Ready. Set. Grow!: Vermont cannabis industry preps for 2022 launch | News

ST. ALBANS  — When looking back on his history in Vermont’s cannabis industry, Jack Nichol likes to rehash the same joke.

“I should have opened a deli,” he said. 

Instead, he’s fielding calls to van remodelers to figure out how to equip an unmarked Dodge Sprinter with a custom-made cage that securely holds over 20 pounds of cannabis. The closest company he can find that does the work is in Maine.

For him, it’s just another day prepping for the birth of an entirely new industry — Vermont’s recreational marijuana market — scheduled to launch in fall 2022. 

Market analysis completed by the State of Vermont estimates that one in six Vermonters will purchase recreational cannabis once retailers get the go-ahead this October, and for those looking to sell, they’re making moves now to take advantage of what-has-been an unregulated industry. 

What role cannabis will play in Franklin County, however, remains to be seen. 

The size of the market

While Vermont has put numbers to the state’s demand for cannabis, it’s difficult to measure exactly how much marijuana is being grown and gifted in Franklin County.

With the COVID-19 pandemic discouraging people from holding get-togethers, any plant growth can remain solidly outside of a Zoom call camera’s viewscreen, and whether someone runs into it often or not depends on social circles. But there are some public indicators.

State usage statistics estimate that about one in five Vermonters are regular users, according to a 2019 report by the Vermont Department of Health. That number aligns with findings by a 2019 Franklin and Grand Isle counties Community Health Needs Assessment, which reported that one in five high schoolers had used marijuana in the past 30 days.

The pandemic, which pushed up alcohol usage, may have exacerbated the trend.

Anecdotally, it would align with what’s being seen on the ground at the VT Grow Shop, located on North Main Street in St. Albans. Retail manager Kiera Cray said she’s seen interest in growing cannabis increase steadily throughout the last few years as more and more people take it up either for recreational use, medicinal use, or just for fun. 

Tracking those looking to go professional in Franklin County, however, has its difficulties. Because it’s such a new industry, finding expertise is rare, Nichol said, and for those experts who have a few years working within the young CBD industry – or the currently legal non-psychoactive side of cannabis sales – they usually keep their 2022 plans to themselves.

“The reason no one can give you a good answer [on the size of the local market] is that everyone is keeping it pretty close to their chests,” he said.

Add the state’s unfinalized industry regulations into the mix, and Nichol said the result is something of a “wild west” scenario where people are moving to establish the best positions without playing their poker hand.

By April, license applications for integrated licensees, small cultivators and laboratories will be the first to be accepted by the state. Retailers will get their chance to get their licenses by September, and then it’s off to the races in October.

“This is a product. It’s going to be grown, processed and packaged, and it’s going to be consumed,” Nichol said.

Growers, wholesalers and retailers

Jon Slay moved back home to St. Albans three years ago to grow the cannabis plant. He had been living in California working in television, but was growing disillusioned with the industry and decided to pack up, move back to Franklin County and jump feet first into Vermont’s burgeoning hemp market.

He started Green Earth Hemp Co., and after a few rough years, he’s now looking to see what he can do to grow THC cannabis plants that would fuel the upcoming recreational markets. He said he’s been eyeing at least two locations in Vermont to get started as a licensed grower. 

With a pound of plant material selling for $1,000, he estimates he could pull in up to $40,000 monthly from a Tier 1 Vermont growers licenses with the right setup.

But first, he wants to see how the state will regulate the material.

Over the last year, Vermont’s Cannabis Control Board (CCB) has been steadily releasing the regulatory foundations of the industry, and for people interested in making moves in 2022, they’ve been watching closely.

“The big thing I think that most people are waiting on is the licensing,” Cray said while sitting in the back room of Green Mountain Hemp Company. “They have a committee in place, but they’re withholding a lot of the information on the details until they are for sure – until they are guaranteed on this is how we’re doing it.”

Cray said Green Mountain Hemp Company has been looking specifically to open a retail store in the area for recreational marijuana. But there’s also a few more steps required before that can happen. For one, St. Albans Town voters have to allow the establishment. 

On Town Meeting Day in March, town residents will have the option to approve such establishments thanks to a ballot article.

Licensing fees are another part of the puzzle. The CCB is looking at two fee structures, and those in the local industry are hoping they adopt the lower fees.

And then there’s the THC limit issue. For growers like Slay, the proposed 15% THC limit could be a major limiting factor, which Slay said is what helped shrink the state’s hemp industry. 

Under state regulations, the levels of THC – the primary psychoactive agent chemical in cannabis – in plants grown for hemp fibers must remain under 0.3% for growers to be able to sell their products. Slay said the move forced local farmers in Franklin County to destroy much of their hemp crop because it couldn’t meet the limit, and if the 15% rule goes into place, growing cannabis for the THC markets would be much more risky. 

Since cannabis is a plant like any other, being able to strictly control THC limits when growing is difficult, he said. Also, strains with higher THC percentages typically sell for higher prices, which means higher profits for the growers.

“You don’t have to be the best grower. You can have a crappy grower who’s growing a good strain, and you’ll still make it work,” he said.

No matter how the rules shake out, though, those interested are willing to work within the boundaries.

“We want to be able to go in and follow regulations as closely as possible so that we can get the product and get the things that people need or want available to them as quickly as possible,” Cray said. “And if/when it happens, you’ll likely be seeing my face at the register.”

Nichol said he’s also been watching the CCB regulations closely, and for the most part, he thinks the board has been pretty realistic about the regulatory nuts and bolts of the industry proposed by the state. 

Similar ideas were echoed by Chris Santee, CEO of Colomont CBD, who has an office on Main Street next to the Franklin County Regional Chamber of Commerce.

“We’re in more of a wait and see mode,” Santee said. “Right now, we try to be open in whatever direction they’re going to come. If they want to go left, we’re ready to go left. If they want to go right, we’ll go right.”

Santee has been pulling in funds for large investments in the field. According to the Department of Financial Regulation, Santee raised more than $400,000 from selling allegedly unregistered shares to over 350 individuals between April 2018 and Oct. 2020. 

“We’re looking for new greenhouse space, new warehouse space, new laboratories. We’re looking to jump into this with both feet,” he said.

Retail stores in Franklin County

While state regulations are one thing, the other major obstacle for those looking to set up shop in Franklin County is whether the public approves. 

Nichol, for example, tried to get the retail question on the ballot in the City of St. Albans, and he made little headway on his petition. He jumped into the market in 2019 to rent out mechanical trimmers to growers.

“I had aspirations to be the guy in St. Albans with the retail store,” he said.

He’s since shifted his focus to become a wholesaler working within a Burlington-based network of distributors operating under the name of Ojorojo Cannabis.

With the City of St. Albans looking to position its downtown as a destination, Cray said cannabis could be a major economic driver for more than just retail sellers. 

“We think that it would bring tourism, and that it would bring more jobs,” she said. “Cannabis helps the food industry because it gives people the munchies, and it can help the entertainment industry because there’s a lot of people, who after smoking, want to sit down and just watch a movie.”

Keith Longmore, who owns both Green Mountain Hemp Company and the VT Grow Shop, put it more bluntly.

“Cannabis will save this town and the city and our county as a tourist destination,” he said.

As part of its market analysis of the future cannabis industry, the CCB is estimating that retail sales of recreational marijuana in the state will jump past $200 million by 2024. 

“As the pie is getting clearer, people are pushing to be first in line,” Nichol said. “There are many a grower in Franklin County. There’s going to be a lot of money spent in that area.”

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