MONTPELIER — In response to concerns about market saturation, regulators are temporarily closing licenses for marijuana retailers and secondary cultivators in Vermont.
At Wednesday's Cannabis Control Board meeting, board chairman James Pepper called the move “a temporary pause while we try to get back on our feet.”
Mr. Pepper said, “We know that the unnatural distribution of retail stores is an inevitable result of the Legislature's decision to prohibit retail in towns that did not actively vote to allow retail.'' “I'm working on it,” he said. “Right now, two years into retail sales, just over two years, I don't see much appetite in Congress to reconsider the opt-in/opt-out premise. “Retail density was an issue, placing the board with the undesirable task of developing rules for new retail locations.'' ”
New retail applications have until October 25th to be approved. Retailers who have already applied must complete all requirements by November 15th.
At the time of the meeting, nine retailers had submitted applications. Twelve other companies are working on pre-qualification but have not submitted applications. The average time from when a retailer submits an application to approval is 75 days, Pepper said.
CCB member Kyle Harris expects retail licenses could be reinstated sometime in the spring.
The retail location guidelines will help achieve “geographic balance” and “include several strategies to serve smaller markets,” Pepper said. Continuing to “recklessly license growers” will only harm small growers, he added.
Mr Pepper said the board was not concerned about supply for the post-harvest season. He said the purpose of the moratorium was to “maintain the small-scale craft nature of this market.”
“We need to consider strategies such as better production management, greater market access for small businesses, and policies that allow more products and services provided by illegal markets into regulated markets,” he said. “In that regard, we are thinking about lifting potency caps, changing on-site consumption permits, and federal legalization.”
At the time of the meeting, 14 growers had submitted applications. The average time for growers to be approved is about 67 days, Pepper said.
“I think you can certainly make a strong case that we're evaluating the size of this market,” he said. “We don't want to do any fundamental damage to the basic structure during the evaluation.”
Indoor Tier 2 applications are expected to be submitted by October 25th. The commission chose not to close the first indoor tier, which covers the smallest cultivators.
“Tier 1 outdoor and mixed applications are closed seasonally and will reopen as planned in November,” the news release states. “All larger tiers will remain closed to new applications while the Board and policymakers evaluate the data and consider strategies to better manage production and improve market access for small businesses.”
Jeffrey Pizzutillo, executive director and co-founder of the Vermont Growers Association, said his group believes “bottlenecks” are the problem, not oversaturation. He urged the board to think creatively about next steps and vote against suspending the license, citing volatility related to seasonality and the geographic distribution of retailers.
Before the Board decided to suspend the licensing process, several applicants had expressed concern that they would miss out on market participation after spending so much money on start-up costs. Ta.
Tito Byrne, co-founder of Burlington's Byrne Gallery, said: “I really feel the pain of all the people who are still preparing, especially if they don't have the financial resources to do so.” “That process can frustrate even the most talented entrepreneurs. But I definitely commend the board for trying to solve some of these problems. So what's needed is I feel like it might be a targeted approach.”
