Cannabis Business in Vermont

Vermont's cannabis industry has experienced substantial growth since the launch of its recreational cannabis market in October 2022. In 2023 alone, recreational cannabis sales generated a significant $15.2 million in tax revenue, underscoring the positive impact cannabis has had on the state's economy. The total cannabis sales for the same year reached $108.7 million, reflecting the increasing demand for cannabis products within the state.

The Cannabis Control Board (CCB) serves as the governing body responsible for overseeing both adult-use and medical cannabis programs in Vermont. The CCB is also in charge of licensing cannabis businesses and regulates the manufacturing of hemp and CBD products, ensuring compliance with state laws and industry standards.

Hemp Program Licensing

The Hemp program in Vermont is governed by Rule 2.17, which regulates the production, manufacture, marketing, transfer, and sale of hemp-derived intoxicating cannabinoids and synthetic cannabinoids. However, the CCB has not yet finalized rules concerning non-intoxicating hemp-derived products.

Hemp Cultivators

Applicants interested solely in cultivating hemp are required to register through the USDA, rather than with the State of Vermont. Before registering, individuals must first create an account in the Hemp eManagement Platform (HeMP). This platform is essential for tracking hemp cultivation activities in the state.

Adult-Use Product Manufacturing

Any intoxicating hemp product, defined as containing more than 1.5mg of THC per serving or more than 10mg of THC per package (unless the cannabidiol to THC ratio is 20:1 or greater), must be sold through the state's adult-use or medical cannabis markets. Product manufacturers aiming to create these intoxicating hemp products must apply for a cannabis product manufacturer license through the CCB's adult-use licensing platform. These manufacturers are subject to the same rigorous testing and public health standards as those applied to medical and adult-use cannabis products.

General Product Manufacturing

Hemp products containing 1.5mg of THC per serving or less do not require an adult-use product manufacturer license and may be sold in general retail outlets or online. Businesses producing non-intoxicating hemp-derived products, such as CBD items for retail sale, must register with the CCB to ensure compliance with Vermont's hemp regulations.

Novel or Synthetic Cannabinoids

The CCB prohibits synthetic cannabinoids such as Delta-8 and Delta-10 from being sold in Vermont due to insufficient data on their safety for human consumption. This restriction ensures that the state’s hemp products meet stringent health and safety standards.

Cannabis Licensing in Vermont

Vermont’s cannabis market includes six distinct types of licenses, each regulating a specific part of the cannabis supply chain. These licenses ensure that all aspects of the industry, from cultivation to retail, operate under strict oversight.

Cultivators

Cultivator licenses were issued to businesses that grew cannabis for sale to other licensed entities, such as manufacturers or retailers. These licenses were divided into tiers based on the size of the cultivation area and the type of activities allowed. Cultivators could operate in municipalities that had not opted in to allow retail cannabis establishments, as long as they complied with local zoning laws and received the appropriate licenses from the CCB. By September 2024, there were 383 active cultivator licenses in the state, making cultivation the most prevalent type of license in Vermont’s cannabis market.

Manufacturers

Manufacturers were responsible for producing cannabis products, including edibles, concentrates, and other forms of processed cannabis. Like cultivator licenses, manufacturer licenses were also tiered based on the size and scope of production. These businesses could operate in towns that had not opted in for retail cannabis, provided they followed local regulations. By September 2024, Vermont had 84 licensed manufacturers producing cannabis products for the medical and recreational markets.

Retailers

Retail licenses allowed businesses to sell cannabis and cannabis products directly to the public. However, retail cannabis establishments could only operate in municipalities that opted in through a local vote to host them. This opt-in requirement applied exclusively to retail operations, including the retail portion of integrated licenses. By September 2024, there were 83 active retailer licenses in Vermont, serving the state’s growing demand for both medical and recreational cannabis.

Wholesalers

Wholesalers facilitated the movement of cannabis between licensed entities, ensuring that products reached retailers or manufacturers from cultivators. Wholesalers, like cultivators and manufacturers, could operate in municipalities that had not opted in for retail cannabis, as long as they met local zoning requirements and obtained the necessary licenses. By September 2024, there were 9 active wholesaler licenses in Vermont, playing a key role in the distribution process of cannabis products.

Testing Laboratories

Testing laboratories were responsible for analyzing cannabis products to ensure they met safety and quality standards, including potency and contamination checks. These facilities could also operate in municipalities that had not opted in for retail cannabis, provided they complied with local regulations. By September 2024, Vermont had 2 licensed testing laboratories providing essential testing services to support the cannabis industry.

Integrated Licenses

Integrated licenses allowed a business to operate across multiple areas of the cannabis supply chain, including cultivation, manufacturing, and retail, under one license. Retail operations under an integrated license were also subject to the opt-in requirement, meaning these businesses could only sell to the public in municipalities that approved retail establishments. However, the other components of integrated licenses could function in towns that had not opted in for retail. By September 2024, Vermont had issued 3 integrated licenses, allowing these businesses to manage multiple stages of cannabis production and sales under one roof.

Ancillary Cannabis Businesses in Vermont

Legal Compliance – Law firms and consultants specialize in cannabis law, ensuring businesses comply with both state and federal regulations. This is especially important for anyone looking to operate or acquire a cannabis business for sale, as navigating the legal landscape is critical to success.

Banking – Cannabis businesses often face difficulties securing traditional banking services due to federal regulations. Specialized financial institutions provide secure banking solutions, helping businesses manage transactions, payroll, and loans within the cannabis industry’s legal framework.

Accounting – Accountants and financial advisors assist cannabis companies with complex tax structures, financial planning, and compliance with industry-specific financial regulations.

Insurance – Cannabis businesses require specialized insurance to cover unique risks, including property, liability, crop loss, and product liability, ensuring their operations are protected from various hazards.

Marketing – Marketing agencies help cannabis businesses promote their products and services while adhering to strict advertising laws, ensuring that campaigns are compliant with state and local regulations.

Security – Security companies offer both physical and cyber protection for cannabis businesses. This includes surveillance systems, alarm systems, and cybersecurity measures to protect valuable assets and data.

POS (Point of Sale) Systems – Technology providers offer retail software and hardware solutions designed to handle sales, inventory tracking, and regulatory compliance, specifically for cannabis businesses.