What Are the Cannabis Licensing Requirements in Vermont? (May 2024)

Vermont has embraced the legalization of marijuana for both medical and adult use, paving the way for comprehensive regulations governing the cannabis industry in the state. Below, we outline the key licensing requirements for individuals and businesses looking to participate in Vermont's cannabis market.

Medical Marijuana Licensing:

Medical marijuana in Vermont is governed by 18 V.S.A. § 4471 et seq. The Department of Health and the Commissioner of Health oversee medical cannabis regulations, which can be found in Vermont Administrative Code 17-2-3:3 et seq. To obtain a medical prescription card, individuals must:

• Be diagnosed with a debilitating medical condition by a healthcare professional within a bona fide healthcare professional-patient relationship.
• Submit applications to Vermont's Cannabis Control Board for approval.
• Obtain a medical use card permitting the use of cannabis for medical purposes.

Prospective medical cannabis dispensaries can apply for licenses, subject to various criteria. The state considers factors such as the applicant's business plan, facility information, financial development plan, convenience for residents needing medical cannabis, and cultivation plans to ensure patient needs are met. Principal board members and officers must be residents of Vermont. Vermont law also limits the number of medical dispensary licenses, with five currently registered, and recently, existing dispensaries were allowed to open second locations. The state will open applications for a sixth dispensary once the patient count reaches 7,000 (as of June 25, 2021, there were 4,767 registered patients).

Dispensaries must operate on a nonprofit basis, working for the mutual benefit of patients. Additionally, there are limitations on the number of marijuana plants and the amount of usable marijuana that dispensaries can cultivate and possess, depending on the number of registered patients they serve.

Adult-Use Cannabis Licensing

Adult-use cannabis legalization in Vermont was accomplished through legislative action, not a voter initiative. HB 511, codified as 18 V.S.A. § 4230, legalized adult-use cannabis, effective July 1, 2018. Then, on January 1, 2021, SB 234 expunged criminal records related to minor cannabis possession offenses and decriminalized possession of up to two ounces of cannabis for adults, doubling the legal limit.

In June 2021, Vermont passed SB 25, establishing a tax-and-regulate system for adult-use cannabis, with retail sales commencing in 2022. SB 25 includes a social equity provision aimed at supporting small businesses and minority-owned enterprises in the cannabis industry.

These regulations have created a comprehensive framework for the cultivation, sale, and use of cannabis for both medical and adult purposes in Vermont, emphasizing transparency, patient access, and social equity within the industry.

License Tiers

The Board establishes the following tiers for cultivation, retail, and manufacturing licenses.

Cultivation License Tiers  

(a) Outdoor Cultivation:

• Tier 1 Max Sq Ft of Total Plant Canopy   1,000
• Tier 2- 2,500
• Tier 3-  5,000
• Tier 4 – 10,000
• Tier 5-  20,000
• Tier 6 – 37,500

(b) Indoor Cultivation:

Tier 1 Max Sq Ft of Total Plant Canopy   1,000

Tier 2 – 2,500

Tier 3- 5,000

Tier 4 – 10,000

Tier 5-  15,000

Tier 6 – 25,500

Mixed-Use Cultivation Licensing

For holders of mixed-use cultivation licenses, they are authorized to cultivate cannabis in a combined indoor and outdoor setting. These licensees can manage up to 1,000 square feet of indoor cultivation plant canopy while simultaneously cultivating up to 50 plants outdoors at the same location.

Retail License Categories

(a) Retail – Storefront: This category represents a standalone retail establishment exclusively dedicated to the sale of Cannabis and Cannabis Products to consumers. Additionally, a Retail – Storefront licensee is authorized to offer all the products that a Retail – Nursery may sell.

(b) Retail – Nursery: This tier grants the licensee the privilege to distribute seeds and clones to home cultivators or other licensees.

Manufacturing License Categories

(a) Tier 1 Manufacturer: A Tier 1 Manufacturer is permitted to purchase, process, manufacture, transfer, and distribute Cannabis, as well as finished and in-process Cannabis Products, exclusively to other Licensees, with no direct sales to consumers allowed. This category allows a Tier 1 Manufacturer to employ all lawful methods of extraction in the production of Cannabis Products.

(b) Tier 2 Manufacturer: A Tier 2 Manufacturer is authorized to purchase, process, manufacture, transfer, and distribute Cannabis, along with finished and in-process Cannabis Products, exclusively to other Licensees, without the option for direct sales to consumers. Within this category, Tier 2 Manufacturers are permitted to employ specific methods for extraction, including:

1. Water-Based Extraction: This method involves extraction utilizing only water, ice, or other approved freezing substrates or processes as sanctioned by the Board.
2. Food-Based Extraction: Extraction using substances such as propylene glycol, glycerin, butter, coconut or olive oil, other common cooking fats, or approved forms of alcohol, as specified by the Board.

iii. Heat/Pressure-Based Extraction: Extraction that employs heat and/or pressure methods, subject to approval by the Board.

Common License Application Requirements

The stipulations outlined in this section are applicable to all license types.

Operating Plans

Applicants are obligated to submit a comprehensive operating plan, encompassing all the prerequisites. Additionally, applicants must include the following elements, where not explicitly required by the aforementioned provision:

(a) The legal name of the proposed Cannabis Establishment, along with any registered alternate business names.

(b) Identification of the primary point of contact with the Board, including their name.

(c) Specification of the license type sought, along with the relevant license tier if applicable.

(d) Presentation of documentation confirming the applicant's status as an entity duly registered to conduct business within Vermont.

(e) Disclosure of the federal tax identification number.

(f) Compilation of a roster of the principal individuals associated with the proposed Cannabis Establishment.

(g) Compilation of a roster of all individuals exercising control over the Cannabis Establishment.

(h) Presentation of documentation and a detailed description, including the parties involved, of any contractual, management, or similar agreements that explicitly or implicitly confer control over the Cannabis Establishment.

(i) For each individual identified in subsections (f) through (h) of this provision, the application must clarify whether the same person would need to be identified in accordance with subsections (f) through (h) of any other license application.

(j) The application must also include documentation disclosing whether any person listed in subsections (f) through (h) of this provision holds a controlling interest in a past or current Cannabis-related business in another jurisdiction.

License Application Requirements for Cultivators

The following criteria pertain to applications for a cultivator license.

Location Information

In addition to the prerequisites outlined in subsection 1.4.5 of this regulation, applicants must provide the following:

(a) A clearly legible diagram or site plan of the physical operational site, featuring: i. A north arrow. ii. A standard scale. iii. Property size in acres (for outdoor cultivators) or total square feet (for indoor cultivators). iv. Dimensions of the total plant canopy. v. For outdoor cultivators, the utilization of land and structures on the property. vi. For indoor cultivators, a diagram outlining the usage of non-cultivation areas within the facility.

(b) A map delineating the boundaries of the planned growing area, applicable solely to outdoor cultivator Tiers 2-6.

(c) Compliance with Rules regarding visibility from a public road for outdoor cultivator locations.

Water and Wastewater Requirements:

General water supply and municipal wastewater requirements apply as follows:

(a) Cultivators reliant on municipal water supply must furnish a letter from the water utility certifying their capacity to provide sufficient water at the operational site.

(b) Cultivators utilizing municipal wastewater or other offsite wastewater systems must provide a letter certifying the wastewater system's capacity to accommodate the anticipated volume and strength of wastewater from the operational site.

Tier 5 and 6 Cultivator applicants must:

(c) Specify their plans regarding water withdrawal, means of withdrawal and storage, and on-site water usage for employees' potable/sanitary purposes, along with an estimate of the number of daily on-site personnel.

(d) Detail the volume and strength of anticipated wastewater generation, outlining the treatment and disposal methods. Utilize design flows from the Wastewater System and Water Supply Rule where applicable.

(e) Specify whether compliance with the Indirect Discharge Rules and Underground Injection Control Rules by the Department of Environmental Conservation is necessary.

(f) Describe the intended methods for collecting, storing, treating, and discharging wastewater.

Indoor Cultivators

Indoor cultivation Cannabis Establishments must specify whether their water supply and wastewater systems must comply with any relevant portions of the Department of Environmental Conservation's Drinking Water and Groundwater Protection Division rules.

For applicants, this comprehensive list of requirements helps ensure transparency and adherence to regulatory standards.

License Application Requirements for Manufacturers

This section pertains to applications for a manufacturing license.

Manufacturers must furnish a list of intended production items and their means of production, utilizing a format determined by the Board.

License Application Requirements for Retailers

These requirements relate to applications for a retail license.

Retailers are obliged to provide: (a) A list of intended sale items. (b) An indication of whether any intended sale item contains CBD, hemp, a hemp-derived compound, or is a non-intoxicating consumable item.

License Application Requirements for Testing Laboratories

This section applies to applications for a testing laboratory license.

Applications for testing laboratories may undergo qualification review by the Board or a designated Board representative. At its discretion, the Board may waive or reduce licensing requirements, including fees, for laboratories holding current certification under the Vermont Agency of Agriculture, Food and Markets' Cannabis Quality Control Program.

A testing laboratory applicant must submit:

(a) Current laboratory accreditation certificates or proof of certification under the Cannabis Quality Control Program established by the Vermont Agency of Agriculture, Food and Markets.

(b) A laboratory quality assurance manual or procedures outlining the lab's quality control system and a summary of the quality management system.

(c) Standard operating procedures for analyzing Cannabis and Cannabis Products.

(d) A master list of all analytical and non-analytical standard operating procedures, including revision and review dates.

(e) Documentation of educational and technical credentials for key technical and management personnel.

(f) An organization chart, including reporting relationships.

(g) Example Certificates of Analysis (CoA) for each test area, containing all required CoA information.

(h) The most recent proficiency results for Cannabis testing or similar matrices, if available.

(i) Proof of analytical proficiency.

License Application Requirements for Integrated Licensees

These requirements apply to applications for an integrated license.

Integrated license applicants must satisfy all requirements outlined in sections 1.4-1.8 of this regulation, in addition to submitting the following:

(a) A plan to provide reduced-cost or free Cannabis to patients with documented financial hardship utilizing the dispensary operation.

(b) A plan to ensure that 25% of Cannabis flower sold is obtained from Tier 1 cultivators.

(c) A list of products purchased by registered patients in the preceding 12 months.

(d) A plan to ensure continuity of products for patients accessing the dispensary operation.

(e) A plan to contribute $50,000 to the Cannabis business development fund by October 1, 2022.

(f) An attestation of good standing with respect to their medical Cannabis dispensary license. For the purpose of this subsection (f), good standing implies compliance with Chapter 86 of Title 18 of the Vermont Statutes and associated rules.

For full information on cannabis licensing requirements in Vermont, check here.