When Vermont officially opened its adult-use cannabis market in October 2022, hopes were high, both literally and figuratively. With a carefully planned rollout led by the Vermont Cannabis Control Board (CCB), the state positioned itself as a thoughtful, regulation-forward entry in the growing national landscape of legal weed. Nearly two years later, it’s time to take stock: How is the industry doing?

What’s gone according to plan? And where does the industry go from here?

A PROMISING START VIS A VIS TAX REVENUES

Early revenue estimates were modest. In fact, the state initially expected just $130,000 to $250,000 in cannabis tax revenue for fiscal year 2022. Those projections were quickly blown out of the water. In the last quarter of 2022 alone, Vermont brought in over $6.1 million from adult-use cannabis sales. By the end of 2023, that number climbed to more than $15 million.

Those funds come primarily from the 14 percent excise tax on retail cannabis, along with the standard 6 percent state sales tax. Starting this fiscal year, 30 percent of the excise tax revenue, up to $10 million, will support substance use prevention programs through the Department of Health. The rest goes to Vermont’s General Fund, which supports everything, from public infrastructure to local services.

IS THE MARKET THRIVING? YES… WITH CAVEATS

In terms of both revenue and attention, Vermont’s cannabis industry is holding its own. Sales for 2023 topped $108million, and the sector added around 700 jobs. The state now has dozens of licensed growers, processors, and retailers.

However, the application process for both new retail and cultivation licenses is currently paused due to concerns about market saturation. The CCB issued public statements explaining the decision, which include plans to assess retail density and overall license volume.

“From the inception of Vermont’s adult-use cannabis market, there has been a greater emphasis on small, craft growers compared to other states,” says Patrick Crowley, outreach and education manager at the CCB. “This culture of quality and craft in Vermont has been true for other products, such as cheese and beer, and it’s also true for cannabis.”

Still, the market has had its ups and downs. Challenges like high taxes, tight margins, supply chain hiccups, and persistent competition from the illicit market, still remain. In a 2023 interview with WCAX, James Pepper, chair of the CCB, acknowledged the industry’s growing pains. “This is an industry that, if every other state is a model, consolidates quickly. There’s a high failure rate. Nobody at the cannabis board is popping champagne corks or resting on our laurels,” he says.

 

REGULATING RESPONSIBLY

The CCB has been busy not only issuing licenses but also enforcing the rules. In one high-profile case, after consumers reported feeling ill, the board investigated Holland Cannabis. Lab results revealed contamination from unapproved pesticides, prompting a product recall and further scrutiny into the company’s practices.

The situation raised larger questions about the CCB’s authority to enforce quality standards. Some in the industry have pushed back, questioning whether the board is overstepping its authority. However, the CCB maintains that protecting public health and ensuring consistent standards are essential. At the same time, the board continues to support small and equity-focused businesses through educational resources, streamlined application processes, and consulting services.

WHAT'S NEXT FOR THE INDUSTRY IN VERMONT?

Looking ahead, the CCB plans to open its own State Reference Lab by the end of the year. “The addition of a cannabis lab will enable the state to increase the scope and frequency of quality assurance testing throughout the supply chain,” Patrick says. The Vermont Legislature is also considering a cannabis farmers’ market, which could provide more direct-to-consumer opportunities for small cultivators and manufacturers.

While potency caps and other adjustments remain the priority, community support is on the agenda. To that end, approval of applications for both retail and cultivation licenses have been paused temporarily as the CCB evaluates Vermont’s capacity for sustainable growth.

WHAT DOES THIS MEAN FOR CONSUMERS?

For most Vermonters, the cannabis experience has improved significantly. There are now high-quality, locally produced products available in stores across the state. Shoppers can explore strains, edibles, tinctures, and more, all tested for safety and clearly labeled. And for those unsure where to start, retailers have embraced customer education, helping newcomers find what works for them.

LESSONS LEARNED AND STILL LEARNING

So how does the current state of cannabis in Vermont compare to the vision a few years ago? In some ways, it has surpassed expectations, especially in terms of tax revenue and public support. In other ways, the industry is still finding its footing.

For all its promise, the cannabis sector remains complex. Success depends on navigating regulation, managing public perception, and adapting to shifting demand. It also takes patience, something the CCB and many Vermonters seem willing to extend. As Patrick put it, “We’re continuing to build a market that reflects Vermont values.”