Entering the Legal Craft Cannabis Cultivation Market (VT)

[yardgrazer]

I've been doing some digging into what it would take to get a Tier 1 outdoor craft cannabis license and thought it might be helpful to others, and likewise thought perhaps others have been looking into it as well and their insights might benefit me in thinking through all of this, and anyone else who has been looking into it.

Here's a taste of what I've found so far: applicants can begin the process on April 1st 2022. There is an online form to be filled out. Some basic costs include: $1000 non-refundable application fee, $750 annual Tier 1 outdoor permit fee, possibly a $100 local fee (again, probably annual), $125 to the secretary of state's office for business license (annual). If growing on land you live on, $10k in escrow (it's unclear to me what this is for exactly, it may be to remediate should you shut down operation). Possibly insurance? A little unclear about the insurance requirement when growing on land you live on. There are annual fees to the CCB for principal, investor, and employee licensing. Probably other fees I'm not even thinking about yet. Can probably plan on 1000-1500 per year in annual fees.

Things a person would need to do: open a bank account (from what I've heard this has been difficult), open an account to hold collected taxes, obtain a federal tax ID for the business if you will have employees. Write a business plan.

Expenses a person will incur at some point before harvest: METRC related fees (seems like about 50 cents per plant for the required tags, unsure about fees for packaging etc); Packaging material for finishes product (I looked into this a little); expenses related to harvesting and drying. Testing costs: not sure what the fee structure will look like in VT, and what tests will be required. Judging from MA this would probably be around $500 per tested batch, could be more depending on what tests are required.

Longterm costs: Maybe a person could get away with not having a greenhouse the first summer, but a greenhouse would be necessary longterm. $10-15k for a well-equipped 1000 square foot greenhouse seems like a reasonable approximation to me. My thought is you'd taken any profit from the first season and put it all back in to improving the system for the future.

Known Unknowns: What is the market going to look like in terms of how sales happen: i.e. would a wholesaler be involved? That cuts into price. Would it be possible to build relationships with retailers and sell direct? That might lead to better pricing. Will the market get flooded and profitability go in to the toilet? That's a strong possibility, though the model the CCB is using right now involves so much rigamarole one has to wonder how many people will bother getting in?

 

[Goodherb]

I've been doing some digging into what it would take to get a Tier 1 outdoor craft cannabis license and thought it might be helpful to others, and likewise thought perhaps others have been looking into it as well and their insights might benefit me in thinking through all of this, and anyone else who has been looking into it.

Here's a taste of what I've found so far: applicants can begin the process on April 1st 2022. There is an online form to be filled out. Some basic costs include: $1000 non-refundable application fee, $750 annual Tier 1 outdoor permit fee, possibly a $100 local fee (again, probably annual), $125 to the secretary of state's office for business license (annual). If growing on land you live on, $10k in escrow (it's unclear to me what this is for exactly, it may be to remediate should you shut down operation). Possibly insurance? A little unclear about the insurance requirement when growing on land you live on. There are annual fees to the CCB for principal, investor, and employee licensing. Probably other fees I'm not even thinking about yet. Can probably plan on 1000-1500 per year in annual fees.

Things a person would need to do: open a bank account (from what I've heard this has been difficult), open an account to hold collected taxes, obtain a federal tax ID for the business if you will have employees. Write a business plan.

Expenses a person will incur at some point before harvest: METRC related fees (seems like about 50 cents per plant for the required tags, unsure about fees for packaging etc); Packaging material for finishes product (I looked into this a little); expenses related to harvesting and drying. Testing costs: not sure what the fee structure will look like in VT, and what tests will be required. Judging from MA this would probably be around $500 per tested batch, could be more depending on what tests are required.

Longterm costs: Maybe a person could get away with not having a greenhouse the first summer, but a greenhouse would be necessary longterm. $10-15k for a well-equipped 1000 square foot greenhouse seems like a reasonable approximation to me. My thought is you'd taken any profit from the first season and put it all back in to improving the system for the future.

Known Unknowns: What is the market going to look like in terms of how sales happen: i.e. would a wholesaler be involved? That cuts into price. Would it be possible to build relationships with retailers and sell direct? That might lead to better pricing. Will the market get flooded and profitability go in to the toilet? That's a strong possibility, though the model the CCB is using right now involves so much rigamarole one has to wonder how many people will bother getting in?

Interesting,yardgrazer. I'm in a different country than you (tropics 13 degrees N) saint Vincent and the grenadines. I applied for a license , although it's under the medical marijuana banner, room is there for one's to manoeuvre in other aspects. So I'm looking to go in the direction of "craft cannabis cultivation market" myself.
Hopefully soon, it'll be issued to us.

The license fee is $30 us dollars, an annually the same, only to traditional cultivators.

They're foreign companies here , their initial fees/annuals are exponentially high , different tiers of course.

Yardgrazer, may your path ,be cut an clear.
All the best!

 

[yardgrazer]

Huh, that's an interesting approach, different pricing for locals vs foreign corporations. Vermont's stated goal was to support small growers (in theory to draw people out of supplying the black market) and disadvantage large corporate growers, but the legislature was a bit conflicted in that they wanted to make sure the existing medical dispensaries weren't disadvantaged (and in fact were greatly advantaged), and they're always interested in supporting the state's existing non-cannabis farmers so they wanted to work them in as well. I can't remember what happened with it but I think initially there was a proposal to only issue Tier 1 licenses (i.e. for "small" growers, 1000 sf or 125 plants) in the first round, hoping that if they have enough Tier 1 growers they might be able to have primarily small growers supplying the legal retail market.

Anyway, some of the medical dispensaries are owned by multinational companies.

Also, while a person could argue the amounts of money they're talking about is approachable when compared to other states, we're still talking about large amounts of money, more than the average VTer could easily come up with. Not to mention if you're already growing "illegally" and selling it, you're making money... why pay the state a ton and expose yourself to all sorts of trouble?

Also the US is complicated because cannabis is still illegal on the federal level, and normal things like banking and credit card processing are difficult (the former) or impossible (the latter) to obtain. Also, you're supposed to pay federal income taxes on illegal businesses, but you can't deduct expenses like a legal business can.

 

[Goodherb]

The complexity's of layers of the money's involve, huh.
Yes, the banking issues touches all lands , because of corresponding banking. That'll always be an hot burner,until the lobbyist(including the other vice's peddlers/pushers ,gets their share ; cigarettes/alcoholic beverages industries) gets their ways ,then some politicians, go's on television an says that finally ,we have a bill ,that is groundbreaking and comprehensive. At that particular time your federal government , will pass/in acts new laws democratically of course. ​
​​​​​​

So til then,we just keep on blazing.

Goodherb; grow on, grow strong.
​

 

[yardgrazer]

Huh, well, we can strike one expense from my list... I was looking at the METRC website last night and it doesn't look like they've partnered with VT yet. I had heard something about there being something of a grace period for cultivators the first year for track-and-trace, but I didn't realize they meant they hadn't set things up with METRC yet.

 

[yardgrazer]

Some additional expenses not in my first post, the cost of a background check with the feds: seems like $43 is the cheapest you can go (also, slow as all get out), or $68 if you want to move things along and are near a post office that can take electronic prints (read: you're near BVT or are willing to drive).

Also, insurance is likely going to be crazy expensive (the first quote I got was for $3k, waiting on a second quote). I saw that the board may be doing something to reduce the burden on small cultivators, but I don't think this is something you want to cheap out on.

 

[robinkyle11]

I have been doing some digging into what it would take to get a Tier 1 outdoor craft cannabis license and thought it might be helpful to others, and likewise thought perhaps others have been looking into it as well and their insights might benefit me in thinking through all of this, and anyone else who has been looking into it.

Here's a taste of what I've found so far: applicants can begin the process on April 1st 2022.There is an online form to be filled out. Some basic costs include: $1000 non-refundable application fee, $750 annual Tier 1 outdoor permit fee, possibly a $100 local fee again, probably annual, $125 to the secretary of state's office for business license annual.

If growing on land you live on, $10k in escrow it's unclear to me what this is for exactly, it may be to remediate should you shut down operation.Possibly insurance? A little unclear about the insurance requirement when growing on land you live on.There are annual fees to the CCB for principal, investor, and employee licensing. Probably other fees I'm not even thinking about yet. Can probably plan on 1000-1500 per year in annual fees.

Things a person would need to do: open a bank account (from what I've heard this has been difficult), open an account to hold collected taxes, obtain a federal tax ID for the business if you will have employees. Write a business plan.

Expenses a person will incur at some point before harvest: METRC related fees (seems like about 50 cents per plant for the required tags, unsure about fees for packaging etc); Packaging material for finishes product I looked into this a little); expenses related to harvesting and drying.

Testing costs: not sure what the fee structure will look like in VT, and what tests will be required. Judging from MA this would probably be around $500 per tested batch, could be more depending on what tests are required.

Longterm costs: Maybe a person could get away with not having a greenhouse the first summer, but a greenhouse would be necessary longterm. $10-15k for a well-equipped 1000 square foot greenhouse seems like a reasonable approximation to me. My thought is you'd taken any profit from the first season and put it all back in to improving the system for the future.


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[radioman]

With all the startup costs and taxes - How much is a "nickel bag" of weed going to cost? a $100? - I'm going to stick with growing My 25-30 outdoor plants in the Summer & 20-25 plants indoors in the Winter. I'm not going to buy any of the shit that they are trying to sell (rip-off) to people. I have thousands of Vermont grown seeds to work with - enough to last Me the rest of My life or until I decide to quit smoking. I've been growing weed since 1975 and I have forgotten more than the so-called "grow coaches" even know. I'm all set - I'm all for Legalization but to Me it sounds more like Regulation...

 

[yardgrazer]

I think it's fair to presume that the legal system isn't meant for locals who grow their own - maybe it'll get some business from people who have been buying locally, but most will undoubtedly be from tourists/visitors. Presumably the pricing will be similar to other markets, i.e. once there's competition, 40-65 for an eighth (plus taxes), probably 50-55 to start (plus taxes). Woohoo 1990s pricing.

The real question to me is how many wannabe Tier 1 growers will actually make it through all of the rigamarole and expense and get licensed. Even if they do, will there be enough money in it for them to keep them paying year after year? This was all really poorly thought out (not that I'm surprised).

No doubt this is 100% about regulation and the state getting their piece of the action, hopefully they won't take it upon themselves to go after unlicensed people growing over the legal limit to protect the licensed market.

 

[Petrochemical]

Seriously, I think it's cute that anyone in Vermont that think they're going to deal with Montpelier and be handed even a remote Fair Shake highly diluted. My family from Montreal have property in Vermont it is a nightmare the state government have their head up their ass they have had since the 50s I don't understand what the problem is the justice system in that state is probably so ass-backwards that if they did a diligent diligent investigation into it I'd be completely revamped but then again it's the stepchild of the shitole justice system that this country's enveloped nothing's going to change stay a pirate stay a gorilla hide your s*** don't let the man go anywhere near it and you'll have a better outcome

 

[Petrochemical]

I think it's fair to presume that the legal system isn't meant for locals who grow their own - maybe it'll get some business from people who have been buying locally, but most will undoubtedly be from tourists/visitors. Presumably the pricing will be similar to other markets, i.e. once there's competition, 40-65 for an eighth (plus taxes), probably 50-55 to start (plus taxes). Woohoo 1990s pricing.

The real question to me is how many wannabe Tier 1 growers will actually make it through all of the rigamarole and expense and get licensed. Even if they do, will there be enough money in it for them to keep them paying year after year? This was all really poorly thought out (not that I'm surprised).

No doubt this is 100% about regulation and the state getting their piece of the action, hopefully they won't take it upon themselves to go after unlicensed people growing over the legal limit to protect the licensed market.

Also think about this think about these people that have been one way or another having something or a relationship with the plant and a small little industry where they were helping friends whatever the case may have been to these people in Montpelier that want to write all of this into quote legislation" they've got no clue how things really work they're coming at it from a sit on your hands and stare at a monitor and have everybody's best interest written out in this paperwork it's impossible you mean to tell me that we've got people in Vermont legislation that were hippies at the hog farm, or the Vermont Reggae Fest that are now retired and in Vermont govt?,no no no more like agent provocateur is in the office with special interests so far up their spinal column that they might as well face them on a daily basis come on guys

 

[radioman]

Vermont Reggae Fest! - I used to go to that every year. The Ziontific Summer Solstice Music Festival was cool too when they held it in Stockbridge. Then They moved it to Prospect Mountain outside of Bennington - I went 1 year there but didn't like the hills. After that they moved it to Russell MA. to a boy scout camp and they haven't had it since 2019 because of Covid and they still aren't having this year...

 

[Petrochemical]

I'm just really really overwhelmed and disgusted by the minute you get into it and you start to try an interject some sort of rational mindset towards what's being laid out they try to baffle us with bulshit or just charge so much money that it makes it almost impossible for somebody that's just trying to get by app here the cost of living in this state at least up north is ridiculous

 

[WallyOG]

I'm just really really overwhelmed and disgusted by the minute you get into it and you start to try an interject some sort of rational mindset towards what's being laid out they try to baffle us with bulshit or just charge so much money that it makes it almost impossible for somebody that's just trying to get by app here the cost of living in this state at least up north is ridiculous

I feel the same way, the way the state is doing this disenfranchises those who want to focus on growing great cannabis not waste their time jumping through hoops. The guys with $$$ can afford to pay lawyers to do that for them, but a lot of dedicated small growers will be left out.

 

[Petrochemical]

It aggravates me Wally because I used to dream of cannabis being legal up here I stood freaking fantasize about it it Battery Park I used to sit there eat my beans these fries and sit right next to the 15 lb I think it was a 15 lb can in the Feast of blast the English out of Lake Champlain with my family are from Montreal but we call ourselves vermonters I'm not technically a vermonter but I feel like I'm a vermonter, I mean basically what this tells me is that I got to find a small network of people I can get along with and we make our own little Collective and we just start throwing down f****** elbows of top-shelf Hattie's f*** the rest of them I don't need the man involved in my s*** all he cares about getting his quota met. And let's face it at the end of the day I must be an a****** because even covid doesn't like me, lmaopppp

 

[Petrochemical]

With all the startup costs and taxes - How much is a "nickel bag" of weed going to cost? a $100? - I'm going to stick with growing My 25-30 outdoor plants in the Summer & 20-25 plants indoors in the Winter. I'm not going to buy any of the shit that they are trying to sell (rip-off) to people. I have thousands of Vermont grown seeds to work with - enough to last Me the rest of My life or until I decide to quit smoking. I've been growing weed since 1975 and I have forgotten more than the so-called "grow coaches" even know. I'm all set - I'm all for Legalization but to Me it sounds more like Regulation...

Grow coaches
Rofl i met mine at craftsbury fiddlers contest
Rule #1 leave em alone lol