Licensing Update: Thirteen New Licenses Issued, Packaging Waivers and More in Today’s Meeting

MONTPELIER — The Vermont Cannabis Control Board met today to discuss licensing updates and other topics pertinent to the approval process, such as packaging, inventory tracking and the “life cycle” of applications.

As of June 20, the Board has approved 13 new licenses, up from the eight that were approved last week. They are as follows:

• Green Mountain Integrity (Tier 1 Outdoor Cultivator)
• Ripple Communications (Tier 1 Outdoor Cultivator)
• Crystal Mountain LLC  (Tier 1 Outdoor Cultivator)
• Lb Farm LLC (Tier 1 Mixed Cultivator)
• Emerald Rose Farms LLC (Tier 1 Indoor Cultivator)
• Emerald Visions LLC (Tier 1 Indoor Cultivator)
• High Horse WeedWerks LLC (Tier 1 Outdoor Cultivator)
• Snug Farm (Tier 1 Outdoor Cultivator)
• Split Acres Sungrown LLC (Tier 1 Outdoor Cultivator)
• Lost Lake Cannabis LLC (Tier 1 Outdoor Cultivator)
• Happy Valley Products (Tier 1 Mixed Cultivator)
• Top 1 Co. (Tier 1 Indoor Cultivator)
• Fort Dowd Growers Collective LLC (Tier 1 Mixed Cultivator)

Packaging

The packaging waiver form is available on the Board’s website. According to Chair James Pepper, the approval process for a packaging will move quickly if applicants can provide the Board with a physical sample of the proposed packaging. If this is not a possibility for applicants the Board will still likely be able to obtain a sample, however, providing one’s own sample will effectively expedite the process.

“It really shouldn’t be all that difficult to come up with packaging for flower that doesn’t use plastic. So I would say don’t bother submitting a waiver request for flower packaging, just really look for something that’s compliant.” — Chair James Pepper

Pepper also offered the reminder that packaging for flower does not need to be child-resistant. The requirements that it be tear-resistant and able to deter a child under the age of five still apply. Packaging waivers exist for those who believe they aren’t able to comply with the Board’s rules on packaging (i.e., minimal use of plastic) and are available to help mitigate undue financial stress.

In terms of cannabis flower, the Board has offered numerous examples of packaging that comply with Board rules and are relatively easy to obtain. “It really shouldn’t be all that difficult to come up with packaging for flower that doesn’t use plastic. So I would say don’t bother submitting a waiver request for flower packaging, just really look for something that’s compliant,” Pepper voiced at the meeting.

Inventory Tracking

As the Board has mentioned in the past, the inventory tracking system in Vermont will look different than the systems of many other states. Pepper explained, “It’s much more in the vein of Washington, where licensees are going to [sic] have to report to the Board at regular [intervals] about their inventory and how it’s moving through the supply chain.”

Data supplied through this system will be analyzed thoroughly to ensure the detection of any irregularities or suspicious activity. The Board will contract the services of a data analytics company to complete this task.

Data supplied through this system will be analyzed thoroughly to ensure the detection of any irregularities or suspicious activity. The Board will contract the services of a data analytics company to complete this task.

The window to submit an RFP for these services has closed, meaning the selection process for the contracted company will be underway shortly. Once the selection has been made, specific guidance on how to comply with the inventory tracking requirements will be set forth.

“We do want your genetics in this market, but it’s a very serious red flag if on day one you have a lot of harvested flower you’re trying to enter into this market.” — Pepper

In the meantime, as Board rules dictate, licensees are still required to track and keep detailed records of inventory. These records will be audited and licensees must be able to account for product quantity, source of product, as well as the destination of product. Third party tracking systems are permitted to be used while the Board reviews contractor bids and must be able to directly interface with the Board’s reporting management platform through an API.

Pepper offered a final reminder from the Board in regard to tracking: the illegal inversion of product is a serious regulatory violation and may result in the suspension or revocation of a license. “We do want your genetics in this market, but it’s a very serious red flag if on day one you have a lot of harvested flower you’re trying to enter into this market,” said Pepper.

Application “Life Cycle”

Executive Director of the Board Brynn Hare reviewed the “life cycle” of applications during today’s meeting. “Hopefully this will provide some clarity for people as we talk about the various stages applications are in, and also provide some context for the data that we present in the application register each week,” Hare said, sharing insight on the thought process of Board members.

Every application that has been submitted thus far has been incomplete in some form or another. This trend has lead the Board to engage in two rather distinct rounds of review. The initial review is to pinpoint incomplete areas and notify applicants.

Once an application is resubmitted in its entirety and staff deem it complete, a second review is conducted. Upon passing the second round of review, applications are put on the list that is submitted to the Board for approval or denial.

Application status can be viewed by applicants through the Board’s portal. Status is fluid and can be altered to a previous designation if more information is required of the applicant, although this has yet to occur.

The Agency of Commerce and Community Development will administer a technical assistance program  as well as the grants and loans program for social equity applicants. This is meant to provide access to funding for social equity applicants through the Cannabis Business Development Fund. This funding, however, is not yet in place. August 1 is the anticipated date by which this funding should be available.

Board member Kyle Harris recognized the frustration that is surely felt by social equity applicants and licensees. He noted, “Technical business assistance will cover business planning and development for short term and long term success as well as cultivation coaching and the likes. That technical assistance isn’t designed to just get your application to licensed status but to ensure that you are a successful business moving forward.”

“Unique Issue” – One License per Location

An issue regarding the operation of multiple licenses in one location was the final point on the Board’s agenda today. An applicant has presented an issue that implicates the ‘one license per location’ rule that has been set by statute in Act 164.

“This issue may implicate confidential attorney-client communications as well as [sic] [the Board’s] decision may or may not lead to litigation,” said Chair Pepper. The Board entered into executive session to discuss their decision pertaining to this issue. In a motion on if the applicant in question does meet the ‘one license per location’ rule, the Board voted 2-1 that the applicant is not in violation.

In a departure from some of their past executive sessions, the Board did not engage in any discussion around the reasoning or the circumstances related to the decision. As the meeting came to a close and opened up for public comment, attorney Dave Silberman asked that the Board share more details around the executive session, “maybe in the next meeting.”

Other Meeting Item(s)

• The Board wishes to remind applicants that prequalification is not a prerequisite to application approval. Individuals are still encouraged to apply even if they missed the prequalification window.

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