(MONTPELIER, Vt.) On Friday, the Vermont Cannabis Control Board (CCB) provided a first look at the range of proposed license fees for legal THC cannabis businesses in 2022.
The fees were proposed in cooperation with VS Strategies, a consulting firm with whom the CCB contracted to create a financial and licensing model that would attempt to estimate the state’s overall demand for legal THC products, which is currently estimated at 400,000 – 500,000 square feet of total canopy.
Andrew Livingston of VS Strategies joined Commissioner James Pepper and broke down multiple scenarios for both cannabis production and cannabis demand, including using different ratios of indoor and outdoor cannabis.
Presently, the model anticipates 70-80% of the state’s cannabis would come from indoor cultivation, including supplying cannabis in the summertime when demand spikes, but outdoor cannabis is not yet harvested.
However, Livingston explained that the model, while detailed and comprehensive, is flexible to adapt to those changes.
“80/20 or 70/30 are not hard and fast — we can change these ratios based on what happens with licensing and we know that in Vermont there’s interest in supporting outdoor cultivation.”
Another factor in Livingston’s presentation and financial model was the acknowledgment of the annual shift in the price of cannabis each year, including the summertime price spikes (aka the drought) and the fall harvest season.
There was also discussion about the size of cultivation areas based on ‘total canopy’ versus ‘flowering canopy’ — the former is currently the metric, while the former is favored by cultivators and producers.
The detailed discussion with Livingston included detailed models and estimates for prices of cannabis, potential production, and new licensing.
Public comment included broad support for the definition of ‘flowering canopy’ as the total metric, along with questions about the prices used in his model — upwards of $2000 per pound — and the support for adding an intermediate cultivation tier size and capping the size of indoor cultivation at 20,000 square feet.
Additional license tiers were not discussed in as much detail as cultivation, but the fee proposals themselves include a higher and lower cost based on the expected revenue generated from cannabis sales versus — ideally with more tax revenue meaning lower fees.
It’s important to note that the proposed fees are not finalized; however, the board expects to move quickly and vote on proposed fees in the next two weeks.
POTENTIAL RETAIL LICENSE FEES
POTENTIAL MANUFACTURING LICENSE FEES