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Vermont Legalizes Recreational Marijuana Market

by Sarah Cawthon October 15, 2020

Nearly three years after legalizing adult-use marijuana in the state, Vermont has finally legalized marijuana sales.

Gov. Phil Scott announced on October 4, 2020, that a marijuana sales legalization bill passed by the legislature is able to take effect. When the state legalized the possession of adult-use marijuana in 2018, they failed to implement a framework for the legal production and sale of adult-use marijuana. With the passing of S. 54, the state will now allow for a commercialized, taxed and regulated system.

Vermont will now begin crafting the regulatory structures that will lead to legal marijuana sales. The legislation will create a Cannabis Control Board that will establish the rules, along with a 14 percent excise tax on all marijuana products. Recreational sales are likely to begin in 2022, after the new rules are finalized.

“This is an historic move that adds to the momentum of our movement and underlines its breadth and depth, and importantly, it comes as other state legislatures are poised to seriously consider legalization in the very near future,” said MPP Executive Director Steven Hawkins.

Business license types that will become available in the coming months will include stand-alone permits for new market entrants for cultivators, retailers, manufacturers, wholesalers and testing labs. Applicants will be allowed only one license in each category. Entities can put together their own vertical operation from stand-alone licenses.

Vermont’s five existing vertically integrated medical cannabis licensees will gain first entry into the adult-use market in May 2022. The state will then start issuing licenses to small growers (1,000-square-foot canopy) and testing laboratories by May 1, 2022, larger cultivators by June 1, 2022, and processors and wholesalers by August 1, 2022. Retail store licenses will be issued by October 1, 2022.

Additionally, the number of business licenses statewide is not limited by the law. However, Vermont’s 255 municipalities will decide whether to allow adult-use retailers to set up shop. Localities can also impose license caps.

Adult-use sales in Vermont could reach nearly $230 million in 2023 and about $255 million in 2025, according to an economic impact report issued in August.

The state is the third in New England to legalize adult-use marijuana, after Massachusetts and Maine. Vermont is also only the second state in the US to legalize adult-use marijuana through the legislature and through a ballot initiative. Illinois was the first to do so in 2019.

The Government Operations Committee added a few amendments before passing it in a unanimous vote on January 31. Some of the amendments include: modifying the timeline for implementation, clarifying zoning regulations and increased cooperation with the Vermont Department of Health in regards to crafting guidelines. The legislation could face additional amendments as the discussion continues.

Scott declined to sign the bill passed by the state legislature that establishes the framework for the sale of adult-use marijuana, but said that he would not veto the measure and allow it to become law. The governor had vetoed an earlier marijuana legalization bill because it did not include specific funding.

Scott declined to sign the bill because he wanted it to address the following issues:

  • Lack of social equity provisions, which would disproportionately benefit Vermont’s existing medical marijuana dispensaries
  • The allowance of marijuana vaping products
  • Strict marketing prohibitions
  • A firm timeline for appointing the Cannabis Control Board members by January 8, 2021
  • An increase in law enforcement funding and training to handle impaired drivers

Additionally, Scott signed into law another bill that will automate the expungement process for past marijuana convictions. People who get expungements will receive a notification by mail. 

Prepare for Vermont Marijuana Business Opportunities Vermont Bundle-jpg

If you’re interested in preparing for marijuana business opportunities in Vermont, download our Vermont Marijuana Business Starter Package, which includes:

  • an informational overview of state specific marijuana laws and programs
  • a Marijuana Business Application Guide and Checklist
  • a Marijuana Business Plan Template
  • a Marijuana Dispensary and Cultivation Financial Plan Template