have the powers necessary to dissolve the Vermont Agricultural Credit Corporation in accordance with 11B V.S.A. chapter 14. Upon dissolution of the Vermont Agricultural Credit Corporation, title to all property owned by the Vermont Agricultural Credit Corporation shall vest in the Authority. § 280kk. LOAN ELIGIBILITY STANDARDS A farmer, forest products business, or a limited liability company, partnership, corporation, or other business entity with a minimum 20 percent ownership of which is vested in one or more farmers, forest products businesses, or a nonprofit corporation, shall be eligible to apply for a farm ownership or operating loan that shall be intended to expand the agricultural economy or forest economy of the State, provided the applicant is: (1) an owner, prospective purchaser, or lessee of agricultural land in the State or of depreciable machinery, equipment, or livestock to be used in the State; (2) a person of sufficient education, training, or experience in the operation and management of an agricultural facility or farm operation or forest products business of the type for which the applicant requests the loan; No. 178 Page 13 of 37 2026 VT LEG #390271 v.1 (3) an operator or proposed operator of an agricultural facility, farm operation, or forest products business for whom the loan reduces investment costs to an extent that offers the applicant a reasonable chance to succeed in the operation and management of an agricultural facility or farm operation; (4) a creditworthy person under such standards as the Authority may establish; (5) able to provide and maintain adequate security for the loan by a mortgage on real property or a security agreement and perfected financing statement on personal property; (6) able to demonstrate that the applicant is responsible and able to manage responsibilities as owner or operator of the farm operation, agricultural facility, or forest products business; (7) able to demonstrate that the applicant has made adequate provision for insurance protection of the mortgaged or secured property while the loan is outstanding; (8) a person who possesses the legal capacity to incur loan obligations; (9) in compliance with such other reasonable eligibility standards as the Authority may establish; (10) able to demonstrate that the project plans comply with all regulations of the municipality where it is to be located and of the State of Vermont; No. 178 Page 14 of 37 2026 VT LEG #390271 v.1 (11) able to demonstrate that the making of the loan will be of public use and benefit; (12) able to demonstrate that the proposed loan will be adequately secured by a mortgage on real property or by a security agreement on personal property; and (13) able to demonstrate that there will be sufficient projected cash flow to service a reasonable level of debt, including the loan or loans, being considered by the Authority.

Sec. 10. 10 V.S.A. § 211(c) is amended to read: (c) Therefore, the general public advantage requires: * * * (7) low-cost capital to assist Vermont family farmers to farm as provided in subdivision 272(3) of this title; * * * Sec. 11. 10 V.S.A. § 212 is amended to read: § 212. DEFINITIONS As used in this chapter, with the exception of subchapter 16: * * * Sec. 12. 10 V.S.A. § 216 is amended to read: § 216. AUTHORITY; GENERAL POWERS The Authority is hereby authorized: * * * No. 178 Page 15 of 37 2026 VT LEG #390271 v.1 (17) To contribute to the capital of the Vermont Agricultural Credit Corporation Program established pursuant to chapter 16A subchapter 16 of this title chapter in an amount the Authority determines is necessary and appropriate. * * *

Sec. 13. 10 V.S.A. § 220a is amended to read: § 220a. THE VERMONT JOBS FUND (a) There is hereby created the Vermont Jobs Fund, hereinafter called the Fund, which shall be used by the Authority as a nonlapsing fund for the purposes of this chapter. To it shall be charged all operating expenses of the Authority not otherwise provided for and all payments of interest and principal required to be made by the Authority under this subchapter. To it shall be credited any appropriations made by the General Assembly for the purposes of this chapter and all payments required to be made to the Authority under this chapter, it being the intent of this section that the Fund shall operate as a revolving fund whereby all appropriations and payments made thereto may be applied and reapplied for the purposes of this chapter. Monies in the Fund may be loaned at interest rates to be set by the Authority for the following: * * * (b) Monies in the Fund may be loaned to the Vermont Agricultural Credit Program to support its lending operations as established in chapter 16A of this title at interest rates and on terms and conditions to be set by the Authority to No. 178 Page 16 of 37 2026 VT LEG #390271 v.1 establish a line of credit in an amount not to exceed $100,000,000.00 to be advanced to the Vermont Agricultural Credit Program to support its lending operations as established in chapter 16A of this title. (c)(b) Monies in the Fund may be loaned to the Vermont Small Business Development Corporation to support its lending operations as established pursuant to subdivision 216(14) of this title at interest rates and on terms and conditions to be set by the Authority. (d)(c) Monies in the Fund may be loaned to the Vermont 504 Corporation to support its lending operations as established pursuant to subdivision 216(13) of this title at interest rates and on terms and conditions to be set by the Authority. (e)(d) The Authority may loan money from the Fund to the Vermont Sustainable Energy Loan Fund established under subchapter 13 of this chapter at interest rates and on terms and conditions set by the Authority.

Sec. 14. 10 V.S.A. § 280a is amended to read: § 280a. ELIGIBLE PROJECTS; AUTHORIZED FINANCING PROGRAMS (a) The Authority may develop, modify, and implement any existing or new financing program, provided that any specific project that benefits from such program shall meet the criteria contained in the Vermont Sustainable Jobs Strategy outlined in section 280b of this title. These programs may include: * * * No. 178 Page 17 of 37 2026 VT LEG #390271 v.1 (12) loans to agricultural enterprises or endeavors administered by the Authority under chapter 16A subchapter 16 of this title chapter and any programs created thereunder. * * * * * * Hemp Oversight * * * Sec. 15. TRANSITION OF HEMP PROCESSOR OVERSIGHT 6 V.S.A. chapter 34 (hemp) is repealed. Sec. 16. 7 V.S.A. chapter 31, subchapter 3 is added to read: Subchapter 3. Hemp

§ 851. FINDINGS; PURPOSE (a) Findings. The General Assembly finds that the federal legal status of most hemp products will be contingent upon an amendment to 7 U.S.C. § 1639o, to take effect in November 2026, pursuant to the Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act of 2026, Pub. L. No. 119-37. The legality of hemp and hemp products in interstate commerce is unsettled and continues to evolve. (b) Purpose. The purpose of this subchapter is to unify oversight of cannabis and hemp-derived cannabinoids under the Cannabis Control Board to more effectively prohibit illicit cannabis and cannabis product trade while positioning growers and processors of nonintoxicating hemp products to take advantage of national market opportunities that may exist. The purpose of this No. 178 Page 18 of 37 2026 VT LEG #390271 v.1 subchapter is also to support small-business hemp producers and processors in taking advantage of opportunities for the cultivation and sale of hemp and hemp products.

§ 852. DEFINITIONS As used in this subchapter: (1)(A) “Grow” means: (i) planting, cultivating, harvesting, or drying of hemp; and (ii) selling, storing, and transporting of hemp grown by a grower. (B) “Grow” also means to produce. (2) “Grower” means a person who is registered with the Board and the U.S. Department of Agriculture to produce hemp. “Grower” also means producer. (3) “Hemp” means the plant Cannabis sativa L. and any part of the plant, including the seeds and all derivatives, extracts, cannabinoids, acids, salts, isomers, and salts of isomers, whether growing or not, with the federally defined tetrahydrocannabinol concentration level of hemp. Hemp is considered an agricultural commodity. (4)(A) “Hemp product” or “hemp-infused product” means any product with the federally defined tetrahydrocannabinol concentration level for hemp derived from, or made by, processing hemp plants or plant parts, that is prepared in a form available for commercial sale, including cosmetics, personal care products, food intended for animal or human consumption, cloth, No. 178 Page 19 of 37 2026 VT LEG #390271 v.1 cordage, fiber, fuel, paint, paper, construction materials, plastics, and any product containing one or more hemp-derived cannabinoids, such as cannabidiol. (B) Notwithstanding subdivision (A) of this subdivision (4), “hemp product” and “hemp-infused product” do not include any substance, manufacturing intermediary, or product that: (i) is prohibited or deemed a regulated cannabis product by administrative rule of the Board; or (ii) is not lawful in interstate commerce. (C) A hemp-derived product or substance that is excluded from the definition of “hemp product” or “hemp-infused product” pursuant to subdivision (B) of this subdivision (4) is considered a cannabis product as defined by subdivision 831(3) of this title; provided, however, that a person duly licensed or registered by the Board lawfully may possess such products in conformity with the person’s active hemp processor license. (5) “Process” means the storing, drying, trimming, handling, compounding, or converting of hemp by a processor for a single grower or multiple growers into hemp products or hemp-infused products. “Process” includes: (A) transporting, aggregating, or packaging hemp from a single grower or multiple growers; or No. 178 Page 20 of 37 2026 VT LEG #390271 v.1 (B) manufacturing hemp products or hemp-infused products from hemp concentrate. (6) “Processor” means a person who is licensed by the Board to process hemp. A retail establishment selling hemp products or hemp-infused products is not a processor.

§ 853. HEMP; AN AGRICULTURAL PRODUCT (a) Hemp is an agricultural product that may be grown as a crop produced, possessed, marketed, and commercially traded in Vermont pursuant to the provisions of this chapter and administrative rules of the Cannabis Control Board. (b) The cultivation of hemp shall be subject to and comply with the Required Agricultural Practices adopted under 6 V.S.A. § 4810, as amended.

§ 854. HEMP REGISTRATION AND LICENSURE (a) Producers. All persons engaged in the production of hemp shall register with the Board as growers and shall provide their location, the nature of their activities, and evidence that those activities conform to the requirements of federal law and regulation. A person shall apply for registration or renewal of registration on a form provided by the Board. The application shall be accompanied by the fee required under section 858 of this subchapter. (b) Processors. All persons engaged in the processing of hemp, including trade in hemp-derived cannabinoids and process intermediaries, shall be licensed by the Board. A person shall apply for a license or renewal of a No. 178 Page 21 of 37 2026 VT LEG #390271 v.1 license on a form provided by the Board. The application shall be accompanied by the fee required under section 858 of this subchapter. (c) Products. All hemp-derived products containing or reasonably expected to contain more than 0.4 mg tetrahydrocannabinol shall be registered with the Board prior to sale to any person within this State. A person shall apply for registration or renewal of registration on a form provided by the Board. The application shall be accompanied by the fee required under section 858 of this subchapter. (d) All applicants. The Board may deny an application for licensure, registration, or renewal if the applicant: (1) fails to establish that its activities comply with State and federal law; (2) refuses the Board or its lawful designees entry upon its premises to inspect and confirm compliance, including by sampling hemp and hemp products for potency testing; (3) fails to submit information requested by the Board; or (4) fails to submit the fee required under section 858 of this subchapter.

§ 855. RULEMAKING AUTHORITY (a) The Board may adopt rules to provide for the implementation of this subchapter, which may include rules to: (1) require hemp to be tested during growth for tetrahydrocannabinol levels; No. 178 Page 22 of 37 2026 VT LEG #390271 v.1 (2) authorize or specify the method or methods of testing hemp, including, where appropriate, the ratio of cannabidiol to tetrahydrocannabinol levels or a taxonomic determination using genetic testing; (3) require inspection and supervision of hemp during sowing, growing season, harvest, storage, processing, and distribution; (4) require labels or label information for hemp products in order to provide consumers with transparent and accurate product content or source information, to be free of false or misleading claims and claims contrary to the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. §§ 301–399i, or to conform with federal requirements; (5) establish sanitary requirements for licensed processing facilities; (6) establish registration requirements for hemp-derived products sold or distributed in the State, including requirements that each product be sampled and tested by a laboratory recognized by the Board; (7) require disclosure or labeling of the amount of cannabinoids known to be present in hemp products sold or distributed in the State; (8) require that licensees and registrants, including out-of-state purveyors of registered hemp products, obtain and maintain commercially reasonable insurance, which for producers of consumer products in final form shall include product liability insurance; (9) prohibit hazardous additives to hemp products, or specify additive limits, relative to substances that are toxic, not generally recognized as safe, or No. 178 Page 23 of 37 2026 VT LEG #390271 v.1 designed to make the product more addictive or more appealing to persons under 21 years of age or to mislead consumers; (10) specify when a registered hemp product that contains more than 0.4 mg tetrahydrocannabinol must be restricted for sale to persons 21 years of age or older or restricted for sale in specified settings, or both; (11) define “craft processors” as a class of small businesses with different needs and risks and exempt craft processor licensees from the requirements of this subchapter that the Board finds to be unnecessary to protect the public health, safety, and welfare; (12) waive or reduce licensing fees for craft processor applicants pursuant to rule or readily accessible policy; (13) exempt certain product categories from the requirement to register under this chapter; (14) establish requirements for the consumer sale of any product containing tetrahydrocannabinol or other cannabinoids; or (15) prohibit any person from making false, misleading, or unsubstantiated claims for cannabinoid-containing products. (b) The Board shall adopt rules to: (1) establish requirements for the licensure of processors of hemp, hemp-derived process intermediaries, and hemp products; and No. 178 Page 24 of 37 2026 VT LEG #390271 v.1 (2) regulate the use of processing facilities and equipment to permit processors to use the same equipment for hemp and cannabis processing and to prevent cross contamination between hemp and cannabis.

§ 856. TEST RESULTS; ENFORCEMENT (a) When notified that hemp, a hemp product, or a hemp-infused product has a tetrahydrocannabinol concentration exceeding the applicable federally defined tetrahydrocannabinol concentration level of hemp, the person licensed or registered with the Board to grow or process the hemp shall arrange for disposal, remediation, or destruction of the hemp, hemp product, or hemp- infused product in a manner consistent with applicable State and federal law. (b) To enforce the provisions of this subchapter, the Board, upon presenting appropriate credentials, may conduct one or more of the following: (1) Enter upon any premises where hemp is grown or processed and inspect premises, machinery, equipment and facilities, all hemp during any growth phase, or any hemp product or hemp-infused product during processing or storage. Inspection under this section may include taking samples, inspecting records, and inspecting equipment or vehicles used to grow, process, or transport hemp, hemp products, or hemp-infused products. (2) Inspect any retail location offering hemp products or hemp-infused products. Inspection under this section may include taking samples of such products. No. 178 Page 25 of 37 2026 VT LEG #390271 v.1 (3) Issue and enforce a written or printed “stop sale” order to the owner or custodian of any hemp, hemp product, or hemp-infused product subject to the requirements of this subchapter or rules adopted under this subchapter that the Board finds is in violation of any of the provisions of this subchapter or rules adopted under this subchapter. An order may prohibit further sale, processing, and movement of the hemp, hemp product, or hemp-infused product until the Board has approved and issued a release from the “stop sale” order. (A) This order shall include the reason for issuance, a description of the hemp or hemp products at issue, instructions to separate all hemp or hemp products subject to the order, and any recommended measures to remedy the basis or bases for the order. (B) A person issued a “stop sale” order may appeal that order to the Board within 15 days after receipt. The person shall file any appeal by serving a letter on the Board, which shall state all grounds for the appeal and identify the hemp or hemp products affected by the appeal.

§ 857. ADMINISTRATIVE PENALTIES (a) The Board may assess violations and administrative penalties against persons licensed or registered pursuant to this subchapter, as well as persons required to be licensed or registered pursuant to this subchapter who fail to obtain or maintain required credentials. No. 178 Page 26 of 37 2026 VT LEG #390271 v.1 (b) The compliance and enforcement authorities and procedures applicable to cannabis establishments shall apply to persons licensed or registered under this subchapter. (c) The Board may enforce a final administrative penalty by filing a civil collection action in any Superior Court.

§ 858. FEES (a) The following fees shall apply to each license or registration application or each annual license or registration renewal under this subchapter: (1) Producer: $50.00. (2) Processor: $500.00. (3) Product: $75.00. (b) Notwithstanding subsection (a) of this section, the Board may issue longer registrations, prorated at the same cost per year, for products it deems low risk and shelf-stable. The products may be defined and distinguished in readily accessible published guidance. Sec. 16a. HEMP FEES REPORTING On or before January 15, 2027, the Cannabis Control Board shall submit to the House Committees on Agriculture, Food Resiliency, and Forestry, on Ways and Means, and on Government Operations and Military Affairs and the Senate Committees on Agriculture, on Finance, and on Economic Development, Housing and General Affairs a report that includes the following information: No. 178 Page 27 of 37 2026 VT LEG #390271 v.1 (1) a summary of all hemp fees in effect in fiscal year 2027, including any waivers, reductions, or alterations to the hemp fee schedule as set forth in 7 V.S.A. § 858; (2) a summary of the revenue derived from each fee in fiscal year 2026; (3) a comparison of fees in other jurisdictions; (4) an analysis of policies or trends that might affect the viability of the fee amount; and (5) a recommendation regarding how the hemp fee schedule as set forth in 7 V.S.A. § 858 may be adjusted to better promote the intent of the General Assembly to better support small-business hemp producers and processors. Sec. 16b. REPEAL 7 V.S.A. § 855(a)(12) (waiving or reducing licensing fees for craft processors) is repealed on January 1, 2028.

Sec. 17. 18 V.S.A. § 4201(15) is amended to read: (15)(A) “Cannabis” means all parts of the plant Cannabis sativa L., except as provided by subdivision (B) of this subdivision (15), whether growing or harvested, and includes: (i) the seeds of the plant; (ii) the resin extracted from any part of the plant; and (iii) any compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. (B) “Cannabis” does not include: No. 178 Page 28 of 37 2026 VT LEG #390271 v.1 (i) the mature stalks of the plant and fiber produced from the stalks; (ii) oil or cake made from the seeds of the plant; (iii) any compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks, fiber, oil, or cake; (iv) the sterilized seed of the plant that is incapable of germination; or (v) hemp or hemp products, as defined in 6 V.S.A. § 562 7 V.S.A. § 852.

Sec. 18. 32 V.S.A. § 7811(b) is amended to read: (b) The tax established in this section shall not be imposed on: (1) cannabis-related supplies sold by a dispensary registered under 7 V.S.A. chapter 37 to registered patients and registered caregivers, as those terms are defined in 7 V.S.A. § 972; (2) cannabis products, as defined in 7 V.S.A. § 831, that do not contain tobacco; or (3) hemp or hemp products, as defined in 6 V.S.A. § 562 7 V.S.A. § 852, that do not contain tobacco. Sec. 19. 7 V.S.A. § 845 is amended to read: § 845. CANNABIS REGULATION FUND No. 178 Page 29 of 37 2026 VT LEG #390271 v.1 (a) There is established the Cannabis Regulation Fund, which shall be managed in accordance with 32 V.S.A. chapter 7, subchapter 5. The Fund shall be maintained by the Cannabis Control Board. (b) The Fund shall be composed of: (1) all State application fees, annual license fees, renewal fees, and civil penalties collected by the Board pursuant to chapters chapter 31 (cannabis); chapter 33 (cannabis establishments); and chapter 37 (medical cannabis dispensaries) of this title; * * * Sec. 20. 7 V.S.A. § 834 is added to read:

§ 834. SALES RESTRICTIONS (a) As used in this section, “unregistered hemp” or “unregistered cannabis” means a product required by State law or rule of the Cannabis Control Board to be registered with the Cannabis Control Board, including a product derived from the unregistered hemp or unregistered cannabis, that is not registered on the date a transaction occurs. (b) No person shall cause unregistered hemp or unregistered cannabis purchased by mail or through a computer network, telephonic network, or other electronic network to be shipped to anyone other than a licensed cannabis laboratory in this State. (c) No person shall, with knowledge or reason to know of the violation, provide substantial assistance to a person in violation of this section. No. 178 Page 30 of 37 2026 VT LEG #390271 v.1 (d) A violation of this section is punishable as follows: (1) A knowing or intentional violation of this section shall be punishable by imprisonment for not more than five years or a fine of not more than $5,000.00, or both. (2) In addition to or in lieu of any other civil or criminal remedy provided by law, upon a determination that a person has violated this section, the Attorney General may impose a civil penalty in an amount not to exceed $5,000.00 for each violation. For purposes of this subsection, each shipment or transport of unregistered hemp or unregistered cannabis shall constitute a separate violation. (3) The Attorney General may seek an injunction to restrain a threatened or actual violation of this section. (4) In any action brought pursuant to this section, the State shall be entitled to recover the costs of investigation, expert witness fees, the action, and reasonable attorney’s fees. (5) A person who violates this section engages in an unfair and deceptive trade practice in violation of the State’s Consumer Protection Act, 9 V.S.A. §§ 2451 et seq. (6) If a court determines that a person has violated the provisions of this section, the court shall order any profits, gain, gross receipts, or other benefit from the violation to be disgorged and paid to the State Treasurer for deposit in the General Fund. No. 178 Page 31 of 37 2026 VT LEG #390271 v.1 (7) Unless otherwise expressly provided, the penalties or remedies, or both, under this section are in addition to any other penalties and remedies available under any other law of this State. * * * Natural Resources Conservation Council Mortgages * * *

Sec. 21. 10 V.S.A. § 723 is amended to read: § 723. POWERS OF SUPERVISORS The supervisors shall have the following powers: * * * (5) To obtain options upon and to acquire by purchase, exchange, lease, gift, grant, or bequest, any property, real or personal; to maintain, administer and improve any properties acquired; to receive income from the properties and to expend the income in carrying out the purposes and provisions of this chapter; and to borrow money, mortgage, sell, lease, or otherwise dispose of any of its property or interests in property in furtherance of the purposes and the provisions of this chapter, provided however, that real estate shall not be mortgaged, and provided however, that the sale, lease, or other disposition of real property of the district is approved by the written consent of the governor; * * * * * * CAFO Permit Working Group * * * Sec. 22. 10 V.S.A. § 1354 is added to read:

§ 1354. CONCENTRATED ANIMAL FEEDING OPERATION PERMIT PROGRAM WORKING GROUP No. 178 Page 32 of 37 2026 VT LEG #390271 v.1 (a) Creation. The Secretary of Natural Resources, in coordination with the Secretary of Agriculture, Food and Markets, shall convene a working group of interested parties to provide advice and recommendations on the implementation of and transition to the Concentrated Animal Feeding Operation (CAFO) permit required under section 1353 of this title. (b) Membership. The working group shall be composed of the following: (1) five livestock farmers who are in good standing, appointed by the Speaker of the House as follows: (A) one representative of the Champlain Valley Farmer Coalition; (B) one representative of the Franklin and Grand Isle Farmers Watershed Alliance; (C) one representative of the Connecticut River Watershed Farmers Alliance; (D) one representative of the Vermont Dairy Producers Alliance; and (E) one representative of farmers from the Northeast Kingdom; (2) three agricultural technical service providers, appointed by the Governor; (3) three representatives from the environmental advocate community, appointed by the Committee on Committees; and (4) the executive director or designee from the Vermont Association of Conservation Districts. No. 178 Page 33 of 37 2026 VT LEG #390271 v.1 (c) Assistance. The Agency of Natural Resources and the Agency of Agriculture, Food and Markets shall participate in the working group on an advisory and administrative capacity but shall not have appointed members on the working group and shall not be required to submit reports to the General Assembly. The working group shall have the administrative, technical, and legal assistance of the Agency of Natural Resources. (d) Meetings. (1) The Secretary of Natural Resources shall call the first meeting of the working group to occur on or before November 1, 2026. (2) The working group shall select co-chairs from among its members at the first meeting. One of the co-chairs shall represent livestock farmers, and one co-chair shall represent the environmental advocate community. (3) A majority of the membership of the working group shall constitute a quorum. (4) The working group shall meet at least quarterly, or more frequently at the request of the co-chairs or at the request of the Secretary of Natural Resources. (5) The working group’s meetings shall be open to the public in accordance with 1 V.S.A. chapter 5, subchapter 2. Notwithstanding 1 V.S.A. § 313, the working group may go into executive session in order to discuss a circumstance or an event regarding a specific farm or regarding a possible CAFO permit violation by a specific farm. No. 178 Page 34 of 37 2026 VT LEG #390271 v.1 (e) Report. The working group annually shall report to the House Committees on Agriculture, Food Resiliency, and Forestry and on Environment and the Senate Committees on Agriculture and on Natural Resources and Energy. The report may take the form of testimony to committees from members of the working group. (f) Definition. As used in this section, “good standing” means a farmer subject to the requirement of this subchapter or to the requirements of 6 V.S.A. chapter 215 and who: (1) does not have an active enforcement violation that has reached a final order with the Secretary of Natural Resources or the Secretary of Agriculture, Food and Markets; and (2) is in compliance with the terms of any current grant agreement or contract with the Agency of Natural Resources or the Agency of Agriculture, Food and Markets.

Sec. 23. CONCENTRATED ANIMAL FEEDING OPERATION; TRAINING ON INSPECTION (a) On or before March 1, 2027, the Secretary of Natural Resources shall contract with a third-party consultant to: (1) assist the Secretary in the development of standards and procedures to be used by the Agency of Natural Resources and the Agency of Agriculture, Food and Markets when inspecting Concentrated Animal Feeding Operations (CAFOs) as required by 10 V.S.A. chapter 47, subchapter 3A; and No. 178 Page 35 of 37 2026 VT LEG #390271 v.1 (2) provide training to the Agency of Natural Resources and Agency of Agriculture, Food and Markets staff on implementation of inspection of CAFOs. Farmers who qualify for a CAFO permit may voluntarily attend training sessions. (b) When the Secretary of Natural Resources and the Secretary of Agriculture, Food and Markets commence inspections of CAFOs under 10 V.S.A. chapter 47, subchapter 3A, the third-party consultant shall accompany the Agency of Natural Resources’ inspectors on 10 inspections to ensure compliance with the inspection standards developed under subsection (a) of this section.

Sec. 24. CONTINGENCY OF FUNDING The duty to implement Sec. 23 of this act (Concentrated Animal Feeding Operation; training on inspection) is contingent upon an appropriation of funds in fiscal year 2027 from the General Fund to the Agency of Natural Resources for the specific purposes described in Sec. 23 of this act. * * * Farm and Forestry Operations Security Special Fund * * * Sec. 24a. 6 V.S.A. § 4643(e) is amended to read: (e) All administratively complete applications shall be evaluated by the Review Board. Within 15 days following receipt of an administratively complete application, the Review Board by majority vote shall recommend to the Secretary whether to issue a payment to the applicant. If the Review Board recommends an award under this section, the The Secretary shall issue the No. 178 Page 36 of 37 2026 VT LEG #390271 v.1 award make a final award determination within 15 days following the date of the Review Board’s recommendation. * * * Permitting Large and Medium Farm Operations * * * Sec. 24b. 6 V.S.A. § 4851(i) is amended to read: (i) A Beginning on July 1, 2026, a person required to obtain a permit under this section shall submit not be required to pay an annual operating fee of $2,500.00 to the Secretary. During any calendar year in which a person has an active Large Concentrated Animal Feeding Operation permit issued by the Agency of Natural Resources pursuant to the federal Clean Water Act and pays the required associated fee, that person shall not be required to pay the $2,500.00 annual operating fee described in this section. The fees collected under this section shall be deposited in the Agricultural Water Quality Special Fund under section 4803 of this title. Sec. 24c. 6 V.S.A. § 4858(e) is amended to read: (e) Operating fee. A Beginning on July 1, 2026, a person required to obtain a permit or coverage under this section shall submit not be required to pay an annual operating fee of $1,500.00 to the Secretary. The fees collected under this section shall be deposited in the Agricultural Water Quality Special Fund under section 4803 of this title. * * * Effective Dates * * *

Sec. 25. EFFECTIVE DATES (a) Secs. 15–20 (hemp oversight) shall take effect on passage. No. 178 Page 37 of 37 2026 VT LEG #390271 v.1 (b) All other sections shall take effect on July 1, 2026. Date Governor signed bill: June 18, 2026

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