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

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.

Morgan True

Comment Policy

VTDigger.org requires that all commenters identify themselves by their authentic first and last names. Initials, pseudonyms or screen names are not permissible.

No personal harrassment, abuse, or hate speech is permitted. Be succinct and to the point. If your comment is over 500 words, consider sending a commentary instead.

We personally review and moderate every comment that is posted here. This takes a lot of time; please consider donating to keep the conversation productive and informative.

The purpose of this policy is to encourage a civil discourse among readers who are willing to stand behind their identities and their comments. VTDigger has created a safe zone for readers who wish to engage in a thoughtful discussion on a range of subjects. We hope you join the conversation. If you have questions or concerns about our commenting platform, please review our Commenting FAQ.

Privacy policy
Thanks for reporting an error with the story, "Medical marijuana, hemp businesses expand in Vermont"