Licensing Update: Twelve New Licenses Issued, Next Application Window Opens July 1

MONTPELIER — Today’s Vermont Cannabis Control Board meeting kicked off with an exciting announcement – the next application window opens this Friday, July 1 at 10 a.m. This window applies to all three tiers of product manufacturers and wholesalers.

The opening of this new window does not imply the closing of other application windows. “We have no intention of closing other license application types,” said Chair James Pepper. Ample notice will be given before the closing of any application window.

Cultivation and retail applications will not be de-prioritized in light of this. However, it should be noted that every Tier 1 Outdoor Cultivator application has been reviewed by Board staff as of today, June 29. Twenty-two Outdoor Cultivation (Tier 2-5) are still in review process. As Pepper put it, “We’re down to the wire, but we’re almost there.”

Other topics covered in  today’s meeting include insurance and banking, a brief review of last week’s executive session, packaging waiver requests, Act 158, and the Board’s addition of a Director of Compliance.

According to Heady’s tally based on numbers announced at previous Board meetings, 52 licenses have been approved so far. Last week, the Board approved thirteen new licenses and twelve new licenses were approved as of June 27 for the following licensees:

• Backcountry Organics LLC
  • Mixed Cultivator Tier 1 (Small Cultivator)
• Green Mountain Ganja Guys LLC
  • Outdoor Cultivator Tier 5
• Moon Waters Farm
  • Outdoor Cultivator Tier 1 (Small Cultivator)
• Peregrine Farm LLC
  • Outdoor Cultivator Tier 1 (Small Cultivator)
• Bizzee Beez Organics LLC
  • Outdoor Cultivator Tier 1 (Small Cultivator)
• Kanna LLC
  • Outdoor Cultivator Tier 1 (Small Cultivator)
• Banting Farm
  • Outdoor Cultivator Tier 1 (Small Cultivator)
• Roaring Branch Farm LLC
  • Outdoor Cultivator Tier 1 (Small Cultivator)
• High Mountain Homegrown LLC
  • Outdoor Cultivator Tier 1 (Small Cultivator)
• Birch Haven Farm LLC
  • Outdoor Cultivator Tier 1 (Small Cultivator)
• Purple Lark Farm LLC / Motherflower
  • Outdoor Cultivator Tier 1 (Small Cultivator)
• The Dank Closet
  • Indoor Cultivator Tier 1 (Small Cultivator)

Banking and Insurance

The bank account and insurance policy for cannabis businesses in Vermont must specifically be for the applicant’s business, said Pepper. Although an applicant may have a personal checking account or a homeowner’s insurance policy, these are not sufficient when trying to start a business in the cannabis industry.

By law, financial institutions need to be aware when the source of deposits is cannabis-related. Additionally, Pepper reminded viewers that insurance companies will not cover most incidents without a cannabis-specific policy.

One License Per Location

Last week, the Board entered Executive Session to discuss the validity of an application and whether or not the proposed license plan violated the “one license per location” rule set by statute in Act 164. The Board voted 2-1 that it was not in violation.

During public comment at the end of last week’s meeting, insight into this decision was requested in light of the fact that the Board has typically always provided more transparency on how decisions are made in Executive Session.

Pepper offered a refresher by explaining, “Our rules require that a licensee may operate across two distinct parcels but only if they share a common border.” He went on to say, “The issue that the Board needed to decide was whether two, non-abutting parcels that were connected by a privately-owned easement across another property would violate this [rule].”

Since both parcels and the easement were held by the same person, the Board concluded there was no violation of the one license per location rule.

Packaging Waivers

Board member Kyle Harris took time today to address packaging waivers requests. Currently, there are about a dozen waiver requests awaiting review. “Our goal with this is trying to reduce plastic waste,” Harris reminded viewers and applicants.

With his work history in the environmental sector, Harris aims to impart that the Board will not concede in its goal of reducing plastic waste in the state. One applicant argued that the weight of their traditional plastic containers would decreased greenhouse gas emissions because it’s not as cumbersome to ship.

The Board strongly encourages those seeking packaging waivers to take a “good-faith crack” at answers the questions.

Although this assessment may be true, this type of argument would not grant a packaging waiver because it does not promote reduction of plastic use and waste. “Folks are not taking the right initiative to think about how these issues relate to what Vermonters are paying attention to–which is plastic waste issues, peat moss issues–and are instead copying and pasting sustainability claims of a specific…packaging company into the questions,” Harris observed.

The Board strongly encourages those seeking packaging waivers to take a “good-faith crack” at answers the questions.

“Environmentalism is about trade-offs,” Harris went on to say, “It’s like whack-a-mole, you try and solve one [environmental issue] there’s another one that pops up and I certainly understand and respect the argument that the transportation of glass…can output more greenhouse gases.” He concluded by mentioning how all of that still fails to take into account the main issue the Board is trying to tackle, which is plastic waste.

Act 158

A full summary of Act 158 and everything it pertains to outside of its main text is on the Board’s website, under the Laws, Rules and Regulations tab. While it pertains mainly to regulating small cultivators as farmers, it goes further than that. “This bill became the vehicle for a separate bill that included a number of miscellaneous amendments to the cannabis laws,” Pepper explained.

There will be additional detail that we’ll need to add to our rules in the next cycle of rule-making regarding the oversight and regulation of hemp producers and also the product registration process.
— Executive Director Brynn Hare

Since some of these amendments may impact how licensees set up their businesses, the Board’s Executive Director Brynn Hare did a ‘high level overview’ of the substantive changes made.

1. Delivery and online order were both prohibited prior to the passage of Act 158. Now, online pre-order from a licensed retailer for in-person pick up is permitted.
2. Retailers were previously not permitted to package despite this being permitted for other license types. This may have been oversight and has since been reversed upon the passage of Act 158. This will allow cultivators to ship product in bulk.
3. Licensed cultivators and wholesalers are now permitted to sell seeds and clones to other licensees, not to the public.
4. (From the Cannabis Fee Bill, amended by Act 158) Prior to amending, the Cannabis Fee Bill established a product licensing process with an associated fee. Act 158 clarifies that all cannabis producers must register products for retail sale with the Board. This will be done to ensure that all products available to consumers are reviewed and registered by the Board.
   1. 1. A webform for registry will be available in the coming weeks.
5. Act 158 gave the Board regulatory authority over hemp testing, hemp-infused products and synthetic cannabinoids. Product registration described above will also apply to hemp and synthetic products.

Social Equity and Prequalification

With 210 applications already approved for prequalification, the Board moved forward today to approve five more. Applicants with incomplete applications are still highly encouraged to fill in missing information and resubmit. However, Hare reported today that the majority of the 330 incomplete applications have been fully withdrawn.

As of Monday, just under twenty social equity applications have been approved for licensure. Today, five have been recommended for social equity status and one was denied based on the fact that the applicant does not meet the criteria for Social Equity Individual Applicant.

Other Meeting Item(s)

• During public comment at the end of today’s meeting, one viewer suggested that applicants in need of more funding should contact Efficiency Vermont siting that they have given over $50,000 to one applicant alone.

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