MJBizMag January 2022 - 49

V
ermont is a small state, but
its far-reaching reputation
evokes artisanal products and
farm-to-table dining. Regulators of
the state's upcoming recreational
cannabis market are encouraging that
ethos and have created regulations
that promote small-business
opportunities while curbing Vermont's
appeal to multistate operators.
Vermont's cannabis economy won't
be the biggest-an Oct. 31 report by
cannabis law firm Vicente Sederberg
predicted it would reach $231 million
in 2025-but the market will be open to
small entrepreneurs from both inside
and outside the state.
" We're not in the billion-dollar club,
but we have some of the lowest barriers
to entry in the industry, " said Tim Fair of
Burlington-based consultancy Vermont
Cannabis Solutions. " Vermont is going
to be one of the most unique adult-use
marketplaces in the country ... because
of the emphasis on small business. "
Vermont has only 680,000 residents,
but the state draws 14 million tourists
annually-many of them from the
Northeast.
" Our regulators are incredibly procannabis
and pro this industry. They
are working as hard as they can to make
sure this is accessible to anybody who
wants in, " Fair said of the burgeoning
recreational marijuana market in
Vermont. " There's an emphasis on the
small craft, but not to the exclusion of
anyone else. "
Patrik Jonsson, Curaleaf's regional
president for the Northeast, agreed.
" There seems to be a little bit more
pushback from the state to support
small businesses. I think it's just the
nature of Vermont, " Jonsson said,
adding that only a few cities are large
enough to be of interest to Curaleaf.
" Vermont's going to be very protective
about small businesses, more so
than some of the other states in the
Northeast. I think they're going to do
everything they can to protect local
" Perhaps the most opportunity
lies in the craft and smallcultivation
segment. "
farmers and hemp producers and folks
like that and try to keep out the MSOs
to some extent-or at least not let them
create any type of monopoly. "
PUSH FOR SMALL BUSINESS
One way Vermont is trying to dissuade
MSOs from entering is by limiting
operators to one license per sector.
That means an operator that wants to
vertically integrate must separately win
one grow, one manufacturing and one
retail license. Operators can't have more
than one of any kind of license, which is
a disincentive for big businesses used to
trying to win market share by opening
multiple stores in a state.
" One retail license gets one retail
location, and that is it. That has
effectively really dissuaded a lot of
MSOs and a lot of large operators from
coming into the state, " Fair said. " It has
really kept out a lot of the major players
and instead allowed a lot of the smallbusiness
people to really establish a
foothold. "
Fair added that applicants for
craft and smaller-tier licenses aren't
required to provide proof of funds.
Furthermore, municipalities can't ban
growers; they can only regulate them
for zoning and nuisance violations.
" What we have is an opportunity
for small entrepreneurs to really get
a chance at the adult-use cannabis
industry without the major players
hogging up the market, " Fair said.
The team at Vermont Cannabis
Solutions anticipates that about 100
small growers will be needed-in
addition to existing MMJ operators-to
supply adult-use retailers, which are
expected to number around 35.
CRAFT OPPORTUNITIES
Perhaps the most opportunity lies in the
craft and small-cultivation segment.
The CCB calculated that Vermont will
need 400,000 to 500,000 square feet of
flowering canopy to sufficiently supply
the recreational market.
Fair and his partner, Andrew Subin,
believe much of that square footage
will be awarded to small growers.
" I think they would give out 400,
1,000-square-foot licenses if they
want to. But that's just the benchmark;
there's no limit on the number of
licenses, " said Fair, noting that his
firm represents about 120 cultivation
license applicants.
EDIBLES OPPORTUNITIES
Fair and Subin also see opportunity in
the product manufacturing category,
particularly edibles. They said the
edibles manufacturers currently
seeking licensure in Vermont typically
make 100 to 1,000 units per week.
Many of the product manufacturers
that get licensed will be small
businesses that aspire to reflect
Vermont's small craft ethos. But there
also will be a need for value-priced
edibles brands that are mass-produced.
" What we're talking about is a
production capability. We do not yet
see the production capability to put
out the volume of products that would
be necessary to meet anticipated
demand, " Fair said, referring to the
millions of tourists who pour into
the state for skiing, leaf-peeping,
mountain biking and other activities.
What Vermont needs, he said, is an
edibles manufacturer that can crank
out 10,000 to 15,000 units per week.
" That's a real opportunity right now
because that simply doesn't exist, "
Fair said. " There are going to be some
small-batch, very high-end, craft
edibles. But there are people who drink
Budweiser, too. ... We also need basic
edibles that are not high end, and that
mjbizdaily.com | January 2022 49
http://www.mjbizdaily.com
MJBizMag January 2022

Table of Contents for the Digital Edition of MJBizMag January 2022
