Burke: State and local regulations are paving the way for a safer cannabis market | Columnists

The Vermont Senate passed Bill 164 in October 2020, which notably launched the Cannabis Control Commission. The legislature tasked the council with regulating the production and sale of cannabis in Vermont.

This month marks an important milestone in the evolution of the legal cannabis market in Vermont. On October 1, Vermont joined a growing list of states, including neighboring Maine and Massachusetts, in opening the doors of cannabis retail establishments to adults. Previously, in Vermont, cannabis was only legally available at medical dispensaries, and it could also be grown in limited quantities by individual users.

Cannabis retail licenses are only available in Vermont cities and towns that have chosen to allow cannabis stores within their borders. To date, 70 cities and towns in Vermont have agreed to allow cannabis retailers to open stores within their borders after being cleared to do so by the state. Several of these communities have added their own additional permission processes, which state law allows. However, even though the Cannabis Control Commission began accepting applications almost two months ago, as of this writing on September 26, only two cannabis shops have received licenses, one in Middlebury and the other in Rutland. Companies that hold integrated licenses – one of which has been issued so far – will also be allowed to sell cannabis in the recreational retail market.

The Cannabis Control Board licenses growers, wholesalers, product manufacturers, testing labs, retailers, and integrated licensees. Of the 231 commercial cannabis licenses issued at the start of this week, 95.7% are grower licenses. It is encouraging to see that many such licenses have been issued to applicants for social equity or economic empowerment, types of applications that were created with the aim of making the industry more inclusive, particularly for those who have been negatively affected by past enforcement of anti-cannabis laws. Applications for social equity and economic empowerment are subject to expedited review of applications. For Social Equity applicants, application fees are also waived, annual license fees are significantly reduced, and state grants may be available. The state has established a number of criteria to qualify as a social equity claimant, from race or ethnicity to prior incarceration for a cannabis offense, or both being a member of ‘a community historically disadvantaged by the prohibition of cannabis and having suffered personal effects. Candidates for economic empowerment include women, people of color, veterans, people with disabilities, members of the LGBTQIA+ community, and businesses owned by any of these historically disadvantaged communities.

It is important, and perhaps comforting, that the public knows that licensing requirements for cannabis retailers are stringent and enforced by the Cannabis Control Board. The council continues to strengthen its compliance team, which will monitor the industry to ensure that licensing and reporting requirements are met.

After licensing, cannabis retailers will need to pay close attention to compliance and reporting rules, annual license renewal requirements, and tax collection and remittance. All employees must be state approved and maintain an employee cannabis card and complete annual training. Companies that produce edibles will also need a license from the Food and Drug Administration. Securing appropriate space and financing can be a challenge in a risk-averse real estate and financial market. Few manufacturers or wholesalers are licensed yet, so retailers might also struggle to get enough products until the number of licensed manufacturers and wholesalers increases.

Careful regulatory oversight of the cannabis market should reassure consumers. Before Vermont cannabis growers and manufacturers can sell their product, that product must undergo rigorous testing by accredited laboratories. Retailers and wholesalers can ask manufacturers and growers to provide them with certificates of analysis documenting the results of laboratory tests. Together, these testing and documentation processes greatly reduce the risk of impure or contaminated cannabis reaching the market.

Some might wonder why anyone would turn to this highly regulated legal cannabis market and why the general public should support it. Bringing to light what has been an underground industry in Vermont is a big step forward in keeping our communities safe. Careful examination of the quality and purity of cannabis is the first and most important step in protecting cannabis consumers. On the business side, legal cannabis companies are set to grab a valuable slice of an industry that the state estimates will generate $225 million a year by 2025. Being able to market publicly and Attracting visitors to a retail space is only possible for licensed businesses. As the adult recreational cannabis market opens up this past weekend, cannabis retailers and the cannabis cultivators, wholesalers and manufacturers who supply their products will have the chance to both bring their product to a wide audience and to thrive in what just ten years ago would have seemed an impossible undertaking.

Catherine Burke is a partner in the corporate department of Gravel & Shea PC.