1 year in, has Vermont’s legal cannabis marketplace met expectations?

MORRISVILLE, Vt. (WCAX) - This week marks one year since the start of legal cannabis sales in Vermont. In that year, the industry has grown rapidly, creating jobs and millions in state tax revenues. But has the cannabis industry met expectations? The nearly 70 stores in the state are the most public-facing part of the new marketplace, but behind the scenes are hundreds of growers and cultivators who are now busy harvesting.

In the hills of Craftsbury, Dan Pomerantz shows us around Rebel Grown Farm where rows of cannabis plants are ready to be trimmed.

Pomerantz has been involved with regenerative agriculture in cannabis for decades, but he just got his license to legally grow last year.

“All the hard work and the preparation in the spring, all the hard work that we put in over the summer, this is why we do it, to get to harvest these beautiful plants,” Pomerantz said.

His team has been busy this summer, cultivating 60 strains of cannabis. The flower is then brought to a climate-controlled room where it dries and is then shipped out to be sold as flower or converted into pre-rolls, gummies or other forms of THC.

Vermont’s new cannabis industry was not immune to the soggy summer. Pomerantz says he adapted by raising the beds, channeling water away from the plants and keeping them dry.

Vermont this week marked one year since the beginning of legal sales in Vermont. So far, sales have totaled $67 million in the first 10 months, bringing in more than $9.4 million in taxes. When the market has fully matured, leaders are expecting total sales to approach $120 million. The industry has also created 700 jobs.

Regulators say they are cautiously optimistic about the success of the new industry while keeping an eye on prices, and supply and demand.

“This is an industry that if every other state is a model that consolidates quickly. There’s a high failure rate. Nobody at the cannabis board is popping champagne bottles or resting on our laurels,” said James Pepper, the chair of the Cannabis Control Board.

He says more changes could be coming to the market, such as more ways for cultivators like Pomerantz to sell directly to consumers or on-site consumption permits, or examining whether the state tax rate is too high and keeping some business in the illicit market.

“There’s only so much price elasticity in this marketplace and when people are paying a 20% premium for retail cannabis, that’s about where the pinch point is,” Pepper said.

Reflecting on his first legal year in the business, Pomerantz has high hopes for the industry.

“We really think that the northeast and Vermont can grow outdoor that’s competitive with some of the best cannabis in the world. We just need to test through genetics and varieties and genetics to find the things that are conditioned for this climate and will produce well with our microclimates,” he said.

Industry experts tell me that as encouraging as this first year was, it will still be several years before the marketplace is fully rolled out.