Vermont to Halt Licensing of Larger Cannabis Grows to Protect Small Farmers

Vermont regulators won’t be issuing any large-scale cultivation licenses for the foreseeable future in an effort to protect the state’s smaller farmers.

Cannabis Control Board (CCB) Chairman James Pepper said regulators are halting licensing for larger indoor and outdoor growers to avoid an oversupply of cannabis in the state, according to a Vermont Public report.

“Whatever we do on the supply side should really be targeted at those small cultivators—the small farmers and the social equity applicants—to allow them to kind of fill whatever the remaining capacity we have,” Pepper said.

The CCB will close the application window Nov. 24 for Tier 4 indoor cultivation licenses and Tier 4 and Tier 5 outdoor or mixed cultivation licenses, the Bennington Banner reported.

Pepper said the CCB is basing its decision on research showing that roughly 1.3 to 2 grams of cannabis should be supplied for every 1 gram of demand, according to the news outlet.

“This moderate oversupply helps prevent there being an undersupply if there was a particularly wet summer and fall, if there’s widespread disease, fungus, and also just to allow unsuccessful businesses to exit the market," he said.

CCB Executive Director Brynn Hare said cultivation license renewals are proportionate with the number of current cultivation licenses that regulators have issued, according to the Bennington Banner.

The CCB issued 392 total cultivation licenses, 305 of which are small growers and 274 of which are outdoor or mixed.

Hare said there has been a 25,000-square-foot increase in outdoor grow capacity between August and October, the Bennington Banner reported, as well as a 14,000-square-foot increase in indoor capacity since August.

“I think we have a year under our belt and understanding where that business interest is, where the sweet spot is for a lot of folks that are operating in this legal community,” CCB member Kyle Harris said, according to the news outlet. “I've heard some qualitative information that some of the smaller growers are starting to struggle to find somebody to buy their product at a price point that works for them, especially if it's under a certain THC percentage.”

Harris added that he wants to help Vermont’s legal growers “grow and succeed, and utilize their full capacity and their full canopy, without somebody coming in and cutting them off at the knees.”

Hare said the state’s licensed cultivators are currently around 33% utilization of indoor canopy capacity and around 75% outdoor canopy utilization.

Vermont lawmakers decriminalized the possession and cultivation of small amounts of cannabis in 2018, and Gov. Phil Scott permitted legislation to become law without his signature in 2020 to establish the commercial production and retail sale of cannabis in the state.

The CCB began issuing the first adult-use cannabis business licenses in the spring of 2022, and commercial sales launched that fall. The state’s retailers had racked up $10.37 million in cannabis sales as of August 2023.

The CCB plans to review the cultivation licensing moratorium in the spring, Vermont Public reported.