Hopeful Cannabis Entrepreneurs Prepare for Vermont’s New Legal Market

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Tito Bern owns the Bern Gallery, a smokehouse and glassblowing business in Burlington. Photo by Riley Robinson / VTDigger

Someday soon, Tito Bern is hoping to grow cannabis on a property he recently purchased in Addison County. And he would like to sell his product in a storefront somewhere in Burlington.

He’s already talking to building owners in the city about spaces for his potential cannabis store and is considering buying his own retail space.

Bern, who owns the Bern Gallery, a smokehouse and glassblowing business in Burlington, said his “whole world revolves around cannabis.” For years he cultivated the plant for himself and others as a patient of the medical marijuana market in Vermont.

“Being an entrepreneur is definitely my number one inspiration, so naturally being an entrepreneur in this new taxed and regulated market is super super exciting for me,” said Berne.

“I can’t wait to bring real organic cannabis to the world,” he added.

Bern is one of many entrepreneurs hoping to open a cannabis business next year, when the legal Vermont marijuana market is expected to launch.

Cannabis Solutions attorney Tim Fair in his Burlington office on Friday, October 11, 2019. Photo by Glenn Russell / VTDigger

While the earliest date on which cannabis retail establishments can start selling their products to the public is still over a year away – October 2022 – many are already preparing to apply for licenses and set up shop. .

Tim Fair, a Burlington-based lawyer who works with cannabis companies, says his company has been in contact with 180 people interested in opening marijuana businesses in Vermont.

While cannabis retailers will not be able to apply for licenses until September 2022, Fair encourages applicants to set up their business in advance so that they are “good to go” the day they submit their applications.

“We recommend to our customers, you had better prepare the door to your dispensary,” he said.

“I mean standard operating procedures written, staff hired, ID badges completed, training completed. We want to be able to submit applications from our clients with their projects ready to go, ”said Fair.

It will be up to the Vermont Cannabis Control Board, the newly appointed group responsible for regulating the state’s marijuana market, to determine who gets a license.

The board will also be responsible for drafting various industry regulations over the next few months and recommending a licensing and fee system for cannabis companies to be approved by the legislature next year.

While the board has yet to make a formal decision on its approach to licensing, it has indicated that it will prioritize supporting smallholder marijuana growers.

In an interview, James Pepper, the chairman of the board, noted that it was only a matter of time before federal legalization of cannabis occurred. With a nationwide cannabis market on the horizon, he said the Vermont industry would find it difficult to compete with other states “on a purely volume basis.”

Instead of relying on a few large cannabis growers, Pepper said Vermont should focus on building a “diverse ecosystem of small, artisanal growers,” similar to its craft beer and cheese industries. , which will distinguish it.

“We need to build a diverse ecosystem that will allow Vermont to thrive when our state borders are no longer barriers to movement and you can have interstate commerce with cannabis,” he said.

The supervisory board and other state officials are also working to put in place a social equity program that aims to help people of color and others harmed by the old marijuana laws to start businesses. companies in the emerging marijuana market.

A bill enacted in June tasked the state with devising a system to provide loans and grants to “social equity seekers,” or people who have been disproportionately affected by the criminalization of marijuana and who wish to enter the new market. The loans and grants will be financed by a new “Cannabis Business Development” fund created by law.

While the state has not yet determined who will be eligible for the social equity program, it may include those who have previously been convicted of marijuana-related crimes.

Jimi Smith, from Colchester, who has previously cultivated cannabis on the black market, is hoping to open a dispensary and cannabis cultivation business in Chittenden County. He works with Fair and has said he would like his business to target low-income people with health issues.

Smith said he had previously been convicted of growing, manufacturing and possessing cannabis.

He said he had struggled to find a job as a black person with a criminal record and would like to hire members of the BIPOC community in his new business.

“I want to give people who look like me an opportunity,” Smith said.

Prior to the opening of jar retail stores in Vermont, existing medical marijuana dispensaries in the state will be able to begin selling their products to the public.

There are currently five medical marijuana dispensaries in the state, and as of last month all are owned by foreign companies.

In late June, CeresMED, which owns two of Vermont’s medical dispensaries – Champlain Valley Dispensary and Southern Vermont Wellness – merged with SLANG Worldwide, a Canadian company, in a $ 25 million deal.

Cannabis flowering cannabis plant

CeresMED says the merger will allow it to expand its facilities and hire up to 50 additional employees as it plans to enter the new recreational cannabis market. SLANG Worldwide, a publicly traded company specializing in packaged cannabis consumer products, has brands and lines of cannabis products that are distributed in 12 states.

“It’s not just capital that we get to fund our expansion plans, but we get this experience and other team members to help us,” said Bridget Conry, Experience Manager at mark at CeresMED, about the merger.

Small cannabis growers have expressed concerns about the deal and the advantage that medical dispensaries have in the new market.

Geoffrey Pizzutillo, executive director of the Vermont Growers Association, stressed that there are no limits on the amount of cannabis dispensaries can grow.

Giving medical clinics the capacity to produce “exponential quantities” of products will make it difficult for small businesses to compete in the new market, he says.

Pizzutillo and small growers are calling on the legislature to approve caps on the amount of cannabis large growers can produce.

“If this were to be enacted, these three companies would immediately be on a par with ordinary Vermonters,” said Pizzutillo, referring to the three companies that hold the five Vermont medical dispensary licenses: SLANG Worldwide, iAnthus Capital Holdings and Curalead.

Conry says his dispensaries plan to support and purchase products from small producers. Last month, CeresMED announced a “cultivation deal” with an Addison County artisanal cannabis producer. She said the company is actively seeking more purchase deals with small producers as it anticipates dispensaries will not have enough products to meet demand when the legal market opens up next year.

This happened with the launch of the legal marijuana market in Massachusetts in 2018.

“We need all of these traditional growers to be in the market to have the variety that people want,” said Conry.

Conry said she would support cannabis production caps to help prevent oversupply in the market in the long run. But she said the conversation on the matter needed to be “much more detailed” before the company could determine what a “reasonable” cap would be.

Shawn Lenihan, the manager of Kismet Farm in Rochester, currently grows organic hemp and flowers. But he wants to start producing cannabis as a small-scale grower when the legal market opens up.

Shawn Lenihan of Kismet Farm in Rochester watches his hemp harvest on Friday, July 9, 2021. Photo by Glenn Russell / VTDigger

At first he would like to help supply local cannabis stores in the area.

But in the long term, he would like to offer tours of his business so that “people can really see where their agricultural product comes from, taste it and be able to buy retail directly from the farmer.”

Lenihan says Vermont should “learn from” Oregon’s legal cannabis market, which has faced massive marijuana surpluses. Instead of allowing companies to grow unlimited amounts of produce, he says officials in Vermont should put limits in place to avoid producing cannabis glut.

“Let’s let Vermonters meet the needs of Vermonters, and then if necessary, if we don’t meet that demand, then you can allow people to have more space,” he said.

In addition to pushing for caps on cannabis production, the Vermont Growers Association is also advocating for a special system of “craft licenses” for small businesses who wish to grow and sell their own produce.

To make the market more accessible, Pizzutillo says there should be no limit on the number of licenses granted by the state.

He argues that small businesses shouldn’t have to make big investments, or go through the same license application process as “big market players”.

“You shouldn’t need to do this… to enter the market. And if that’s the case in Vermont, we’ll have an unfair market, ”Pizzutillo said.

Fair, the lawyer who works with cannabis companies, says he doesn’t hear much interest from large out-of-state marijuana companies looking to move into the new cannabis market. Vermont.

The law that established Vermont’s taxed and regulated system strictly limits licensing so that businesses can only open one dispensary and grow operation in the state.

Fair says the license limit has already been effective “in keeping large-scale organizations out.”

About a half-dozen companies in California and Colorado have contacted his company as they consider expanding to Vermont. But he says they quickly lose interest when they hear about his licensing restrictions.

“Vermont, with a license limit, is not considered a market that has a large [return on investment], which is phenomenal for small businesses, ”said Fair.

“It gives normal human beings here in the state a chance to establish themselves early in this industry,” he added.

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