Vermont’s Cannabis Control Board voted to close its pre-qualification window for cannabis licenses on May 31, which coincides with the date when formal applications for all cannabis license types, with the exception of retail, will be available to the public.
“As of this morning, there have been 643 total applications submitted. Of those, 371 are incomplete in some form or another,” said CCB chair James Pepper during the board’s April 18 meeting. “Either the documents have not been uploaded and the fee has not been paid.”
Pre-qualification, which costs $500, is not required by the state, but it exists as an option for prospective cannabis operators to allow them a head start on criminal background checks and to obtain a bank account for the business.
The CCB began accepting license applications on April 1 for small cultivators, testing labs, and existing medical license holders that wish to enter the adult use market. In the 17 days that have followed, the state had received 56 applications as of April 18, according to Pepper.
“It looks like we have healthy numbers among all aspects of pre-qualification,” said Peper. “We as a Board really need to start focusing on approving operating licenses.”
Brynn Hare, executive director of the CCB, noted that the organization was in the process of hiring new employees to better facilitate the approval process.
“We’re going to have more capacity to collect and report data soon,” she said. “This is really a work in progress.”
The CCB also approved new guidance for cannabis license holders that would require them to deposit a cash into an escrow account to cover the costs of ceasing operations in the event that a cannabis company goes out of business or loses its license.
“This is a controlled substance. It is federally illegal and if a business has to abruptly shut or their license is revoked, we need to have some assurance that the product is not going to end up on the illicit market,” said CCB chair James Pepper. “If we do need to revoke a license or a business fails, we need to have some assurance that the bill doesn’t get passed onto the state or the CCB for proper disposal of this controlled substance.”
Under this model, retailers, wholesalers, integrated licensees, tier 3 manufacturers, and cultivators at tiers 4-6 would pay $5,000. Tier 2 manufacturers, as well as tier 2-3 cultivators would pay $2,500. Tier 1 cultivators, tier 1 manufacturers and testing labs would have this fee waived.
“I’m sensitive to requiring a small business to set too much aside in an escrow in early years because they’re young businesses and they’ll want to reinvest in order to grow,” said board member Julie Hulburd. “I think it’s the right break down in license types. I’m thinking that if someone was really going to cease operations, they would have assets, right?”
Tier 1 cultivators, tier 1 manufacturers and testing labs would not have to set aside cessation of operation funds due to the small amount of cannabis that they would likely have to destroy if they were to cease operations.
“It seems to me that they’re not cultivating, they have samples,” said Pepper.