[F]rom private clubs to growing gear, pot-focused entrepreneurs still see opportunity despite advice from Vermont’s top prosecutor clamping down on businesses based on marijuana gifts.
In a guidance issued Monday, Attorney General TJ Donovan said that his office considers business models that involve gifts of marijuana along with purchases of another item or a service to be against the law.
While the guidance is likely to chill plans for businesses based around gifts of marijuana, players involved with the budding industry say it will not quell pot entrepreneurship.
Some are exploring opportunities like marijuana-friendly lodging or private member clubs. Others are using the time to get their ducks in a row with the expectation that the state will soon set up a regulated sales system.
Tim Fair, an attorney with Vermont Cannabis Solutions, said Donovan’s announcement hinders hopes of launching an above-board operation in the immediate future for those who want to get into some form of dispensing recreational marijuana.
“Yes it does put a temporary hold on people’s plans. It takes away the ability for trial and error. It takes away the ability for people to start moving forward,” said Fair.
One of Fair’s clients, a young company called Rolling Flower, offered to bring marijuana to customers’ doors in exchange for a delivery fee. After the attorney general’s guidance, Fair advised the company to put a pause on the business.
However, Fair said the attorney general’s assessment about the extents of the law isn’t bad news for businesses hoping to get started in a legitimate pot industry.
“I think it is an opportunity, an opportunity to do it right,” he said. “This time is an excellent time to get ducks in a row.”
Fair is aware of people in ancillary marijuana businesses — people who specialize in equipment and soil for growing pot, whose businesses are not impacted by the attorney general’s announcement.
Donovan’s guidance was well-received by groups that oppose legalization, who had urged restrictions on commercial gifts of marijuana.
Kevin Sabet, of the anti-legalization group Smart Approach to Marijuana, said Tuesday that Donovan’s decision is “sound,” and shows that people in the marijuana industry were not successful in setting up the types of gift businesses that have been tested in Washington, DC, where there is a similar legalization law to Vermont.
“They’re just beside themselves that they cannot pass retail legalization in a state they thought was in the bag for commercialization years ago – Vermonters clearly don’t want retail pot shops littering their towns and communities,” Sabet said.
Yet even with gift business models off the table, marijuana entrepreneurs see plenty of opportunity.
Chris Antoniello, who owns the Brattleboro head shop Harmony Underground with his wife Christine, is readying to open a private members club next month.
Harmony Underground now has a private event hall, where customers will be able to pay membership fees to gather. The club will host events like karaoke and comedy, and aims to foster a community, he said. Antoniello was vague about many details of the enterprise, saying that he is “allowing people to make assumptions.”
“My goal is not to have people here passing weed back and forth,” he said. “The goal of this is to bring likeminded people together.”
The Antoniellos have not made any decisions about what membership fees will be, though he anticipates that they will be “affordable.”
The law is clear that marijuana consumption is not permitted in public, he noted, but it is more permissive at private events. He expects the first event will happen in August.
“I’m networking the people,” Antoniello said. “I’m keeping my hands clean of the gifting thing.”
Antoniello was not interested in testing out the gift-for-purchase model at his shop. It would be a risk for the business, a decades-old operation, to take on, he said.
However, the shop does have a charge-free riff on the take-a-penny-give-a-penny cup — a jar containing marijuana kept behind the counter.
“We have take a nug, give a nug,” he said.
No purchase is required to partake, but consumers do need to show an ID to verify that they are age 21 or older, in compliance with state law. The shop has only had the jar out for a few days, but it’s already supplied a handful of out of state visitors, passing through.
Meanwhile, businesses related to marijuana but not directly involved with distributing it are flourishing since legalization came into effect.
Stephanie Waterman, who co-owns White River Growpro with her husband, says sales at the White River Junction shop have tripled.
The couple opened the business in 2014 in anticipation of legalization. They sell equipment for people looking to start their own home grow operations, and host free workshops to help new growers get started.
Beginning July 1, Waterman said, they began offering customers a gift of marijuana seeds when they purchased a home grow package — a bundle of equipment and gear that runs just shy of $1,000.
There was no extra charge for seeds, she said. It was offered as a gift for those who wanted it.
Following the attorney general’s guidance, the store has put the seed gifts on hold.
“We don’t want to do anything that would put our business in jeopardy,” Waterman said. “We want to play by the rules and we want to participate.”
Waterman does not expect the change will reduce the flow of business. Their goal is to help people grow at home. It’s up to customers to find seeds on their own, which many people find through the internet.
Donovan’s advice did not do much to clear up a plethora of confusion about what is allowed under the current law, she said.
Waterman expects to see lawmakers debate a taxed and regulated market when they return to Montpelier next year, and hopes they pass legislation setting up a system by next summer.
“I’m hoping that some of this gray area that they’ve created will kind of light a fire under them,” she said.