Ask Our Experts: Vermont’s Adult-Use Program Activation


Q: What impact might Vermont’s new passage of adult-use reform mean for the larger U.S. legal cannabis market?

By Noah Tomares, Research Analyst, New Frontier Data

A: Proponents of legal cannabis in Vermont received a win last week with Gov. Phil Scott’s surprise announcement that he will not stand in the way of S.54, a bill legalizing cannabis sales statewide. Though Vermont passed legislation for adult use, possession, and personal cultivation in 2018, no frameworks for legal production and sales had been established.

Gov. Scott declined to sign the bill—citing several concerns including racial justice and the safety of cannabis vaping products—but likewise declined to veto the measure, which many had expected. It will go into effect without his signature, allowing for the eventual implementation of a legal adult-use market.

Under the bill, a new Cannabis Control Commission will issue licenses for retailers, growers, manufacturers, wholesalers, and labs. Local jurisdictions will need to opt in to allow cannabis businesses to operate, and municipalities will be able to establish their own regulations and licensing requirements. In addition, it imposes a 30% THC limit on cannabis flower, and a 60% limit on oils.

The governor did sign a separate expungement bill, which automatically clears the records of those convicted for marijuana possession of up to two ounces, four mature plants, and eight immature plants prior to Jan 2021.

Gov. Scott said “This has been a top priority for the majority in the legislature for four years, but their work is not complete. They must ensure equity in this new policy and prevent their priority from becoming a public health problem for current and future generations.”

There will be plenty of time to address the governor’s concerns. While a timeline for the legislation states that it formally takes effect as of Oct. 1, 2020, dispensary licenses can be issued as late as Oct. 1, 2022. While the lengthy runway provides ample opportunity to tweak the legislation, it may also afford the existing unregulated market to further entrench itself.

The reform stands in stark contrast to that in Illinois, which also legalized retail sales through its legislature. In May 2019, the Illinois General Assembly passed the Illinois Cannabis Regulation and Tax Act. Sales began on Jan 1, 2020—barely 6 months after the legislation was signed. Since then, cannabis sales have grown dramatically. New month-over-month records have been set for both in-state and out-of-state resident sales.

If Vermont can accelerate its timetable, sales in the state could grow rapidly. Assuming that sales begin Jan 2022, recreational sales project to topping $68 million that year. By 2025, sales would expectedly more than double, to $178 million.

Furthermore, Vermont will expand the reach of legalized adult-use access in New England by joining Massachusetts (which began sales in 2018) and Maine (where sales just began on October 9). It may also become the first of several states in play to legalize cannabis sales this winter. Five states have ballot initiatives representing an additional $9 billion to the U.S. legal cannabis market. More detailed information is available in New Frontier Data’s electoral analysis here.