Courts & Corrections

Medical marijuana, hemp businesses expand in Vermont

Timothy Fair
Timothy Fair, a Burlington criminal defense attorney who has formed Cannabis Solutions.

Over the past two years a number of new marijuana-related businesses have registered in Vermont.

The companies have formed in anticipation of pot legalization.

Pot advocates are once again bullish about the prospects for a new law creating a regulated marijuana industry for adult consumption, despite mixed signals from Republican Gov.-elect Phil Scott and uncertainty at the federal level with the election of Donald Trump.

A search of business registrations on the Secretary of State’s website shows 22 companies with cannabis in their title. Fourteen have been registered since 2015, and eight were registered in the past year.

Among them are Cannabis Solutions, a consulting firm created earlier this year by Timothy Fair, a Burlington defense attorney and advocate for criminal justice reforms.

Fair said his firm plans to help small businesses interested in the widely anticipated green rush apply for licenses, comply with regulations, craft their business model and market their services.

“We expect the industry to be very competitive, which is why we think it’s so critical to be ready on day one,” Fair said, “Our goal is to make sure there is an opportunity for Vermonters and Vermont small businesses to get in on the ground floor.”

Many more entrepreneurs could enter a legalized pot sector as consultants, confectioners or cultivators.

A Senate-passed legalization bill last year would have given Vermont’s four current medical marijuana dispensaries priority in applying for new licenses.

That legislation stalled in the House last year, but now that House Speaker Shap Smith has retired, advocates see a way forward in the Statehouse.

Meanwhile, enthusiasm for a legalized market in the near future has spilled over into two other areas: expanded medical cannabis and industrial hemp.

A law that did make it across the finish line last year is expected to expand use of medical marijuana in Vermont. New qualifying conditions for medical pot include the addition of patients in hospice care, glaucoma and chronic pain.

Shayne Lynn, who operates two of Vermont’s four dispensaries, told the website Marijuana Business Daily in June that, based on conversations with dispensary operators in Maine, the addition of chronic pain on its own could more than double his patient count.

Currently Vermont has more than 2,700 registered medical marijuana users, and close to 80 percent rely on dispensaries as opposed to home cultivation. Figures from the Vermont Marijuana Registry peg annual dispensary sales in 2015 at close to $3 million, up from $2 million in 2014.

Marijuana. Photo by Andrew Kutches/VTDigger

Figures for the first six months of 2016 show $1.7 million in revenue.

Earlier this week, the Joint Legislative Committee on Justice Oversight reviewed a variety of proposed changes that would further expand Vermont’s medical marijuana program by allowing doctors to recommend cannabis to relieve the symptoms of any condition, lifting bans on advertising, creating two additional dispensary licenses and allowing dispensaries to operate as for profit companies.

Sen. Dick Sears, D-Bennington, has said he plans to introduce a new bill next year. Matt Simon with the Marijuana Policy Project called the proposed reforms “very positive,” and said he expects they will move on a parallel track with a legalization bill in the House.

At the same time, Lynn and others aren’t waiting for expanded medical marijuana or a legal adult use law to build up a burgeoning industry. For that, they’re turning to hemp and a product known as cannabidoil or CBD.

Last month Vermont Public Radio reported that Evergreen Capital Management, an investment firm spearheaded by Vermont entrepreneurs Will Raap, founder of Gardeners Supply, and Alan Newman, who started Seventh Generation and Magic Hat, plan to invest $250,000 into Hardwick-based Green Mountain CBD.

Green Mountain CBD uses processed hemp to create a cannabidiol oil that it plans to sell in pill form. There is a growing market for CBD products, which are touted as a treatment for epilepsy and other conditions, though the Food and Drug Administration prohibits supplement companies from marketing health claims, according to VPR.

Raap and Newman are members of the Vermont Cannabis Collaborative, a company launched to advocate for legalization. The collaborative produced a white paper on how Vermont’s cannabis industry should be structured, and Bill Lofy, former chief of staff to Gov. Peter Shumlin lobbied for the group in Montpelier last year.

Lynn recently opened retail shops near the Champlain Valley Dispensary in Burlington and Southern Vermont Wellness in Brattleboro that sell CBD and other wellness products.

Though Vermont legalized hemp cultivation in 2013, producers are still in violation of the federal Controlled Substances Act, because Vermont does not have a federally approved hemp pilot program.

“There are some concerns. It is a grey area, but we’re seeing it throughout the country,” said Lynn. “Companies are shipping CBD around the country.”

Lynn operates a lab where some Vermont hemp cultivators are having their product tested to make sure it doesn’t exceed the state’s limit of 0.3 percent tetrahydrocannabinol or THC concentration on a dry weight basis. THC is the chemical in marijuana responsible for the high experienced by users.

Currently, the Vermont Hemp Registry, which is operated by the Agency of Agriculture Food and Markets, has no testing or compliance regime in place to ensure hemp produced locally is actually hemp and not marijuana.

Hemp seeds. Photo courtesy N. White
Hemp seeds. Photo courtesy N. White

“We’re putting the pieces in place to get the testing program up and running,” said Tim Schmalz, plant industry section chief for the agency.

A Shumlin administration spokesman said they hope to have an announcement on testing and compliance in the coming weeks.

Meanwhile, many in Vermont’s nascent cannabis industry believe it’s only a matter of time before pot becomes legal for recreational use. Attorney Ken Merritt serves as the registering agent for a handful of marijuana businesses, some of which are banking on legal pot.

“It’s clear to me that sooner or later marijuana is going to be legal in virtually every state,” Merritt said, “It will happen in Vermont at some point.”

When it does, Merritt’s clients and many others, including Fair and his consulting firm, intend to be ready to capitalize. “I’m not quitting my day job anytime soon,” Fair said.

Correction: An earlier version of this story attributed 2016 revenue figures for Vermont dispensaries to Shayne Lynn. That information comes from the state. The story also stated that Will Raap is the owner of Garden Supply. Rapp is the founder, Garden Supply is employee owned.

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  • Mary Daly

    This is the MOST insane idea I’ve seen in a long time. Vermont and most of the USA have a major drug problem and some are even planning to legalize another drug. This article points out that much of the push is coming from those who plan to make a killing on the result. Apparently they don’t care what happens to their customers. I lived in Denver during the late sixties and early seventies and saw what this drug can do to people. One near genius person I knew who used regularly, realized that it was dumbing down his exceptional brain and stopped using. I have been in cars being driven by someone smoking pot when the driver suddenly slowed the car way down on I70! Apparently everything slows down when a person is stoned. Yes, I tried it, didn’t like it and got sick to my stomach. I certainly didn’t see any up side and stopped trying. And now the THC is stronger than it was then. What are we thinking? The police departments are against it, MD’s are against it. Stop it!

    • John Jacobs

      Is the next showing of Reefer Madness soon?

      Pot is a plant grown from a seed that does no harm to anyone. Your anecdotal story is meaningless.

      The drug war is one of the biggest scams ever sold to American taxpayers, spending trillions over the past 30+ years on the DEA for absolutely nothing. Trillions more spent on prisons, jails, lawyers, judges, probation officers, CPS, civil forfeiture, etc…the list is endless.

      Rather than help our society and spend taxpayer money where it is needed, the government blindly spent to police away the precieved problem because they were ignorant to the facts. Fortunately people began to see through the government propaganda and realized they were being scammed. That’s why millions have voted to change these repressive laws that they know serve no purpose.

      • Asher McLean

        I mean tobacco is a plant. Opium is a plant. Cocaine is plant based. I agree that marijuana legalization isn’t really a big deal, but you guys need a better argument than “it’s a plant! It’s harmless!” That really dumbs down the conversation.

    • Duncan Wallace

      In the 1960s and early 1970s petty possession of cannabis was a significant felony which resulted in a stiff prison term. So Mary, why did you see those things if prohibition wasn’t an epic failure of public policy? What does it take to get the prohibitionist mind to accept that reality? Every time I see someone making similar bogus claims invariably the only evidence that led the person making those bogus claims was the mere presence of cannabis. It’s a classic post hoc ergo propter hoc fallacy.

      Can you please direct me to find the place where these fictional people that have had their lives “ruined” by cannabis exist? It’s been over 39 years since I first chose to enjoy cannabis. In those 3.9+ decades I’ve met a lot of people who also choose to enjoy cannabis, but not even one that has had his life “ruined” because of that choice.

    • robert bristow-johnson

      Hey Mary,

      “Vermont and most of the USA have a major drug problem and some are even planning to legalize another drug.”

      Another?? What are the currently legalized drugs? Nicotine and ethyl alcohol? Caffeine? Refined sugar? Or do you mean currently regulated opioids?

      It’s ridiculous that marijuana is Schedule 1 and neither opioids nor alcohol nor nicotine are.

      BTW, most MDs are for reform of marijuana laws. (Not saying most are for legalization, yet.)

      Condescension (“Stop it!”) doesn’t quite work anymore. You ain’t our mother.

  • Kate Webb

    You assume that “now that House Speaker Shap Smith has retired, advocates see a way forward in the Statehouse.” I soundly disagree with this assumption. As Majority Whip, I spent considerable time discussing this bill with individual members. Speaker Smith as well as the advocates knew that the House simply didn’t have the votes, or come close to having the votes, to pass a bill. Although a few more (but not enough) members would have supported a bill that allowed for home cultivation of two plants, this bill stalled in Appropriations and had already been rejected by the Senate. I would suggest advocates are more likely to see a way forward because 1) the House will have 1-2 years vs. 7 weeks to due its due diligence in developing legislation; 2) Massachusetts and Maine recently joined 6 other states legalizing marijuana, leaving Vermont a bit of an island without an adequate response.

  • Hans Boerma

    Maybe we can go back to democratic principles. If the majority wants to legalize marijuana, as seems to be the case, then our representatives should make it happen. I am not interested in the opinions of our representatives, and suggest they and we listen to what the people want. That is what a ‘representative’ is supposed to do, but we may have lost sight of that.

  • Rick Cowan

    Why exactly does this supposedly progressive state not trust its citizens to vote on such issues? IF we were allowed to do so by our Montpelier masters, we would have done exactly as Massachusetts & Maine have done. But our legislators know better than those who elect them and we meekly wait for them to see the light while other states gain employment, tax revenues and access to the many benefits of legal cannabis.

  • Steve Allen

    The State of Vermont now wants to craft a third iteration of socialized medicine by reimbursing healthcare provides for keeping us “healthy” instead of the current fee for services provided system. In other words, convincing/making us lose weight, quit smoking, take pharmaceutical drugs, etc. And at the same time our liberal\prog legislators want to legalize the usage of marijuana. Really? Medical marijuana and the cultivation of hemp aside, I cannot believe the hypocrisy here.

  • Joel T Bedard

    This was a very well-written piece, to the credit of the author.

    This subject will be in front of the UVM community on 12/1 in the Davis Center at 6p. Point and counterpoints shall be presented, covering rec/med and hemp.

  • The “it’s harmless” and “it’s dangerous” argument is old. Bottom line is that a few people will make a lot of money on this industry. Vermont and some Vermonters will face serious public health consequences. It’s a zero sum game. It will help a few and hurt a few. Most will be ok. Legalization is about $$. Medicalization is about health issues. Massive decriminalizatiin is about criminal justice reform. Whatever happens, let’s direct more funds to addiction treatment and non-pharma based health care (healthy living and prevention initiatives). Legalization would be unanimous if profiteers committed 15-20% of their revenue to addiction treatment and prevention.

    • Adam Haggett

      What are the cost of goods sold and how much electricity is needed? I can’t believe the government is going to give away all the profits after artificially increasing the price of this plant.

      VT should buy several small farms through out the state and cultivate pot in fields and greenhouses. Hire security guards and pay farmers a good wage for the seasonal work.

      Marijuana should be a state owned industry that can be shut down if needed. All profits should directly benefit Vermont’s citizens, not be absorbed into the general fund.

      The state owned dispensers should also be dental offices with free basic services for every Vermonter. Dispensary in the front, dentist in the back.

      The industry must be responsible for underage use and substance abuse prevention programs. All accounting should be transparent and open to public comments. Maybe the CEO should be elected every two years.

      Where is Lt. Zuckgressive elect,

    • What exactly are the serious public health consequences ? Do you believe psychological issues are caused by pot or are the issues already present ? Facts please.

  • Annie Stratton

    There are two different stories here, lumped together. One is about medical marijuana. That one probably should be labeled as health-related. The other is about a fiber used for textiles, rope, and similar items. That one should probably be labeled agriculture/economy. The plants are related but have different properties. The issues associated with each different. It doesn’t make sense to lump them together. It is a little like putting nightshade concerns and tomato markets in the same story. I would like very much to see an intelligently researched and written story (or series) about hemp, the fiber plant, and its potential as a cash crop in Vermont, the obstacles, etc. I am a spinner and weaver and would love to be able to work with Vermont grown hemp fibers, just as I use Vermont-grown alpaca and wool. It’s a matter of Vermont pride.

  • rosemarie jackowski

    It seems to me that every adult should be free to inhale or ingest any substance they want. The big issue is traffic safety. The other issue that is neglected is exact information on how it feels to go through withdrawal…. accurate first hand information, not the ‘Reefer Madness’ type of hype.

    Also, lumping chronic pain patients with addicts has been a mistake. There is a legitimate use for some pain meds.

    • Tom Sullivan

      “It seems to me that every adult should be free to inhale or ingest any substance they want”

      I’m sure that addiction treatment centers would love that statement.

  • I stopped buying cannabis on the “black market” a while ago. No need to support the drug kings. That said I believe Vermonters who choose to do so should be allowed to home grow a couple of plants for their own personal use. Would save a hell of a lot of money, eliminates the illegal drug trade in cannabis and I know the plant is not doctored.