Rep. Cluster Howard proposes bill to legalize cannabis, dedicate revenue to public pensions

Posted at 10:44 AM, Dec 17, 2019
and last updated 2019-12-17 10:44:06-05

FRANKFORT, Ky. (LEX 18) — On Tuesday, Representative Cluster Howard proposed a bill to legalize cannabis and dedicate the revenue to public pensions.

The bill would govern home use and commercial sales and dedicate a sizable portion of tax and license revenues to the state retirement systems' unfunded liabilities.

According to a press release, his bill would also decriminalize possession of less that one ounce of cannabis and provide free expungements for those already convicted of marijuana-related misdemeanors.

"Other states have shown that legalizing cannabis for adult use is a win-win situation for everyone involved," said Howard. "It's a major revenue generator; it frees up critical jail and prison space; it helps counteract the deadly opioid epidemic; and it gives farmers a major new cash crop. The longer we wait, the more we miss out on these benefits."

According to the release, 75 percent of the license and wholesale tax fees would go towards the Kentucky Employees Retirement System. Also, 25 percent would be given to the Kentucky Teachers Retirement System.

Once both systems reach 100 percent funding levels, the revenue would be split evenly between the two systems.

"Illinois is three times our size, so if we got a third of that, we could boost our budget by more than $200 billion a year," said Howard. "Putting that money toward public pensions would free up other state revenues for things like out public schools and universities, and we would see even more money from related economic development and reduced prison, court and drug-treatment costs."

A fiscal note from the Legislative Research Commission said that it would be hard to gauge the financial impact of adult cannabis sales in Kentucky since there are too many indeterminate factors.

Howard's bill would make the Alcoholic Beverage Control board oversee four types of licensing: cultivator, processor, tester and retailer. Each license would have to be renewed annually. One would only be able to hold one license at a time.

"We've seen a similar separation work well for decades in the alcohol industry," Howard said. "That approach keeps any company from monopolizing the market and artificially raising prices."

Home growers would be required to pay $250 for a permit, which would allow them to have up to five mature plants and five immature plants. All other licensees would be required to pay fees based, in part, on their size.

Anyone with a prior misdemeanor marijuana conviction that has not been expunged, or has been convicted of a felony in the last five years or other controlled-substance crime within the past two years, would not be allowed to purchase a license, according to the release.

Each county would have the chance to have at least two retailers selling cannabis and related products. Larger counties would not be allowed to have more than one per 2,300 people. Retailed would only be allowed to sell marijuana-related products.

Sales would be limited to those who are 21-years-old or older and smoking the cannabis in public would not be allowed.

"Although my bill focused on future sales, it is important to point out that it also benefits those convicted of misdemeanor cannabis charges in the past," said Howard. "I believe they should have access to free expungement, which in turn will help them when it comes to such things as getting a job. I also think we need to stop prosecuting those possessing small amounts of cannabis. With our crowded jails, my bill is a sensible step we need to take."

Howard's bill will be considered during the General Assembly's 2020 session, which is scheduled to start in January.

To see a copy of Howard's proposed bill, click here.